ACELYRIN - Q2 2024

Executive Summary

• Q2 2024 delivered a clear strategic pivot: positive Phase 3 HS readout for izokibep (HiSCR75 met at 12 weeks) alongside a refocus to lonigutamab (TED) and a ~33% workforce reduction to extend cash runway to mid-2027.
• Financially, operating expenses rose YoY on higher clinical and manufacturing spend; net loss was $85.7M and diluted loss per share was $0.86; cash and short-term securities were $635.2M at 6/30/24.
• Guidance: year-end 2024 cash expected at $420–$450M, cash runway extended to mid-2027; restructuring cash charges ~$4.5M; trial completion costs $30–$35M; izokibep CMC commitments $55–$85M; a $31M Pierre Fabre option payment expected in H2 2024.
• Pipeline catalysts: lonigutamab Phase 3 program targeted to begin in Q1 2025 (post EOP2 FDA meeting); izokibep uveitis top-line expected in Q4 2024; potential partnering for izokibep (HS/PsA) under evaluation.
• Stock narrative drivers: positive HS efficacy (HiSCR75/90/100), clean safety profile (no candida), capital discipline, and clearer path/pace to lonigutamab registration; the suspension of new izokibep HS/PsA trials and discontinuation of SLRN-517 are near-term overhangs but support extended runway.

What Went Well and What Went Wrong

What Went Well

• Izokibep Phase 3 HS met primary endpoint HiSCR75 at 12 weeks (33% vs 21% placebo; p=0.0294) with strong higher-order responses: HiSCR90 (25% vs 9%; p=0.0009) and HiSCR100 (22% vs 8%; p=0.001); preliminary Week 16 data showed deepening responses.
• Safety consistent with prior experience; notable absence of candida, liver toxicity, and suicidal ideation/behavior; most common AEs were mild–moderate injection site reactions.
• Strategic capital discipline: focusing future investment on lonigutamab with planned Phase 3 initiation in Q1 2025 and cash runway guidance to mid-2027 enabling funding through BLA-enabling activities; “extend our cash runway to mid-2027 and fully fund both Phase 3 trials for lonigutamab”.
• Management quote: “We met the primary endpoint of HiSCR75 and are especially pleased with the compelling response rates in HiSCR90 and HiSCR100 within 12 weeks” (Mina Kim).
• Management quote: “Izokibep…appears to have the optimal to offer deep clinical responses across multiple HS domains…we are very pleased to have successfully delivered this positive Phase III trial” (Shep Mpofu).

What Went Wrong

• New trials in izokibep HS and PsA suspended; SLRN-517 internal development stopped—reducing breadth, though helping runway; workforce reduction of ~33% implemented.
• Injection site reactions were frequent (≈65% izokibep vs 8% placebo), albeit mild–moderate; discontinuation delta ~7% at week 12 (≈20% izokibep vs ≈13% placebo).
• Operating expenses increased YoY; net loss widened materially vs Q2 2023; the company also disclosed material weaknesses in internal controls (Q1 2024), a continuing governance focus area.

Transcript

Operator (participant)

Good afternoon, and welcome to the Acelyrin, Inc conference call to discuss the company's second quarter 2024 financial results and other corporate updates. This conference call is being recorded today, August 13, 2024. I would now like to turn the conference call over to Tyler Marciniak, Vice President of Investor Relations and Corporate Affairs. Tyler?

Tyler Marciniak (VP of Investor Relations and Corporate Affairs)

Thank you, Carmen. Good afternoon, everyone, and thank you for joining us. Before we begin, I'd like to remind you that this conference call may contain forward-looking statements such as those related to progress of our clinical trials and anticipated data readouts, our future financial and operating results, and projected cash runway, and our ability to commercialize our product candidates. These forward-looking statements involve risks and uncertainties that could cause our actual results and events to differ materially. We would urge you to review the Risk Factors section of our Form 10-Q for the quarter ended June 30, 2024, and additional Form 8-K that we filed with the SEC, both of which are also available on our website at acelyrin.com, along with today's press release and our slide presentation.

Additionally, these statements are based on information available to us today, August 13, 2024, and we undertake no obligation to update them as circumstances may change. The agenda for today's call is on the screen. We will review the corporate strategy updates announced in our press release, as well as positive top-line data from the phase III trial of izokibep in hidradenitis suppurativa. We will also provide an update on the lonigutamab program in TED and close with a financial update, highlighting our projected three year cash runway covering multiple anticipated milestones. Joining us on today's call are Mina Kim, our Chief Executive Officer, Dr. Shep Mpofu, our Chief Medical Officer, and Gil Labrucherie, our Chief Financial Officer and Chief Business Officer. I will now turn the call over to Mina.

