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Hey, everybody, we're back. Very happy to have Gary Neal, CEO of Avalo Therapeutics with us for the next Fireside. I'll kick it over to Gary to give a brief overview of Abalo, and then we'll get into a Q&A. So with that, Gary. Thanks, Alex, and thanks for having us again. So, Avalo is focused on developing therapies targeting IL-1 beta for immune-mediated inflammatory diseases where there remains significant need. Our lead asset is abdacobart, formerly ABTX009, a highly potent and selective anti-IL-1-beta monoclonal antibody. And we acquired the molecule through the Almada a biotransaction in 2024 because we saw a compelling combination, strong biology supporting IL-1 beta as a central driver of HS and an attractive safety profile for the IL-2 beta class and the molecule we believed would have a differentiated efficacy and dosing profile and that's playing out. The Lotus phase two results significantly strengthened that conviction. So both doses met the primary high score 75 endpoint response rates of 42.2, 42.9, respectively. And we saw very consistent activity across multiple clinically meaningful secondary endpoints. In fact, all of the secondary end points were positive. Importantly, the 300 milligram every four-week regimen performed essentially identically to the every two-week regiment. and our number one priority is straightforward. Execute the registrational phase three program in EHS, which we plan to initiate the first half of 2027. And at the same time, we're building beyond mDACABART with ABTX010, our next generation long-acting anti-AL1 beta antibody, and we plan to submit an IND for that program in the first Half of 2026. So, I'd characterize the next 12 months as being about execution moving abdakabart into phase three looking at additional indications and beginning to build a broader aisle one beta franchise yep yeah great and i think i think maybe maybe the way to um you know kick things off is just sort of talk about you know where is the hs landscape today right like we have we've had some new therapies recently we've said some we've had some failures we've we've got a lot of new things in development you know we're going to where are we at right now in your view? So it's very vibrant, very dynamic. There's increasing recognition of the huge need. Patients are getting earlier diagnosis and better diagnosis than they ever had before because of the availability of some new products. And they're getting on biologics much earlier with a recognition that allowing the disease to progress is not really optimal medical care. So we're seeing the market growing. It's probably already in excess of $3 billion, and we have it pegged to grow to over $10 billion by the mid-30s, and that may be an underestimate for it. It has been very easy to enroll these trials because of the availability of patients who are seeking better treatment options, and that's why we do need to explore and provide new mechanisms such as abdacobart to these physicians that look after them and the patients because even though there's been a lot of progress there still remains a lot of need patients are completely satisfied and until we get a mature market like psoriasis where the majority of patients are achieving a clear skin i think we're we're not done yet and i guess you alluded to this in the intro but sort of the core thesis here is selectivity for i1 beta and sort of that comes out of some initial proof of concept data from ludicizumab from AbbVie, which is IL-1 alpha beta. I guess maybe at a high level, can you talk about that mechanistic rationale that underpins the story here? And then I want to get into the phase two a little bit more detail. Yeah. I mean, IL-2 beta is really a central inflammatory driver. So from an efficacy point of view, it really makes a lot of sense. There are very, very high levels of IL-3 beta in these HS lesions more than any other cytokine. The second most commonly expressed would be IL-17, which we know is well validated with approved drugs on the market. And it also has an effect, IL-1 beta has an impact on a variety of other mechanisms, such as the matrix metalloproteinase system, direct effects on the neutrophil and macrophage, which are really super important, also upstream of TNF. And so all of that taken together leads to a really great profile potentially of being able to help more patients also get into healing in draining tunnels and fistulas. So that's really critical for it. But at the same time, it has a really great safety profile because IL-1 beta does not really, it's not a pro-immune stimulator. It's an inflammatory molecule. So blocking it gives you an anti-inflammatory effect, but you don't get into opportunistic infections or increased cancer risk, which has been a little bit of a problem or an impediment to the safe use of some of the other products that are used in this disease. And in fact, I mean, if you look at the historical data from the CANTOS trial with Alaris, which is a much less potent drug than ours and not being developed in HS, but it did show that there was no increased cancer risk. In fact, quite the opposite. There was a markedly reduced cancer risk and cancer mortality risk in that three-year study since most cancers, epithelial cancers, especially arise on a background of inflammation. And you also saw a decrease in cardiovascular risk with long-term treatment with it. So I think those are both very reassuring when you're looking at the long- term safety profile of a drug like abdacobar. Yeah, I guess, you know, in the context of the phase two, the safety profile was, you know. Pristine, right? I guess you want to talk about the phase to study in a little more detail on how it supports the thesis overall, and then we'll get into some more follow-ups on that too. Yeah, I mean, so the LOTUS was an