Corvus (CRVS) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Vice President, Investor Relations and Corporate Communications - Zack Kubow
• Chief Executive Officer - Richard A. Miller
• Chief Financial Officer - Leiv Lea
• Chief Business Officer - Jeffrey Arcara
• Senior Vice President of Pharmaceutical Development - Ben Jones
• Vice President of clinical development - Suresh Mahadevan

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TAKEAWAYS

• Research and Development Expense -- $17.8 million, representing an increase from $8.5 million for the same period in 2025 due to higher clinical trial costs for soquelitinib and increased personnel costs.
• Net Loss -- $20.3 million, compared to $10.2 million for the same period in 2025, reflecting higher operating expenses to support clinical pipeline expansion.
• Cash and Marketable Securities -- $202.9 million as of Sept. 30, 2026, including approximately $189.4 million in net proceeds from a follow-on offering completed in the first quarter.
• Cash Runway -- Into the second quarter of 2028, based on current cash positions and operational plans for clinical development.
• Phase 3 PTCL Enrollment -- 150 patients total, evaluating soquelitinib against physician's choice of chemotherapy for relapsed or refractory peripheral T-cell lymphoma.
• PTCL Futility Analysis -- Anticipated in the first quarter of 2027, which will be conducted by an independent data monitoring committee after a predefined number of progression-free survival events.
• SEERA-1 Atopic Dermatitis Enrollment -- 200 patients targeted for the Phase 2 randomized trial evaluating three soquelitinib doses versus a placebo.
• SEERA-1 Top-Line Data -- Anticipated in the third quarter of 2027, following a 12-week treatment period and a 90-day follow-up.
• Angel Pharma AD Cohort 1 -- 24 patients completed enrollment in China, evaluating doses of 100 mg twice per day and 200 mg once per day.
• Angel Pharma AD Data Timing -- March 2027, allowing for the completion of 12 weeks of therapy and a 30-day post-treatment follow-up period to maintain blinding.
• Hidradenitis Suppurativa Enrollment -- 25 patients targeted for the Phase 1b trial, with enrollment currently ahead of the internal plan due to strong investigator interest.
• HS Trial Dosage -- 200 mg twice per day for 12 weeks, focused on safety and achieving HiSCR 50 or 75 clinical responses.
• Asthma Trial Initiation -- First quarter of 2027, with a design intended to include both T2 and non-T2 patient populations based on the mechanism of ITK inhibition.
• Non-T2 Asthma Market -- Up to 40% of the asthma population, representing a patient subset with limited existing treatment options.
• ALPS Clinical Activity -- 3 patients treated for one year demonstrated positive responses, including the ability to discontinue background corticosteroids and immunosuppressive drugs.
• Asian American AD Subset -- 11% of the total 72 patients in the Phase 1 trial, showing significantly elevated serum IL-17 levels at baseline compared to non-Asian populations.
• Angel Pharma AD Cohort 2 -- Enrollment scheduled to begin in Nov. 2026, with data expected in the second half of 2027.
• HS Efficacy Benchmark -- 50% to 60% for HiSCR 50 and approximately 30% for HiSCR 75, which management identified as the competitive hurdle for an oral therapy.
• Asthma Cutoff Threshold -- 150 eosinophils per microliter, used to differentiate between T2 and non-T2 patients for the upcoming Phase 2 trial.
• Equity Method Investment Loss -- $0.9 million, related to the company's investment in its China-based partner, Angel Pharmaceuticals.
• Stock Compensation Expense -- $2.8 million for the three months ended Sept. 30, 2026, compared to $1.2 million for the same period in 2025.

SUMMARY

Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) reported a significant expansion of its clinical pipeline for soquelitinib, an ITK inhibitor now being evaluated across oncology, dermatology, and respiratory indications. Management reported that enrollment remains on track for the registrational Phase 3 trial in peripheral T-cell lymphoma, with a critical futility analysis expected in early 2027. The company is simultaneously advancing Phase 2 trials in atopic dermatitis and has initiated a Phase 1b study in hidradenitis suppurativa, where early investigator interest has driven enrollment ahead of schedule. Strategically, the company stated it is leveraging soquelitinib's ability to modulate both Th2 and Th17 pathways to target autoimmune diseases that are often resistant to standard biologics, including non-T2 asthma and Th17-driven atopic dermatitis phenotypes.