Mina Kim (CEO)

Thanks, Tyler, and thanks everyone for joining us today. Earlier today, we announced positive phase III results for izokibep in hidradenitis suppurativa, as well as details of a refocused pipeline strategy and plan designed to extend our cash runway to mid-2027. We'd like to provide more details on this call. First, we're very pleased to have achieved a positive phase III readout for izokibep in HS. We met the primary endpoint of HiSCR75 and are especially pleased with the compelling response rates in HiSCR90 and 100 within 12 weeks of treatment. An effect we believe has not been previously observed by other agents. While the primary endpoint was measured at 12 weeks, we continued dosing patients in a placebo-controlled manner through week 16.

We have data from two-thirds of the trial participants who completed week 16, and these preliminary data further demonstrate deepening of responses over time. These data follow the positive phase IIb/III readout we announced earlier this year, and which were presented in a late-breaking session at EULAR in June. Collectively, the data in HS and PsA further validate our long-standing view that izokibep has the potential to be an effective therapy that is approvable in multiple indications. As we have previously stated, we will make disciplined and capital-conscious decisions. We've determined that a program of this breadth and size is best brought to market by a larger organization with more resources and an existing footprint in the therapeutic areas of interest.

Over the past several months, we've been evaluating where to prioritize investments to maximize the success of our pipeline, including lonigutamab, which we believe has the potential to improve upon clinical response and convenience versus the standard of care in thyroid eye disease. We plan to complete the ongoing trials of izokibep in HS and PsA, but we will not start new trials in these indications. We do plan to continue the phase IIb/III trial in uveitis through to its primary endpoint, with top-line data expected in the fourth quarter of 2024. There's high unmet need in uveitis and a compelling scientific rationale for the IL-17 axis. Should the phase IIb/III data be positive, we anticipate one additional phase III trial of roughly 200-250 patients would be required for registration.

The ongoing trial is fully enrolled with approximately 100 patients. In addition to these izokibep updates, we've decided to stop internal development of SLRN-517, our early anti-c-KIT program. Data from healthy volunteers demonstrated molecular activity, but we have made the decision to deprioritize this program. Finally, this refocused pipeline also requires a different organizational structure, and we are executing an approximately 33% reduction in force. I want to take a moment to pause and thank our colleagues who were impacted by this restructuring. They've played an important role in our growth, and I wish them the very best in the future. While these decisions are difficult, we're confident that they are the right one to enable Acelyrin's long-term success. We remain committed to high-quality execution that's disciplined and capital conscious.

These program decisions, as well as the organizational restructuring, enable us to move forward aggressively to develop lonigutamab and extend our cash runway to mid-2027. By focusing future capital investment on lonigutamab, we will be well-positioned to fund our ongoing and planned TED trials through to BLA submission. Shep will review our overall strategy and ongoing activity for lonigutamab in a moment, but I did want to make a few comments on the program. In terms of development strategy, the original plan had included phase IIb/III, but with the additional dose ranging that we are completing in patients in the ongoing phase II trial, we will be able to go directly into a phase III program, potentially with concurrent trials. We're currently planning to start the phase III program in the first quarter of 2025.

Additionally, we plan to meet with the FDA later this year and then host an investor presentation to provide additional phase II data and details for the planned phase III program. With that, I'd like to turn the call over to Shep.

Shephard Mpofu (CMO)

Thank you, Mina, and hello, everyone. I'm very pleased to share with you today positive phase III data of izokibep in hidradenitis suppurativa, or HS, and provide a program update on lonigutamab in thyroid eye disease. Let me start with HS. Dysregulated interleukin-17A activity plays a pivotal role in hidradenitis suppurativa pathogenesis. Multi-domain disease resolution is underachieved with available current therapies. An unmet need exists for therapies demonstrating efficacy across multiple disease manifestations, including abscess, inflammatory nodules, and draining tunnels. Izokibep is a small protein therapeutic designed to selectively inhibit interleukin-17A with high potency through tight binding affinity. The small molecular size of izokibep attains the size of a monoclonal antibody, may enable tissue penetration, and its albumin binding domain prolongs its half-life and may enhance targeting to sites of inflammation in HS.