approximately 250 patient study, and as you said, adverse event rates were similar across the treatment and placebo groups, and importantly, we observed no adverse events related to neutropenia, serious infections, opportunistic infections, or anything like that. The data, as I said, we're basically class leading for what's been presented now in a large, well-controlled study. And I'd like to point out that, I mean, we did a really rigorous trial to a pivotal standard, both of the execution and the way we analyzed the data using a very rigorous imputation, the most conservative imputation method that you can use. So we're very, very confident about the data being translatable to a phase three program and the consistency of the response as well. But in every single secondary endpoint, many were not really powered for statistical significance, but everything went in the right direction. And we saw very, Very consistent responses and very clean response curves over time, which is a little different than some other smaller studies have shown. Again, all of that taken together gives us very high confidence in this mechanism of action and in this drug. From a baseline perspective, things were quite similar to other contemporary studies. I guess you did include IL-17 experience patients. We did, yeah. How might that have contributed to the data here? Can you say much about that subpopulation at this point? Right. I mean, so we had more than a third of the patients were biologically experienced, either with a TNF or with a 17, almost all the 17 experienced patients that also had a TANF. And the response rates were virtually identical in the biologically exposed, experienced patients compared to patients who are biologically naive. So that tells us that we can expect a very good response in that population in secondary use. We are studying it and planning to get first-line use for the drug. We think that given its efficacy and safety profile, it would be ideal for that. But it's also going to be very reassuring to patients and doctors and also to payers that the drug can be effective in patients who've already had a course of biologic therapy and didn't respond as well as they wanted to. And obviously, the internal consistency of the trial is quite impressive. Yes. The one question here is placebo response, right? It is on the higher end relative to some other contemporary studies except for Vela2. I guess the question for you is, is this the new normal, in your opinion? Do you think kind of placebo responses on high-square 75 moving forward may end up being in the low to mid-20s? So it's a little hard to be sure. I mean, this is a variable disease for a lot of reasons, and we've known that from the beginning. There's a stochastic range of placebo response that have been observed, despite everyone's best effort to try to control it. through training and management. There is a little bit higher placebo response in some patients who have milder disease. Again, part of that is due to the endpoint, the regulatory anchor endpoint of high score, which is a binary outcome. So you could be one or two lesions either way and either be a responder or a non-responder. But that said, historically, again, we've seen this range from 13% all the way up to 25% as we did. That means that one has to really power the study and make sure you're studying a drug with a robust treatment effect to make sure that you're going to be able to demonstrate the drug treatment effect in a population where you happen to get a placebo rate that high. We've looked very carefully at our data. We're going to take the lessons learned forward into phase three with additional stratification and enrollment criteria and training more, even more rigorous training than we did before in the hope that we're going to be able to manage that. But given the fact that we were able to show such a robust, consistent In fact, in a smaller study, I mean, running studies with a much larger sample size is only going to increase our power to demonstrate the effectiveness of the drug. So we're not worried about it. We're going to try to manage it. And it may be the new normal and it may Be difficult for new treatments coming in that are more marginal in their efficacy to withstand that. So you're going to present this trial at EADV as a late breaker. Anything we should expect new out of the data set that you didn't present at the top line? No, I think the emphasis on that is going to be the IHS-IV data. We like that as a better endpoint because it's a more continuous variable, and it's also weighted towards patients with more severe and deeper lesions, and we did very well with IHS4, but we have presented those data before. So there won't be a lot. We did present most of the data that really matters. We'll be talking a little bit more as we go forward about things like PK and anti-drug antibodies and so on and so forth, which all is very favorable for us. So there's going to be a wealth of other HS datasets before the end of this year. Also at EADV, we'll have the TL1A2 Lasocobar data. At some point later this year, maybe we'll get the ludicizumab data from AbbVie, some BAF IL-17 bispec data, BTK, et cetera. I guess out of these contemporary readouts in general, I don't want to circle back to Ludi, but like, what are you looking for in these datasets to understand, you know, where the development landscape is and sort of maybe learnings for your own phase three trial? Yeah, we're always interested in that. It's very exciting to see new mechanisms coming forward. It is going to help to accelerate and expand the market, we think could give patients more treatment options. But that all said, we still remain very, very convinced that IL-1 beta is the bullseye for therapy right now and that we have the best drug against IL-2 beta with abdacobard. The LUDY data, I mean, I think the readout