Absci Corp Aktie

Okay. Good morning, everyone. I'm Sean Laaman, Head of U.S. Mid-Cap Biotech Equity Research here at Morgan Stanley, and welcome to Morgan Stanley's Global Healthcare Conference. Before we commence, to make you aware of some important disclosures, please see those disclosures at the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative.

For this session, we have the pleasure of hosting Absci with Founder and CEO, Sean McClain; and CFO and CBO, Zach Jonasson. Welcome, and thank you both for your time today. Yes.

Thanks for having us.

Maybe just to do me favor and answer some macro questions before we delve into the guts of it. But I guess just looking at China originated innovation, do you have a view on that? Has it changed the way you think about your business development and R&D playbook, if at all?

Yes. Obviously, there has been a lot of activity in China. And I think it's about how you utilize China. We obviously have an AI platform, and we look at China and just how we scale our infrastructure. And so not necessarily going and buying assets there, but working with China to be able to rapidly test these hypotheses, get to yes, no answers on new targets and even looking at how we could potentially utilize them on the clinical development side. And I think that, yes, it's been very interesting to see all the activity going on, but we definitely see it as a net positive for the overall space.

Sure. Thank you. Next question is redundant for you guys because it's asking, are you implementing AI in your business? So we'll skip that one. The third one. So which policy variable are you most focused on? I'm guessing it's FDA, but thinking about FDA Medicare negotiation, MFN tariffs, et cetera. But I'd suggest it's FDA, but which policy variable are you most focused on?

Yes. I think we're most focused on FDA. I mean we're in the middle of our Phase I/II trial for pattern hair loss. We're about to initiate a Phase II trial in endometriosis. So we're following all of that policy activity. And I think, as Sean mentioned, we have a strategy to leverage execution in China, not just preclinical execution, but to do proof-of-concept work in China and Phase II development going forward. So we're following all the developments in Congress and policy-wise from the administration. But we do think there's a significant opportunity there to reduce cost, increase speed and really leverage Chinese execution.

Yes. Wonderful. Thank you, Zach. Now to get into it. So I've got a series of questions here, obviously, on ABS-201 in pattern hair loss to start with. So the interim Phase I across 4 single ascending dose cohorts in 32 volunteers showed no serious adverse events and an estimated half-life, I think, of at least 65 days. That is a single dose estimate. How much could it move with multiple dosing and complete follow-up?

Yes. So far, the trial is going very well. We're very happy with the progress, and we're going to be announcing the Phase II efficacy data in December of this year. The recruitment has been going extremely well and safety profile, really good as well. And we're -- yes, we're really excited to be announcing this data in December.

Okay. So that's the 13-week data coming out in December?

That is correct.

Got you. I guess the commercial thesis rests on 2 or 3 injections over 6 months. What is the minimum durability that still supports that profile? And what happens to the pitch if it lands closer to monthly?

Well, first off, I'd say we're very pleased with what we're seeing on the half-life. So it looks to us like it's going to be either 2 or 3 injections over 6 months, go once every 2 months or once every 3 months. And that, at least from our consumer research, is a game changer for the market because the convenience paired with the durability of the effect based on the mechanism, I think, would be a completely new premium category of therapy for pattern hair loss and resonates extremely well with customers. And when we talk to consumers, we've commissioned a large survey, as you know, they're very dissatisfied with standard of care. So a profile that allows for a very simple injection that infrequently with durable effect is very exciting for that population.

Awesome. And we just mentioned that by looking at the 13-week data in December, so you look at, like, width, darkness, and hair count, if I remember that correctly. And I guess what sort of the benchmark do you think you need to achieve?

Yes. So we've talked about all along. This is a directional readout. This is a brand-new mechanism that is being explored. And when we first started this study, it was really to be able to show, yes, indeed, we are getting the hair regrowth. And we're hoping to actually see some interesting signals. You look at the kenogen follicle, these dormant follicles that haven't been regrowing hair for a while. If you can actually start to show that you can regrow hair there, I think that's very exciting.

There's no other mechanism out there that's able to show that. So we are going to be reporting on various different parameters. Obviously, the most important is the terminal hair growth. And we'll also be looking at total, so including vellus, and then obviously, the darkening as well. And so I think it's going to create, I think, a really nice picture as to what the potential 26-week readout could look like. And again, everything is going quite well, and we're excited to be able to share that in December.