Here you see the design of our global phase III trial of izokibep in HS, which we expect will be the first of the two pivotal trials needed for registration in this indication. 258 patients were randomized one to one to receive either izokibep 160 mg weekly or placebo. The inclusion criteria and design is similar to other phase III studies, with a primary endpoint here for the first time in a phase III of HiSCR75 at week 12. At week 16, placebo patients were switched to receive izokibep 160 mg weekly in the active treatment blinded period. As Mina mentioned, two-thirds of trial participants have available week 16 data, and we'll present those preliminary data today as well.

Here we see patient demographics and baseline characteristics, which were well-balanced between izokibep treatment group and placebo, typical of a patient population with moderate to severe HS and comparable to other global phase III pivotal trials. 103 patients on the izokibep arm and 112 patients in the placebo arm completed the study through week 12, thus having approximately 20% on izokibep arm and approximately 13% on placebo arm discontinuing treatment, with a delta of around 7% between the two groups. Please note, the most common reasons leading to discontinuation on izokibep were mild AEs, and there were no notable differences between izokibep and placebo in terms of loss to follow-up and withdrawal of consent rates. In this trial, izokibep had a rapid onset of action associated with clear evidence of improvement within two weeks, achieving statistical significance as early as week four.

As mentioned, the study met its primary endpoint, with 33% of izokibep patients achieving a HiSCR75 response. That is a 75% reduction in abscess and inflamed nodules versus 21% for placebo. Looking at the two-thirds of patients with the week 16 data, we can observe an increase in response up to 40% on izokibep versus 20% on placebo. When we look at higher orders of response, looking at HiSCR90 and HiSCR100, izokibep again achieved statistically significant responses at week 12 versus placebo, with approximately one in four patients on izokibep achieving these deeper responses versus placebo. Notably, the deltas for HiSCR90 and HiSCR100 were maintained at week 16. Here you see the response across the continuum of HiSCR50 to HiSCR100, as depicted from left to right on the slide.

As expected, we observe a consistent trend with placebo response decreasing as the efficacy hurdle increases at week 12. Clinically meaningful reductions in skin pain and improvement in DLQI were still observed versus placebo at week 12 and also at week 16. The safety findings of izokibep were consistent with those observed in previous trials, with the most common adverse event being mild to moderate injection site reactions in around 65% of patients on izokibep, versus 8% in the placebo arm. You'll also note not much differences for other events like headache happening in 10% versus 9%, and 7% of nasopharyngitis in both arms. Notably, there were no cases of Candida on izokibep, with only three cases showing in placebo. There was no IBD, liver toxicity, suicidal ideation, behavior in the izokibep treatment arm.

In conclusion, izokibep safety is in line with our past experience, and izokibep appears to have the optimal to offer deep clinical responses across multiple HS domains, including skin pain and patient-reported outcomes. We are very pleased to have successfully delivered this positive phase III trial for izokibep in HS, which builds on the phase III data released in PsA earlier this year. Now, turning our attention to lonigutamab, which we are developing as a subcutaneous treatment for thyroid eye disease. Thyroid eye disease is an autoimmune disorder characterized by progressive inflammation that can lead to irreversible damage to tissues around the eye, threatening vision. Patients present with proptosis, diplopia, and a variety of disabling eye symptoms. It affects greater than 100,000 patients in the U.S. A high unmet need persists in thyroid eye disease, a multifaceted disease whose impact extends beyond the well-recognized visual disfigurement.

Patient quality of life is markedly impacted by TED. A therapy that provides rapid, deeper disease-modifying effects that are durable across TED manifestation and results in improved patient quality of life, safety, and convenience will be important for patients. Lonigutamab is a next generation recombinant humanized IgG1 monoclonal antibodies against human IGF-1 receptor being developed to treat severe manifestations of TED. As shown in the middle cartoon on the slide, lonigutamab binds IGF-1R on a unique binding site, which we call an epitope, and does not compete with IGF-1 binding. It does this with high affinity, with a Kd affinity measured around 30 picomolar, and a specificity which triggers rapid internalization and degradation within minutes of the IGF-1 receptor, thus eliminating it from the surface of the IGF-1R expressing cells, with potential to maintain IGF-1 within homeostatic levels.

IGF-1R internalization prevents downstream signaling in orbital fibroblasts from patients with TED, and has been associated with therapeutic benefit in TED. The rapid and efficient suppression of IGF-1 receptor signaling in TED with lonigutamab could potentially improve clinical outcomes for patients by providing lower doses of exposure to achieve robust clinical response, as we saw in our proof of concept, with 40 mg Q3W having responses at early time points when we assessed at three weeks after a single dose. There's potential for deep and durable responses with chronic dosing and ability to minimize safety risks by choosing an optimal, convenient dose regimen.