could be very important for us. We think there are several informative scenarios if they produce a successful phase three result, which is what we all expect, I think that will be definitely good for us. It will still be very differentiated from them with the potential for our every four week dosing regimen from treatment initiation and maybe some advantages on the safety profile as well. If the efficacy is broadly consistent with what's been observed, in other words, we believe Lotus results position us very, very well. If they substantially outperform their earlier experience, which is possible, I think that would be very important evidence that IL-1 inhibition can produce very deep response in HFs. And we then have the next IL-2 program in development with potential differentiated molecular and dosing characteristics, as I've already pointed out. I think the least likely scenario is that their study significantly disappoints. And if that happens, we'd obviously want to understand why. We'd want to look at the data very carefully. But our confidence in abdacobar really ultimately comes not from what litikizumab does, but from our own randomized phase two data set. And those two independently studied doses, statistical significance in I-score 75 and IHS4, the depth and consistency of response across multiple endpoints. I mean, that just gives me very, very high confidence for going forward. So we're looking forward to the readout because it should provide another important piece of information about the IL-1 opportunity in HS, but our development decisions are being driven by the strength of the EBDACABART data. I guess, how would you react to, you know, devil's advocate you know perspective around the ludi trial like if they were to show a delta that was greater than what you showed in in phase two you know how would you how would você reagir à a perspectiva que isso aderiu à ideia de que a alfa vale a pena em hs e que parar a alfão pode ser detrimental para um dacobar sim eu não acho que eu chegaria à conclusão eu quero dizer que nós temos to obviously look at the data, because there's going to be a range of potential outcomes from a clinical trial. And I think mechanistically, looking back at the bromecamab data set, which showed really no evidence of efficacy with a high affinity anti-L1-alpha, you'd have expected that if L1-Alpha was able to do anything positive, they would have seen some kind of an effect in that trial, and they didn't. I think the worry is that IL-1 alpha blockade may have a less desirable side effect profile because of the role of IL-2 alpha as an alarm in and in defense of the skin against infections. And there has been a little hint of that, although again, you have to be careful with small data sets, but we'll be looking at that. I think the fact that IL1 alpha levels aren't increased in the lesion also is another clue that it's probably not going to be doing much. So we'll have to look at the data and see what comes out. I would see a positive result from lidacizumab as further validation of the L1 beta hypothesis, primarily. Makes sense. So sort of with that and on all these other readouts, I guess, where do you see kind of the HS treatment landscape 10 years from now? Like, do we see one dominant mechanism of action? Do we see multiple cycling? Like what's the best, you know, disease area analog to HS in your view? In my view, the best disease analog to look at is IBD. And remember, there are more patients with HS, as far as we know, than there are with IBD and the IBD landscape as it's evolved, as there's been a desire to provide better therapies and to put more patients into remission with the disease has resulted in a larger number of mechanisms entering the market and each of each of them having their their place and we're now beginning to see combination therapy come in and which is kind of expected i happen to be a gastroenterologist and i can say that as a group gastroenerologists tend to be a little bit more aggressive in trying novel therapies, things and combination therapies, maybe than either rheumatologists or especially dermatologists. But the need for more effective treatments has driven that. And I think we could probably expect to see something similar ultimately happening in the HS area as well. But, the bottom line is that this is not going to be a disease that is dominated by any one mechanism or therapy. There may be some application of biomarkers or other standards that helps to direct therapy, but that hasn't really panned out that well so far in IBD. So it's just meant that doctors and patients need choices, either because they don't respond initially or because they initially do, and then they have an inadequate response or a diminution in that response, and they need to switch to a different mechanism. So the HS market, I think, will be like that. There'll be a need for a number of different mechanisms, room for a lot of different organisms. But among those, we think IL-1 beta suppression, especially with a high potency drug like abdacobard, is going to play a very important role and also an important role as a potential combination therapy. Yeah, makes sense. So can you walk through? So we've had the phase two. What are the steps left for you to then move into a pivotal program from here? Right. So we've requested an end of phase two meeting with FDA. We're requesting scientific advice from the EMA as well. We expect to get that FDA's feedback on our proposed program before the end of the year. Once we have reached agreement with them, we intend to move forward into our phase three program. We've already been working very hard on getting our clinical trial supplies ready for phase three. So we have contracts with our CMO and that's all gone extremely well. We've been doing our contract negotiations with the CRO. So we're ready to hit the ground