• Management stated the futility analysis timing is determined by the accumulation of clinical events rather than a fixed schedule, ensuring the trial proceeds based on mature safety and efficacy data.
• Chief Executive Officer Miller stated, "Asian American patients had significantly elevated levels of serum IL 17 at baseline compared to the rest of our non Asian population," suggesting a specific efficacy opportunity in populations with Th17-driven disease.
• The company plans to transfer the IND for soquelitinib in ALPS from the NIAID to Corvus, intending to expand the study to include pediatric patients and additional treatment centers.
• Miller noted that soquelitinib may be used as a first-line systemic therapy or in later-line settings for atopic dermatitis because the mechanism of action does not overlap with existing JAK inhibitors or biologics like Dupixent.
• Management identified hidradenitis suppurativa as a primary target because soquelitinib is an oral therapy that has shown the potential to reduce both Th17 levels and fibrosis, which are hallmarks of the disease.
• The delay in disclosing Angel Pharmaceuticals data to March 2027 was implemented to ensure the trial remains fully blinded through a 30-day post-treatment follow-up period for all 24 patients in the first cohort.
• The upcoming asthma trial will utilize a design that allows for the discontinuation of either the T2 or non-T2 disease arm if an interim analysis demonstrates futility.

INDUSTRY GLOSSARY

• ITK: Interleukin-2-inducible T-cell kinase, an enzyme primarily expressed in T cells that plays a role in their differentiation and function.
• PTCL: Peripheral T-cell lymphoma, a group of mature T-cell malignancies for which there are currently no FDA fully approved treatments.
• ALPS: Autoimmune Lymphoproliferative Syndrome, a rare genetic disorder characterized by the accumulation of abnormal T cells.
• HS: Hidradenitis suppurativa, a chronic inflammatory skin condition causing painful nodules and abscesses.
• HiSCR: Hidradenitis Suppurativa Clinical Response, a clinical trial endpoint measuring the reduction in inflammatory lesion counts.
• EASI: Eczema Area and Severity Index, a standardized tool used to measure the extent and severity of atopic dermatitis.
• Th2 and Th17: Subsets of helper T cells that produce cytokines involved in allergic and inflammatory diseases.

Full Conference Call Transcript

Operator: Good afternoon, everyone, and thank you for standing by. Welcome to the Corvus Pharmaceuticals third quarter 2026 business update and financial results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. And instructions will follow at that time. It is now my pleasure to turn the call over to Zack Kubow, Vice President, Investor Relations and Corporate Communications. Please go ahead, sir.

Zack Kubow: Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals third quarter 2026 Business Update and financial results conference call. On the call to discuss the results and business updates are Richard A. Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; Jeffrey Arcara, Chief Business Officer; Ben Jones, Senior Vice President of Pharmaceutical Development and Suresh Mahadevan, Vice President of clinical development. The executive team will open the call with some prepared remarks followed by a question-and-answer period. I would like to remind everyone that comments made by management today and in answer to questions will include forward looking statements.

Forward looking statements are based on estimates and assumptions as of today, and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including the risks and uncertainties described in the Corvus quarterly report on Form 10-Q for the quarter ended September 30, 2026. And other filings the company makes with the SEC from time to time. The company undertakes no obligation to publicly update or revise any forward looking statements except as required by law. With that, I would like to turn the call over to Leiv Lea. Leiv?

Leiv Lea: Thank you, Zack. I will begin with a brief overview of our third quarter 2026 financials and then turn the call over to Richard for a business update. Research and development expenses in the third quarter of 2026 totaled $17.8 million compared to $8.5 million for the same period in 2025. The increase in R&D expenses was primarily due to higher clinical trial costs associated with the development of soquelitinib as well as an increase in personnel costs. Net loss for the third quarter of 2026 was $20.3 million compared to a net loss of $10.2 million for the same period in 2025.

Included in the net loss for the third quarter of 2026 and 2025 were noncash losses of $0.9 million and $0.3 million respectively, from Corvus' equity method investment in Angel Pharmaceuticals. Total stock compensation expense for the 3 months ended September 30, 2026 was $2.8 million compared to $1.2 million for the same period in 2025. As of September 30, 2026, Corvus had cash, cash equivalents and marketable securities totaling $202.9 million as compared to $56.8 million at December 31, 2025. Cash as of September 30, 2026 included approximately $189.4 million in net proceeds received in a follow on offering completed in Q1.