As I mentioned, we completed the phase I proof of concept portion of our ongoing lonigutamab trial earlier this year, and we are now embarking on a dose-ranging phase II portion, across four dose group levels, as you can see depicted on the right part of the slide projected. The phase II trial was designed with the flexibility to test multiple dose levels and regimens in order to, number one, establish what we call a minimum effective dose when we are focusing on assessing the Cmin. And number two, to enable establishment of an optimal dose selection for phase III program within the optimal therapeutic window that you can see labeled on the Y-axis on the left part of the slide.

Making sure that we don't have a Cmax that results in overexposure, and therefore, really calibrating an opportunity to minimize safety, which might be associated with high and overexposure. We are using the totality of this data to calibrate to an optimal dose level and convenient dose regimen. We recently initiated the final dose group with a dose level of 70 mg administered every three-four weeks in this phase II trial to confirm the dose we will take to phase III. We believe our phase II approach is unique in that it's patient-centric, designed comprehensively to address the ongoing unmet needs of thyroid eye disease patients, and really balance benefit risk to define an optimal dose level and a regimen that profiles a robust therapeutic impact across the multifaceted aspects of TED.

We are currently planning to start the phase III trial in the first quarter of 2025. As Mina mentioned, we are looking forward to meeting with the FDA later this year and sharing more information about the registrational program in TED at a future investor event. Now I'll turn over to Gil.

Gil Labrucherie (CFO and Chief Business Officer)

Thank you, Shep, and good afternoon, everyone. Today, I'm going to make a few comments on financial highlights from the quarter ended June 30, 2024, and then discuss some of the financial implications of the refocused pipeline and restructuring initiatives we announced today, the key milestones ahead for us, and also provide year-end cash guidance. We are fortunate to be in a strong financial position. At June 30, our cash position was approximately $635 million. For Q2, our R&D expense was $76.4 million, as compared to $30 million for the same period in 2023. A substantial majority of our R&D expense, approximately 75%, is related to the izokibep program, where we have been executing three phase III programs this year in PsA, HS, and uveitis.

General and administrative expenses were $16.6 million for the second quarter, as compared to $12.7 million for the same period in 2023. R&D and G&A expense includes stock-based compensation expense of $10.2 million, which increased from $8.5 million for the same quarter in 2023. Today, we made the difficult decision to rightsize our organization in line with our refocused pipeline strategy. I wanted to make a few comments on the financial implications of this decision. We expect to incur approximately $4.5 million in cash-based restructuring charges related to the workforce reduction. Our estimate for the cost associated with the completion of the ongoing uveitis study, HS, and PsA studies, is expected to range between $30 million and $35 million.

With respect to the ongoing izokibep CMC activities and commitments, we expect to incur between $55 million and $85 million. We are actively working with our manufacturing partners with a goal to mitigate these costs. From a financial point of view, our focus will be on efficiently and effectively executing this refocused pipeline strategy and associated restructuring, remaining disciplined and risk-aware with our operational spend, and significantly extending our cash runway out approximately three years to mid-2027 through multiple value-enhancing catalysts. This long-range financial guidance includes adding an additional dose arm to our ongoing lonigutamab phase II trial, as Shep just reviewed, funding two phase III trials for lonigutamab, and BLA-enabling activities for that program. In addition, please note that our cash runway guidance does not include any proceeds related to additional financing or partnering. We are very excited about the milestones ahead for Acelyrin.

We remain focused on our core mission to accelerate the development and delivery of transformative medicines in immunology. On this slide, we have outlined some of the important milestones for our development programs and related timing windows. Following our end of phase II meeting with the FDA on the lonigutamab program, we plan to hold an investor event focused on the unmet need for thyroid eye disease patients, the detailed rationale underpinning dose selection, the outcome of the end of phase II meeting with the FDA, additional data from the ongoing phase II, and the design of our phase III development program. In addition, we also continue to project that we'll have top-line results from the izokibep phase IIb/III trial in uveitis before year-end. We anticipate rapidly advancing lonigutamab into late-stage development with the start of the phase III program before the end of Q1, 2025.

We expect the first top-line readout from the registration program in 2026, and to file a potential BLA thereafter. We look forward to sharing more details on our plans for the lonigutamab program at our upcoming investor event. Now, turning to forward-looking financial guidance. We currently project our 2024 year-end cash position will range between $420 million and $450 million. We expect our cash used in operations to increase substantially in the second half of 2024. Remember, in the first half of 2024, we received $37 million from a one-time vendor credit and licensing payments. Conversely, in the second half of 2024, we expect to pay a $31 million option payment related to achieving proof of concept with lonigutamab and non-recurring payment for costs related to the restructuring and exiting certain izokibep commitments...