running as soon as we have the very final protocol after getting agreement with FDA. So, we plan to be in the clinic in the first half of next year enrolling patients. Do you expect to test one dose or both the doses from Lotus? So that's TBD. My preference would be to make it as simple a trial as possible. We believe the 300 milligram four-week dose with the 600 milligram loading dose, what I call the 600, 400 or 600, 300 dose is really the best for patients and did show both doses were very effective, but that dose looked a little bit more effective to us, I think would be, would be the right dose to test. We'll talk about that with FDA though, whether, whether or not it would make sense or they, or they want us to run a second dose. Yeah. And then would you expect Lotus counts as a pivotal and do you plan to run two phase threes or, you know, how, how do you think about that? We, we do plan to Run to phase threes. And Now, I would say this, that LOTUS was run to a pivotal standard and could be used as a pivotal trial, similar to the experience that Moonlake had with FDA. I don't think we want to go in there proposing that we use it as a pivotal trial. It is only a 16-week trial, but it could serve that purpose if we needed it. And that de-risks the program very substantially for us because we already have a very robust positive study in there. And there is basically an FDA precedent with Moonlake in using such a study if it were to be needed. But we think we will have the most de-risk program by doing two phase three trials. However, we haven't had our discussion with FDA yet. And so something may come out of that, which changes our view on that and helps us to simplify the program even a little bit more. And you alluded to this, the translatability from phase two to phase three, you feel good about the Lotus trial, the design, the execution there. I guess, you know, some folks will point to, you saw an effect size regression for bimacizumab into phase three. You seem to have seen that for somalocumab as well. I guess what gives you confidence that you can replicate the signal you saw in phase two and phase three? Again, I mean, if you look at some of the other smaller phase twos, they're clearly positive. And they did, but they may have had a little bit optimistic effect size based on a single dose, for example, versus another dose. The consistency of our dose response across the exposure, the size of the trial, the depth of response across all of these different secondary endpoints, and the temporal relationship. There's no wobble, so you didn't have to get lucky that it just happened to give you a good separation at week 16. We saw early separation that continued to diverge all the way through the clinical trial with both doses and by multiple measures. So I think taken together, and plus, you know, as we continue to look through the biomarker data, we know that we're addressing the target very, very well. And I think that taken together all of that says that we have a very, very high likelihood of being successful in phase three. I've been doing drug development for over 30 years, many successful programs, and I feel really good about, as good about this one as I do about any program I've ever taken into phase three makes sense. So maybe the last few minutes, do you want to touch on, you know, pipeline 010 through your half-life extended product and indication expansion as well? Yeah. I mean, we're, we'RE really excited about it because we do expect it to have, it's already demonstrated prolonged half-life in animal studies. We need to verify what the actual half-Life is in humans. It's a little bit difficult to extrapolate. So I'm not going to give you a number on it, but we feel like that's going to be a real advantage. First, it is convenience because in chronic inflammatory diseases, less frequent dosing can matter to patients and physicians. And it is specifically engineered to enable longer dosing intervals. Second is life cycle and franchise expansion. It potentially gives us another molecule for HS, but it also creates flexibility to pursue additional IL-1 beta-driven diseases with a differentiated dosing profile. And remember, we're, I mean, we'RE in HS in particular, we believe that the potency of the molecule and its specificity and its affinity are really critical for maximizing the effect, and we're able to preserve that with the O10 molecule. The third advantage is intellectual property. A next-generation molecule gives us kind of a fresh set of downs, an opportunity to establish new composition of matter protection and extend the value of our IL-1 beta franchise. And longer term, it could potentially provide a very attractive backbone for combinations or bispecifics, because as you know, very often when you do a bispecific, you unintentionally, or the unintentional consequence of that engineering is a shorter half-life. Here you've already extended the half-Life so you can prevent a degradation there. So we plan to submit the IND the first half of 2027. Everything's gone very extremely well on the engineering and manufacturing. And I think it also demonstrates that we, Avalo, are able to engineer these molecules as well. We have that capability and we can bring them forward. Great. Well, then maybe last question. Can you talk about your current cash runway and what's embedded in those assumptions? Yeah, we reported over $400 million at the end of June after our fundraise of $430 million in May. We had an adequate cash runway to get through 29 and through our phase three top line program with additional funds available for us to do the 010 program and another indication which we'll be announcing in due course so we're in great shape we've eliminated a lot of our financial overhang great well Gary thanks again for joining us really appreciate it you're more than welcome a pleasure to be here