Also, announced on June 9, 2026, Corvus invested $5 million in a $13.5 million financing completed by Angel Pharmaceuticals in the second quarter of 26. Based on our cash position at September 30, 2026, our current and our current plans, we expect our cash to fund operations into the second quarter of 2028. I will now turn the call over to Richard, who will discuss our clinical progress and elaborate on our strategy and plan.

Richard A. Miller: Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our update call. We are highly focused on soquelitinib our first in class selective ITK inhibitor and maximizing its potential across a broad range of diseases. We now have soquelitinib in several clinical trials covering a number of areas of medicine. Our priority is advancing our 2 lead opportunities, the registrational Phase 3 trial in relapsed/refractory peripheral T cell lymphoma and our SEERA-1 Phase 2 trial in moderate to severe atopic dermatitis. Both programs are on track and represent significant opportunities to bring needed new treatment options to patients.

Based on soquelitinib's immunologic properties, we are leveraging its novel mechanism of action and broad immunomodulatory profile by strategically expanding its development to include new indications that are currently not well addressed by existing agents. This includes our recently initiated trial in hidradenitis suppurativa our planned asthma trial across T2 and non T2 patients in the ongoing trial in ALPS. Combined with the clinical activities in China conducted by our partner, Angel Pharmaceuticals, we anticipate a number of key data readouts and milestones associated with our pipeline over the next year. We are positioned to generate significant value with our pipeline in 2027. I will start with a brief update on our Phase 3 trial in relapsed/refractory PTCL.

Enrollment is on track with our expectations with the next milestone being a futility analysis anticipated in the first quarter of 2027. As a reminder, the futility analysis will be conducted by an independent data monitoring committee after a predefined number of progression free survival, or PFS, events have occurred. This is event driven not time driven. Based on the data at that point, the committee will determine whether the study should be continued or terminated for futility based on available safety and efficacy data. Corvus will not announce any safety or efficacy data in conjunction with the interim analysis but will disclose the committee's decision to continue or discontinue the trial.

We remain excited about the potential of soquelitinib to provide a new treatment option for patients with relapsed/refractory PTCL, particularly given the challenges with current therapies none of which are fully FDA approved for this indication. On a related note, there will be an abstract published in the American Society of Hematology, or ASH, Annual Meeting Abstract Supplement of research done by a team from Memorial Sloan Kettering Cancer Center that further supports soquelitinib's mechanism of action The MSK team studied pre-, and post treatment biopsy material from 3 patients from our phase 1 trial with cutaneous T cell lymphomas a Th2 derived malignancy involving the skin.

Using very sophisticated spatial transcriptomics, they showed that response to soquelitinib was associated with blocking GATA3 signaling the master regulator of Th2 cells, leading to reduced Th2 cells in the skin. I mentioned this work because it is relevant to the treatment of both PTCL and atopic dermatitis. And adds to the growing body of knowledge supporting the fascinating immunologic properties of soquelitinib. Now for an update on soquelitinib for atopic dermatitis. We remain very excited about the data to date and we are working to advance development and enrollment in the Phase 2 SEERA-1 trial as quickly as possible.

The trial was planned to enroll approximately 200 patients including patients who received prior systemic therapies across 3 soquelitinib doses and a placebo group. The treatment period is 12 weeks with a 90-day drug free follow-up period. Enrollment is on track with our plans. With top line data anticipated in the third quarter of 27. Assuming a successful result from SEERA-1, our strategy is to advance soquelitinib into a Phase III program similar to the other approved systemic therapies for atopic dermatitis. This includes a primary endpoint based on EASI score and IgA score at 12 or 16 weeks of therapy compared to a placebo.

If our current timelines for SEERA-1 hold we could be in a position to start a Phase III trial in 2028. Our goal is to make soquelitinib available as soon as possible for patients and then expand the clinical evidence and label with post marketing studies exploring some of its more unique attributes. Such as post treatment response duration, In addition to our efforts, our partner in China, Angel Pharmaceuticals, is conducting a Phase 1b/2 clinical trial that may provide further evidence in support of soquelitinib's safety and efficacy in atopic dermatitis. While also advancing its development in China.