As I mentioned earlier, we now project our cash runway to mid-2027, which we anticipate will fully fund the lonigutamab development program through BLA filing, while also preserving capital for selective pipeline expansion. As I stated earlier, our cash runway guidance does not include any proceeds related to additional financing or partnering. Now I'll turn the call back over to Mina.

Mina Kim (CEO)

Thank you, Gil and Shep, and thank you all for joining us on today's call. The decisions we announced today about our go-forward strategy position us to execute on lonigutamab from a position of strength. By suspending new investment for izokibep and PsA and HS, discontinuing SLRN-517, and the difficult decision to rightsize our organization, we can now focus on rapidly developing lonigutamab as the potential best therapy for thyroid eye disease. We have an outstanding team. We're positioned to deliver high-quality execution of the pivotal program, and we now have the cash runway to take the program through both pivotal trials. We're excited by the opportunity to serve the unmet needs of TED patients.

Since taking on the CEO role a few months ago, I've had the opportunity to meet with many, probably more than 100 of our investors, and I appreciate the opportunity to provide this update today. We look forward to providing regular updates on our progress, and I hope you will join us for our investor event after our FDA meeting, where we will provide an in-depth and comprehensive overview of the full lonigutamab opportunity and the many reasons why we're so excited to move this program forward. Thanks for joining us today. Operator, with that, we can open up to questions.

Operator (participant)

Thank you so much. As a reminder to our teleaudience, press star one one to get in the queue and wait for your name to be announced. To remove yourself from the queue, press star one one again. Please stand by for our first question. It comes from the line of Derek Archila with Wells Fargo. Please proceed.

Derek Archila (Managing Director and Co-Head of Therapeutics Research)

Hey, thanks for taking the questions. Just three quick ones from us. I guess first, what's the rationale for adding the 70 mg dose in the ongoing phase II for lonigutamab? Also the every three-week dosing arm as well. Just want to also figure out, you know, whether this is kind of leading to potentially a, you know, a loading dose, in phase III. So that's the first question. Second question, just for izokibep, I guess, is the plan to partner this asset right now, or is it just going on the shelf? I just wanted to clarify in terms of the comments you made around uveitis, is that something you would plan to move forward by yourself if that data looks good?

And then third, you noted in terms of kind of the expanded cash runway and opportunity potentially to expand the pipeline. I guess, is that a near-term priority? And I guess, what stage of development would you be looking for in terms of assets? Thanks.

Mina Kim (CEO)

Yeah. Hi, Derek. Hey, thanks for the questions. There's a lot in there, so I'm going to take them in order. Hey, maybe to start with, izokibep, right, and the partnering question, and then what are we going to do with UV, or, you know, how do we think about uveitis? You know, what I'd say with respect to partnering, and this is what we've been saying, we're going to do what's best for the program, right? We're open to all options and, you know, fundamentally, we want to see, HS and PsA, right, bring benefit to patients, and that might be with a larger organization that has existing capabilities and infrastructure. Right? So again, you know, we'll look at all the options and we'll do what's best for the program.

I do want to note and reemphasize something that Gil said, which is we have not included any financing proceeds or proceeds from a partnership in our cash runway guidance, right? So that, that excludes, any contribution from a potential partnership. So I think that's the, you know, the response on the Izo and uveitis questions. With respect to potential BD going forward, look, I mean, we're always going to look at opportunities. We'll be opportunistic, and as Gil said, we have, assumed, right, that there could be some pipeline expansion, and we have, the funding for that, we believe. Right? I would say, though, right now, it's important for us to focus on lonigutamab and high-quality execution on that program, and that is the focus for now.

So any additional BD, you know, I don't think we're in a hurry, and it's a high bar, right? But we certainly will consider any, you know, opportunistic opportunities, right, over time. And then I think you had questions around, the design, right, of the lonigutamab development program, and maybe it's helpful to frame that up a little bit. Right? Just stepping back, you know, we have spent the last few months evaluating the entire development program, really with two goals. One is, how do we de-risk the phase III program, right? And the other is, can we do that at the same time as we try to accelerate the program? And we have been trying to balance both of those things. We do think that adding this additional dose cohort into the phase II program helps us achieve that.