Sure. And when we get to the 26-week data, what sort of hair count are we hoping for? I think it's kind of 30 to 35 would be the best-in-class. So maybe talk a little bit about that. And then what if you sit in that 20 to 30 range? Is there still benefit in providing a drug that delivers that? And maybe just talk through that a little bit, Sean.

Yes. I'll let Zach dive into that a bit more. But if you look at how we came to that 30 to 35, that was actually based off a consumer quant study. And -- that's where we saw a very large TAM, and there was high demand at 30 to 35. I think that there is the opportunity to -- from a biology standpoint to even be higher than that. And I think with even recent minoxidil studies, even being at 30 to 35 could even be not only best-in-class, but first-in-class as well. So we're really excited about the overall opportunity, but I'll let kind of talk more about that.

Yes. I mean, I'll just add that when we did the survey of 610 consumers that have pattern hair loss, we had to present them with a target product profile. So we presented them with a profile that was efficacy similar to high-dose oral minoxidil, so call it, 30 hairs per square centimeter growth in terminal hair count and then the durability of a couple of years based on 3 injections over 6 months. And the response to that TPP was enormous.

I mean, we saw, like, broad-based response for both men and women saying they would seek out that product. They would choose it as first line. And when we tested some pricing, the feedback we got is we could price this at a significant premium. And so taking that all together, we estimate at least at that TPP with that effect size, that's north of a $25 billion TAM in the U.S. alone. Now if the effect size is higher, I think that TAM goes up. We can price even higher.

Maybe remind us of the TAM in the U.S., but the percentage that you view as women. And then I understand that finasteride is essentially unavailable to women of reproductive age, leaving topical minoxidil as the only option. So do you think that the bar is different or lower for an outcome in women versus men?

I mean, I do, fundamentally. You saw Veradermics' readout recently sort of in the low 20s for women. And then a pretty significant portion of those women in their study experienced hypertrichosis, and that's common for minoxidil, right? You get unwanted hair growth. So the side effect profile and efficacy of minoxidil for women is by far less than ideal. And we see that in our surveys, too, Women are very dissatisfied with standard of care. And we think that's a very underappreciated market in pattern hair loss. And I think that the TPP that we're bringing this new category of therapy, I think, is going to resonate with that market.

And when you talk to the dermatologists, too, I mean, they're seeing actually more women coming in with hair loss problems than men. And I think it just goes to show that like standard of care is just really, really poor. And so there is a massive opportunity in the female market in addition to males.

Sure. I just got pinged a little bit, but are you aware of studies that show hair loss associated with Group 1 (sic) [ GLP-1 ] uptake? And is that another sort of complementary angle you could sell?

Yes, 100%. I mean there's published literature that's coming out. And then again, you just talked to the anecdotal evidence with these derms and they're saying like 10%, 20%, even more on GLP-1s are experiencing hair loss. And I think it's due to the stress of the body when you're losing that amount of weight so rapidly. And so I think being able to pair ABS-201 with the GLP-1s, I think, is a real opportunity and a big overall synergy.

Sure, sure. 13 weeks might seem a little early to get a decent response in hair growth. I think minoxidil and finasteride take 24 to 48 weeks to see a decent outcome. What's the risk if you get to the 26-week data and you get a false negative? And how would you frame potentially ambiguous data?

Yes. So as we said all along, so I guess, first off, you hit the nail on the head, like we do think that 13 weeks is probably the earliest time point that you could actually start to see hair regrowth given the growth of hair. And I think you're going to just continue to see a linear increase from there. And again, we think that the 13 weeks is directional. I think that there's a real opportunity to see some new mechanisms emerge that other standard of care aren't able to address. And we're quite excited about what that looks like. And again, so we're not putting any sort of firm numbers on there, but we are going to get very quantitative with the overall readouts at the 13 weeks.

Maybe a little bit on the science of prolactin receptor antagonism is the first new mechanism in androgenetic alopecia for 3 decades or so. And I guess beyond the ex vivo scalp work, what human evidence supports prolactin as a driver of pattern hair loss?

Yes. So we actually just released some genetic data in the last earnings, which actually showed from the UK Biobank, men that had increased levels of SNPs that drove increased levels of prolactin receptor actually had more severe pattern hair loss. And so we are seeing that increase in receptor within the actual follicle is driving pattern hair loss from a population genetics level, which is actually really, really quite interesting to see, and our team was able to publish that work just recently. So I think that's pretty strong genetic evidence in addition to the mouse study, the primate study we did and as well as the human ex vivo data.