The ANGEL trial has a similar design to our Phase II trial and is open at several leading dermatology centers in China who have been involved in many global registration trials. It is a double blind placebo controlled trial Angel has completed enrollment in Cohort 1 which includes 24 patients randomized evenly to soquelitinib doses of 100 mg twice per day 200 milligrams once per day, or placebo. This is the same as the lower dose level studied in our phase 1 trial but the treatment period is longer at 12 weeks compared to 4 weeks. Recall, we found evidence of efficacy at these lower doses in our phase 1 trial with 4 weeks of therapy.

We have been working closely with the Angel team on the trial including the review of photographic images of disease from every single patient. Based on current timeline, we anticipate ANGEL and Corvus will announce preliminary data in March 2027. This timing accounts for all patients to complete 12 weeks of therapy and at least a 30 day post treatment follow-up period allowing Angel and us to remain blinded up until this point. The physicians and patients will continue to be blinded for the complete 90 days post treatment which will allow us to evaluate the durability of response. We are pleased with the progress of the ANGEL trial and we are monitoring blinded baseline patient characteristics.

I can report that the Angel patients have similar baseline clinical characteristics to those patients enrolled in our phase 1 atopic dermatitis trial. Of particular interest, and we are pretty excited about this, is that Asian American patients who were enrolled in Corvus' phase 1 trial have very similar characteristics to the patients enrolled in the ANGEL trial conducted in Chinese patients. In our phase 1 trial, Asian Americans accounted for 11% or 8 of the total of 72 patients. Our testing shows that our Asian American patients had significantly elevated levels of serum IL 17 at baseline compared to the rest of our non Asian population and a group of healthy volunteers.

This aligns with the literature which shows that Asian patients and certain other populations with atopic dermatitis have a greater component of Th17 disease. Making them more difficult to treat with existing therapies that only target Th2 pathways. A recent report indicates that some patients have the coexistence of atopic dermatitis and psoriasis either concurrently or as a result of treatment induced phenotype switching between the 2. We anticipate Angel will beginning enrolling patients in cohort 2 this month. November, with data from cohort 2 potentially available in the second half of 2027. Cohort 2 will include 24 patients randomized evenly to soquelitinib doses of 200 milligrams twice per day 400 milligrams once per day, or placebo.

Depending on the results from these 48 patients in cohorts 1 and 2, an additional 60 to 90 patients are anticipated to be enrolled in the Phase 2 portion of the study. Turning back to Corvus, in September we initiated a phase 1 trial of soquelitinib in patients with moderate to severe hidradenitis suppurativa. While there are approved biologic therapies for HS, many patients are in need of new treatment options due to lack of efficacy or results that wane over time. The approved therapies mainly target IL-17, a key downstream cytokine of Th17 cells, which are the primary drivers of this disease. We believe soquelitinib is well positioned in HS because No.

1, we have shown it reduces both Th17 and Th2 in our atopic dermatitis trial and other work. No. 2, we have shown in preclinical studies that it reduces fibrosis Another hallmark of HS No. 3, it is an oral therapy in a category where the majority of approved products and development candidates are injectable biologics. The Phase 1b HS trial is designed to enroll up to 25 patients. All patients will receive a soquelitinib dose of 200 milligrams twice per day for 12 weeks. Followed by a 90-day follow-up period with no treatment. The primary endpoint of this trial is safety and tolerability.

The key efficacy endpoint is the proportion of patients achieving hidradenitis suppurativa clinical response or HiSCR 50 or 75 at week 12. We plan to intensively evaluate skin and blood biomarkers looking for Th17, Th2, Tregs, and related effects. There has been very strong interest in our HS trial While we have only been open about 1 month, we are ahead of our enrollment plan positioning us to potentially report data in the first half of 2027. We are also making progress on the asthma front. This includes our plan to enroll both the allergic or eosinophilic and non allergic type of asthma also referred to as T2 and non T2.

Most asthma drugs and most clinical trials address only the allergic T2 patients. We intend to enroll both types based on our mechanism of action which we believe will address both T2 and non T2 disease. A substantial proportion of asthma patients (up to 40%) have the non T2 type and are in need of new and better therapies. The trial design will include an interim analysis which will allow us to discontinue a disease type such as T2 or non T2 if there is futility. We are on track to initiate the asthma trial in the first quarter of 2027. I would like to report on our work in ALPS, or autoimmune lymphoproliferative disease, a study led by NIAID.