First, it allows us to complete dose exploration in the phase II trial rather than in a 2b/3, as originally planned. What that does is it allows us to move directly into a phase III program and potentially run two phase III trials concurrently, right, rather than sequentially, which, you know, obviously has the potential to accelerate that program. You know, and we've added the 70 mg dose. We are looking at it in both three weeks, right, and four weeks, right, to confirm the dose that we're going to take into the pivotal program. I would say, I think it's important to note, we think we have our dose, right? But regimen is also important, and again, we want confidence around that dose we take into the program, and the ability to do that in the phase II, right, is we think...

Potentially both de-risking and hopefully does allow us to go more quickly into that phase III program.

Derek Archila (Managing Director and Co-Head of Therapeutics Research)

Understood. I guess just, just to follow up there in terms of like, again, is that being examined for potential loading dose, or is the loading dose going to be figured into the phase III program?

Mina Kim (CEO)

No, I mean, that's not something we're contemplating now. I mean, we do think that 70 is our dose.

Derek Archila (Managing Director and Co-Head of Therapeutics Research)

Understood. Thank you.

Mina Kim (CEO)

Thanks, Derek.

Operator (participant)

Thank you. Our next question comes from the line of Tyler Van Buren with TD Cowen. Please proceed.

Tyler Van Buren (Managing Director and Senior Biotech Equity Research Analyst)

Hey, guys. Thanks for the updates. It's encouraging to see the rationalization of the pipeline. Wanted to ask about the phase III uveitis trial readout. So what would compelling data from that trial look like later this year that would lead you to pursue another trial for registration? And the second question is, what are your latest thoughts on the market size for uveitis?

Mina Kim (CEO)

Yeah. So maybe I'll start, and then I'll turn it over to the team. I mean, you know, I think we're going to evaluate uveitis in the same way that we have all of our other programs, right? We're going to look at the totality of the data, you know, the market, the unmet need. What I would say, maybe, to start, is there is very high unmet need, right, in uveitis. And so we, we like that opportunity, right, to address the unmet needs of patients. There is obviously, you know, very limited - there are very limited options for those patients, and that will also factor into it. In terms of the trial design and sort of what are the endpoints, I'll turn it over to Shep, maybe to just walk you through that.

Shephard Mpofu (CMO)

Yeah, no, thanks, Mina. Our trial is designed the same as the Humira trial, which is the only large phase III study that was done in uveitis. We have patients receiving steroids at baseline and then having a regimen to decrease them over 15 weeks. We have a primary endpoint at week 24, where we'll be looking at 4 parameters, same as Humira did, looking at inflammation in the back of the eye, chorioretinal inflammation, and then looking at inflammation within the eye, looking at the vitreous haze, anterior chamber as well, and then best corrected visual acuity. So that's the treatment failure. So we'll be looking at a compelling data set that showcases there are more patients on placebo versus drug that achieve this endpoint.

Operator (participant)

Tyler?

Tyler Van Buren (Managing Director and Senior Biotech Equity Research Analyst)

Yep, all good. Thank you.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Yasmin Rahimi with Piper Sandler. Please proceed.

Yasmeen Rahimi (Senior Research Analyst)

Thank you so much, team, for sharing these difficult decisions with us and walking us through the rationale. Team, I guess, could you maybe talk about cohort three? Cohort four has just begun. At what junction, at what have you seen from that dose cohort so far? When should we be expecting data from it? And then, I guess, and then as we think about phase III design, just maybe parts of the... You alluded to some innovative approaches, but, maybe, maybe walk us through who would be the ideal patient. It also seems like TED studies have become quite competitive in terms of enrollment. So appreciate also color and ensuring, you know, being able to deliver top-line data in an efficient manner. Sorry, there was too many questions in there, but I guess—cohort three and, yeah.

Um-

Mina Kim (CEO)

Yeah.

Yasmeen Rahimi (Senior Research Analyst)

I appreciate color on that. Thank you. Sorry about that.

Mina Kim (CEO)

Yeah. No, for sure. So, let's start with cohort 3, and then, if we miss anything, just, just remind us, just prompt us. You know, like I, like I just said in, you know, in our prepared remarks, we are thinking about that phase II program, right, holistically. We think it's most useful to read out the data from that phase II program after we've met with the FDA later this year, right? When we can give a more complete picture. And that more complete picture would be additional data, right, including from, you know, cohort 3, you know, really from the totality of that, across the phase II program, and also how we're thinking about the, the phase III program.

So, you know, I think that's a little bit of the timing, and we would expect that to be later this year or potentially early next year, right? But really, when we've got a more complete picture to share with you all, we think that that's most useful. You know, so I think that's kind of the design. You know, in terms of the patients that we can potentially serve, we do think that there continues to be very high unmet need, right, in TED patients. And you know, I think we talked about this before, we are particularly interested in the ability to think about chronic dosing, right? This is a disease that, you know, can flare or regress or, you know, however you want to describe that, and there is an ongoing need for those patients, right, across many different endpoints.

We really want to optimize sort of the dose and the regimen, right, to try to address the totality of the disease. We think that there, you know, again, continues to be unmet need, and we are very interested in exploring that chronic population. Hey, Yasmin, that answer, what did I miss?

Yasmeen Rahimi (Senior Research Analyst)

Yeah. No, no, no. Just, just, yeah, that's an enrollment timing, just because it's competitive. Like, we feel confident to-

... you know, just because now several test studies will be ongoing concurrently in phase III, appreciate some color there.

Mina Kim (CEO)

Yeah, and look, we feel good about that. I mean, obviously, we're enrolling patients right now, right, into the phase II. You know, we think that that's, we feel good about that experience and confident going into the phase III trial, you know, somewhat based on that experience. So, you know, understand that there are more trials going on, but we feel good about that.

Yasmeen Rahimi (Senior Research Analyst)

Thank you so much. I'll jump back in the queue.

Operator (participant)

Thank you. Our next question comes from the line of Akash Tewari with Jefferies. Please proceed.

Speaker 11

Hi, this is Phoebe on for Akash. Thank you for taking our question. So I guess more on uveitis, are you targeting more refractory patients like those who are on or after prior biologic use? And additionally, will uveitis be considered an orphan indication, and could you potentially get orphan pricing of around $200,000 per year in this indication? I imagine there might be some pushback from payers for orphan drug pricing, given Humira is already approved for uveitis and is much cheaper. So just some color around that would be helpful.

Gil Labrucherie (CFO and Chief Business Officer)

Yeah. Great, thanks for the question. This is Gil. You know, as Mina was saying earlier, you know, this is an interesting indication. There's still a very high unmet need. There's really only a couple treatment options, essentially steroids, and Humira. And the current standard of care is really only modestly effective. So we really think there's an opportunity here to drive additional benefit to the patients, whether that, you know, at any line of this. We also think that, with the limited therapeutic options, you know, as a therapy like izokibep may come in here, they'll also have an opportunity to expand the market and diagnosis of this, you know, this condition.

I think in terms of, in terms of the pricing question, you know, that's a little early, to, to say, but certainly something that we're, that we think about, as, as we go in, but it's a little early to speculate on, on pricing in the indication.

Shephard Mpofu (CMO)

Yeah, and on patients that are coming in the study, these are patients with active non-infectious uveitis. They will be patients who also have been previously exposed to other biologics, except those biologics that are on the IL-17 pathway.

Speaker 11

Understood. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Emily Bodnar with H.C. Wainwright. Please proceed.

Emily Bodnar (Biotech Equity Research Analyst)

Hi, thanks for taking the questions. I guess kind of a clarifying question. In the 70 mg lonigutamab dose, are you enrolling eight patients in total across the three weekly and four weekly regimens, or is it eight per regimen? And then kind of a follow-up to that, do you think that's a sufficient number of patients to kind of get an idea if that's the appropriate dose to take into phase III? And then lastly, if you can kind of confirm that you haven't seen any cases of hepatic impacts from any of the cohorts so far? Thank you.

Mina Kim (CEO)

Yeah. Thanks. Let me, let me start, and maybe I'll turn it over to Shep on the, the hearing. The way that this, this final cohort is set up, it has 8 patients and allows us to try the 70 mg, Q3 and Q4. It also gives us the flexibility to go up to 16 patients, you know, in that cohort, so it is built with some flexibility. You know, obviously, those are small numbers, but in totality, right, across the phase II program, right, we will have seen inpatient data across multiple doses and regimens, and we think that that's going to be very, again, useful for us in a way to de-risk that phase III program, right?

Shephard Mpofu (CMO)

Yeah.

Mina Kim (CEO)

Maybe I'll let Shep address the hearing question.

Shephard Mpofu (CMO)

Yeah, no, thanks for that response. And for hearing, all our dose groups that we have been exploring in the dose range have audiograms done at baseline and throughout the course of the study. None of the patients in any of the dose groups have developed any notable hearing impairment or sensorineural hearing loss. We did report in March in our top-line data that there were three patients in one of the cohorts that had transient tinnitus that resolved, and none of those patients had changes in audiogram. So, so far, no major changes pertaining to audiogram changes in all of our cohorts.

Emily Bodnar (Biotech Equity Research Analyst)

Okay, great. Thanks for taking the question.