Initial data covering 3 patients enrolled in the trial and treated for 1 year was selected for a poster presentation at the ASH meeting in December and the related abstract was published yesterday. The data is consistent with the safety profile we have seen across our lymphoma and atopic dermatitis trials, in all 3 patients had a positive response to therapy. Key highlights include first, safety. All 3 patients completed 1 year of treatment at the 200 milligram twice per day dose. The treatment was well tolerated, with no interruptions in therapy, and no grade 3 or 4 adverse events reported. Next clinical activity was observed in the 3 ALPS patients as follows.

All 3 patients were able to discontinue their background medications, including corticosteroids, and immunosuppressive drugs. 2 of 3 patients had a drop in circulating proliferating double negative T cells in the blood. These are the pathologic cells in ALPS 1 of the patients had very low circulating numbers to start with making quantitation difficult. Splenomegaly was reduced in 2 of the 3 patients Other disease related markers were also improved. Based on these results, we plan to transfer the IND for soquelitinib treatment of ALPS to Corvus. Our plan is to meet with FDA to expand the number of treatment centers and to reduce the age eligibility to include pediatric patients.

Overall, we believe we are executing on a strategy to confirm the broad potential of soquelitinib and ITK inhibition across a range of Th2 and Th17 driven diseases. In 2027, we have significant milestones across our pipeline with clinical trials covering 4 significant market opportunities. PTCL, atopic dermatitis, hidradenitis suppurativa and asthma. This will be complemented by Angel which is expected to have trials in atopic dermatitis and asthma and the NIAID study in ALPS that is transitioning.

To briefly review our upcoming and 2027 anticipated milestones, initial ALPS data at ASH in December, interim futility analysis from the phase 3 PTCL trial in the first quarter Angel Pharmaceuticals atopic dermatitis cohort 1 data in March, hidradenitis suppurativa Phase 1b results in the first half of 2027; Corvus SEERA-1 Phase 2 data in the third quarter Angel Pharma Cohort 2 data in the second half of the year and the phase 3 PTCL top line data before the end of the year 2027. In addition, both Corvus and Angel plan to launch asthma trials in 2027. The key through line across our development pipeline is the unique mechanism of action of ITK inhibition.

Resetting the immune system, by modulating several key cellular functions with an oral tablet that so far has shown a very favorable safety profile. We look forward to updating you on our progress in future calls. I will now turn the call over to the operator for question-and-answer period. Operator?

Operator: Thank you, ladies and gentlemen. If you would like to ask a question. Your first question comes from Li Wang Watsek from Cantor. Please go ahead.

Li Wang Watsek: Hey, thanks guys for taking my questions. So just in terms of the ANGEL data, looks like it is been you know, pushed out by a quarter. Maybe help us understand the reason for the time line shift. And you noted that the baseline characteristics in the trial is very similar to the US trial. Just wondering which cohort that you are referring to, given there are some variabilities between cohorts.

Richard A. Miller: So Li, thanks for the question. I assume you are referring to the atopic dermatitis trial by Angel. So in the ANGEL patients enrolled so far, that is their first cohort. Their baseline characteristics, blinded baseline characteristics, we can look at things like age, gender, etcetera, other, mean EASI scores, etcetera. So when we look at that, and compare that to the patients that we enrolled in our entire phase 1 trial, 72 patients, we find that the characteristics are very, very similar regarding age EASI scores, IGA scores, etcetera. This motivated us. Obviously we are tracking Angel very carefully This motivated us to go back and look at cytokines in Asian patients enrolled in the Corvus Phase 1 study.

Obviously, there are Asians that are sometimes enrolled in American studies. And when we look at those patients, the baseline characteristics are very, very similar to the Chinese patients. And most interesting to us is many papers show that Asian patients with atopic dermatitis have a very strong IL-17, Th17 component. We confirm that in our US Asian patients. Now the Angel trial is going as planned. We have been very careful about patient selection. Documentation of disease by photographic images, working at the very best centers in China, And so, we are just, you know, enrolling that according to plan. In addition, we.

Before we disclose any data, we wanted to have the full 12 weeks of therapy with 30 days of follow-up and we remain blinded during that period of time. The company, the patients, the doctor, everybody. So that is the reason why we have extended that out a little bit. Does that answer your question?

Li Wang Watsek: Yes. Thank you very much.