Mina Kim (CEO)

All right. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of, Vikram Purohit with Morgan Stanley. Please proceed.

Vikram Purohit (Research Analyst)

Hi, good afternoon. Thank you for taking our questions. We had two. So first on 517, was just curious what you might have seen in the early stage of development for that molecule to decide to stop pursuing that any further. And then secondly, for the end of phase II meeting with the FDA, just curious, what are the main questions you're hoping to have answered about the phase II development program, through that meeting with the agency? Thanks.

Mina Kim (CEO)

Yeah, maybe I'll start with SLRN-517. As I said on the call, you know, we did do a healthy volunteer study, and actually some of that data is up on our website if you want to take a look at that. You know, I think, you know, really, we made, again, a strategic sort of prioritization decision, and a program decision, and so that's, you know, we are not going to continue development of that program internally. But if you do want to see the data, it is up on the website. Okay, and then I guess on the second question, with respect to the end of phase two meeting, maybe I'll turn that over to Shep.

Shephard Mpofu (CMO)

Yeah, no, thank you for that question. Our end of phase two meeting is principally a traditional end of phase two, where we would sit with the regulator, FDA, to explore what we have done to date and agree on the benefit risks that we are showcasing. As was discussed, dose, and obviously, importantly, the study designs will be at that point in time wanting to proceed with in phase III.

Vikram Purohit (Research Analyst)

Understood. Thank you. Quick follow-up, then just apologies if this was discussed and we missed it, but the cash runway guidance through 2027, exactly what does that contemplate with regards to future development in uveitis?

Tyler Marciniak (VP of Investor Relations and Corporate Affairs)

Yeah. So, the cash runway guidance, Vikram, we have included the completion of the ongoing uveitis study as well as the HS and PsA. We have included the completion of the phase two program in lonigutamab, two phase III programs, two phase III trials in the registrational program for lonigutamab, as well as, you know, potential BLA-enabling activities.

Vikram Purohit (Research Analyst)

Okay, understood. Thank you.

Operator (participant)

Thank you. Our last question is coming from the line of Samantha Semenkow with Citi. Please proceed.

Samantha Semenkow (VP and SMid Biotech Equity Research Analyst)

Hi, good afternoon, and thanks for taking the questions. I just have a couple on lonigutamab. I see in your corporate deck, you have, I think what's maybe a new slide, just a bit more detail on the tinnitus that you've seen, and you've observed all three cases from just cohort one. So the question is, why you think this might be the case? Why is it only in cohort one and none in the cohort two patients so far? Is there something common between these three patients, or is perhaps the loading strategy, loading dose strategy explored in cohort two? Do you think that's driving the difference? Would just love any thoughts you could provide there.

Mina Kim (CEO)

Yeah. Look, maybe I would just start with, you know, what we are showing is what we saw in cohort two, and I would note that there were none in cohort one, sorry, there were none in cohort two. And then maybe I will turn it over to Shep for some more details.

Shephard Mpofu (CMO)

Yeah, no, thanks for the question, Samantha. Number one, we have not seen any reason why these patients had tinnitus in that cohort. If you specifically look at the narratives for each respective patient, you will notice that this was tinnitus that was transient in the majority of those three patients and resolved. If anything, I can comment on one of the patients who had tinnitus at 24 hours after the first injection, in 24 hours it resolved, and it happened the same. Remember, cohort one only had two injections at week zero and week three. So no relationship to any aspect pertaining to the patient characteristics, and I think not seeing anything in cohort two gave us the confidence that this is not related to any dose exposure, and therefore, this was just something that happened within the study.

As I mentioned, all patients are having audiograms at baseline over time, and to date, we have not seen anything that speaks to sensorineural hearing loss or impairment.

Samantha Semenkow (VP and SMid Biotech Equity Research Analyst)

Great. Thanks so much for taking the question.

Operator (participant)

Thank you. With no further questions in the queue, I will turn it back to Tyler Marciniak for his concluding comments.

Tyler Marciniak (VP of Investor Relations and Corporate Affairs)

Thank you, Carmen. Thank you all for joining today's call, for the opportunity to share with you these exciting corporate updates from Acelyrin. As noted in the press release, we look forward to sharing more information about our plans for lonigutamab with you during the upcoming investor event. Our management will also participate in multiple webcasted presentations and one-on-one meetings at upcoming investor conferences. Please visit our website regularly for our latest IR calendar. Of course, please feel free to contact me and the investor relations team at any time if we can be of service to you. With that, we'll conclude our call for today. Thank you very much.

Operator (participant)

Thank you all who participated in today's conference. You may now disconnect.