Operator: Your next question comes from Graig Suvannavejh from Mizuho. Please go ahead.

Graig Suvannavejh: Good afternoon. Richard, thanks for taking my question. Congrats on the progress and all the updates. I had a question. 2 questions, please. 1, on your futility analysis that you will be announcing first quarter of next year. I think you said on your prepared comments that you are just going to announce pretty much, like, a yes or no answer and not disclose any safety or efficacy. Is that true in either case? In other words, if there was a futility that went negative you still would not wanna share the safety tolerability data. So just wanted to clarify, that and perhaps reasoning. And then, just second, as it relates to your, hidradenitis suppurativa. Readout.

I think, the HI SCR 50 or 75 is are the main efficacy endpoint. I was just curious if you were gonna also share or is there any lesion based clinical endpoints that you have incorporated into the study, and will you be sharing any of that? Thanks.

Richard A. Miller: Okay. Thanks, Graig. Regarding the futility analysis, if the study continues, we would just let people know that. I mean, it would be inappropriate to disclose data publicly at that time because 1 could argue it could bias the remainder of the study. So that is fairly typical. If the study is negative, you stop it. yes, of course, you can disclose data at some point. Now the second question on the HS. There are other parameters that we are measuring in HS. We are very interested in the not just the nodules, but we are also scoring abscesses, tunnels, draining tunnels, all that sort of stuff.

So we are excited about HS because we are pretty convinced now we are having an effect on Th17, a major player in asthma and in HS. A lot of neutrophils in these lesions. Neutrophils come from Th17 effects. So all of these things are sort of coming together. there is a reason behind the diseases that we chose based on the mechanism of action of soquelitinib. So the HS endpoints will look at all this, everything you mentioned. Nodule account, which is just a Hiscar, but we are very interested in the other aspects, abscesses and tunnels.

Because we have previously reported and this is a Th2 mediated effect that soquelitinib has an effect on fibrosis that was published last year and presented at the ACR meeting. It was in a mouse model of systemic sclerosis. I hope that answers your question.

Graig Suvannavejh: It does. Thanks. And then just a quick follow-up on your ALPS program. it is interesting that you are gonna have the IND transferred over to Corvus And I am wondering if you can confirm. Those are the same doses that you previously have tested. And given just the patient population, which tends to be, I believe, a more rare orphan type of a situation versus something more broad like asthma or atop dermatitis, how are you thinking about dosing or pricing, I guess, ultimately, if you were to have success in all of these indications?

Richard A. Miller: Okay. So first of all, thus far, the ALPS patients have been adults, they have been 30 to 40 years old. And the dose has been 200 milligrams BID, same thing we are doing in lymphoma and in AD. Now ALPS is mostly a disease in children. And we are gonna, you know, move. Meet with FDA and move into a pediatric population, expand the number of sites, want to have more control over this study. that is why we are taking over the IND. Obviously, when we go to pediatric population, the doses may change. Based on just the size of the individuals involved.

The I think that the value of ALPS is what it is teaching us about our drug, about ITK and about the immune system. So right now we work in T cell lymphoma and autoimmune ALPS is at the adjacency. The between these 2 areas. We have learned so much from the ALPS patients, not only did it confirm the safety that we have been seeing, in a pretty sick population. But really it is been giving us a lot of information on other diseases that we may want to go after in the future. Now regarding pricing and commercialization, I think it is a little early to talk about that. Okay.

Graig Suvannavejh: You very much.

Operator: Your next question comes from Roger Song from Jefferies. Please go ahead.

Cha Yang: This is Cha on for Roger. Just 2 questions for me. So I just wanna confirm. Your phase 2 AD patients, you said they failed at least once a systemic or topical therapy. But does that mean that they have not necessarily failed Dupi or JAK? Is that correct? Then my second question is about your HS study. Can you just give us some expectations for the data benchmarks in order for a soquelitinib to be competitive in this space?

Richard A. Miller: Okay. Thanks for that question. Let's be clear. On our phase 2 study, You must have failed either a topical corticosteroid or a systemic therapy. But you can have failed more than that. And so we accept patients who have failed Dupi, a JAK inhibitor, or other therapies. or systemic corticosteroids. So that is in distinction to I think most other trials. You can have failed dupi. And in fact, in our phase 1, if you go back and look at the data that we presented at SID, there were several patients who had failed JAK inhibitors or Dupixent. Okay. And the reason we are excited about that is because our mechanism of action does not overlap with those mechanisms.

And so we would not expect nor did we ever see any evidence of cross resistance. Now the second question on HS, what do we expect to see? What we expect. I think that is what you were asking. We expect so that is a trial that we are doing where we have now very good biomarkers to look at. We know what to look for. IL 17, Th17s, and the correlated transcription factors Myeloid cells are going to be really interesting in that setting as well. As well, and this is surprising, is there are a lot of B cells in the HS lesions.

Let me also point out there are a lot of B cells in ALPS patients, even though it is a T cell disease, there are a lot of B cells in their lesions And if you look at our poster at ASH, you will see some work on that in that area. T cells drive B cells. So anyway, we will be looking at all of that. And I think we will be able to get a good feel for whether or not we are seeing efficacy. As soon as we see that, we do not have to wait for all 25 patients to be treated. We can start planning on a more definitive randomized placebo controlled phase 2.

We do not have to wait till the end. Does that answer your question?

Cha Yang: Helpful. Yeah. Thanks.

Operator: Your next question comes from Jeffrey Jones from Oppenheimer. Please go ahead.

Jeff Jones: Good afternoon, guys, and thanks for taking the question. And maybe just to build on the HS question. As you look at you know, the other studies in the field, any feel for benchmark or hurdles that you would wanna see the degree of efficacy or signal that you wanna see to support moving ahead? Then 1 follow-up Yeah.

Richard A. Miller: So I think that, you know, their benchmarks for HiSCR 70 and 50 You would want for HiSCR 50, you want to see 50%, 60% of the patients achieve that for the HiSCR 75 maybe around 30 percent. So I think if we hit that or better, we would be happy with that result with an oral agent with a good safety profile. And of course I did not talk much about it on this call But as you know, we are very interested in durability of response.

Jeff Jones: Yep. Great. Appreciate that. And-- yeah. Go ahead. Them and in follow-up, I guess, then on the AD side, obviously, really interesting as you were just talking about in terms of the patient recruitment and allowing some of these patients who have failed more advanced therapy. Given what you have seen to date, how are you thinking about where soquelitinib would fit in sort of the treatment milieu given the various biologics and approvals out there and some device bispecifics advancing, are there particular patient subsets where you think soquelitinib would sit particularly well?

Richard A. Miller: Based on what we have seen so far from our Phase I study, based on our safety, and based on our mechanism, we think soquelitinib can be an upfront treatment for patients with moderate to severe AD or can be used in the relapse setting. For patients who have already had other therapies. Now keep in mind, there are many other therapies out there now and the pool of patients that are prior systemic therapy experienced is increasing. Which we actually predicted couple years ago when we started working in this area. So Jeff, I think the answer is We have every reason to think that you could use this as a first line systemic therapy or later line.

Greatly appreciated.

Jeff Jones: Thanks, guys. Thank you, Jeffrey.

Operator: Your next question comes from Sean Lee from H. C. Wainwright. Please go ahead.

Xun Lee: Hey, good afternoon, guys, and thanks for taking our question. I just have 1 on the asthma studies. So we noticed that the start is slightly delayed to early next year. So what caused the delay and have you finalized on what kind of patients you are going to be recruiting for this study in terms of, you know, thresholds for T2 or non-T2 groups?

Richard A. Miller: So first of all, we had been talking about late December to start asthma. Given that it is Christmas and New Year's, we figured we figured it would be safer to talk about January. there is no material change in that timeline. As a matter of fact, our IND is already through FDA and everything's fine. What was the second question on the second part of your question was about the types and predefined groups for T2 and non-T2 patients. What are the what-- I am sorry. I mean, what do you have any predefined thresholds for-- Oh, yeah. Yeah. Yeah. Yeah. Okay. I understand your question. Sorry. I did not understand the question. Eosinophil is 150.

If you are above 150, you are T2. And if you are below 150, you are not T2. And then we are also looking at the forced expiratory nitric oxide which is above 25 for the T2. These are very typical. So 150 is our cutoff.

Xun Lee: Okay. Got it. Thank you for that.

Richard A. Miller: Any other questions? No? Okay. Well, thank you for. I think, operator, there are no other questions. And I want to thank everyone for participating in our conference call. We look forward to updating you in the future. Thank you, everyone.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.

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