Okay. The scalp data point to follicle regeneration and stem cell restoration. Is durability off treatment part of the claim? And would you expect to see it at 26 weeks?

So we're really excited about the regenerative effect that this drug could have. If you look at the stumptailed macaques, one of the things that got us like most excited was not only did you get full hair regrowth at 6 months, you also got repigmentation. And then 4 years post treatment, they continue to regrow their hair. And one of the phenotypes that you see in individuals that are losing their hair as it miniaturizes, they're actually losing the stem cells within the follicle niche and you get a decrease as well in collagen 17A, which attaches the stem cell to the niche. And what we've seen is blocking the prolactin receptor actually replenishes that stem cell increases collagen 17A.

And once you have that, you have the ability to kind of rebuild all that machinery. And once it's rebuilt and you're off drug, it's obviously going to slowly decrease over time. Balding takes quite a bit of time to actually see the full effects. And so that's why we believe we're going to get this regenerative effect because we're affecting the stem cell niche. And again, there's no other drug out there, minoxidil, finasteride, that touches the stem cell niche is able to replenish it.

I'll just add to that too, in the clinical trial, in the HEADLINE trial, we're going to follow each of these patients a full year after their final dose and we'll be taking hair measurements. So we're actually going to be able to track this durability post-treatment.

Got you. This is a systemic antibody injection where I guess the other options are pretty inexpensive generics. How do -- what's the bar for safety here and what do you think you need on the label to be commercially viable?

I mean, I think we're in a great position with respect to safety. I mean, you saw we released the interim data from the SAD portion looking at safety back in June. It looked clean. More to the point, too, human genetics supports the safety. There are case reports in the literature of individuals who have loss of function mutations in either the ligand or the receptor, the prolactin ligand or the prolactin receptor. Those individuals are perfectly healthy. They only present to clinicians because the females can't lactate. But otherwise completely healthy, no sexual dysfunction, including they've done family tree analysis, males also fully healthy. So this looks to be a very attractive mechanism. We don't see any mechanistic reason to think there's a safety issue. And then the molecule we have based on this data looks to be safe as well. So we think we're in a good position.

Wonderful. And this pattern hair loss is largely a cash pay market so how do you think about potential reimbursement and what sort of pricing assumptions do you think about?

Yes, so we think this is an enormous cash pay market. We don't plan on having reimbursement, although I think it will qualify under HSAs in the U.S. In terms of pricing, we have tested some pricing in the field with consumers. We can't comment on the exact numbers, and we probably won't announce, obviously, the actual price till the day we launch, but I can say that we believe based on the TPP we think we're tracking towards, that we'll price this at a premium, and that consumers are very interested in this TPP and will seek it out at a premium price.

Well, sure. And how do you frame your position against potential emerging competition like Veradermics, for example?

Yes, at the end of the day, Veradermics is hitting on a mechanism that's well-known. I mean, if you go to Hims & Hers, you can get oral minoxidil. So there -- that is current standard of care and this is something that is brand new. I think it's again talking about the regenerative effect being able to potentially meet or exceed efficacy of minoxidil having the durability. I think that the there's a ton of upside to current standard of care. And additionally, I think patients are going to likely do combos as well. I mean, given that, how cheap minoxidil is, you could see someone taking 201 plus minoxidil. There's -- these patients are just so desperate to get any sort of hair regrowth that -- and the market is just so massive that I think patients are going to be using all the tools out there and all the drugs to be able to regrow their hair.

Okay, so we've got 13-week data in December, 26-week data is guided to 1H '27 or...

Yes, early '27.

Early '27. So beyond those data points, what sort of gating factors do we have? What are the signposts for further clinical trials and ultimately the regulatory path to market?

Yes, look, as soon as we have the 26-week readout and the safety data, we will go to the FDA with a file an IND to begin registrational studies. Now, what's really interesting about this program and the HEADLINE trial is even as we start to initiate registrational studies, that's our plan, in '27, we'll still be collecting this follow-up durability data from the HEADLINE trial. So there's a lot of data readouts we can provide to investors along the way, and we think this program is really exciting because we'll be showing durability, we'll be showing effect size, and then we'll be starting the registrational campaign.

Sure, thank you. Any sense you're willing to provide of how big the clinical trial might have to be and any sense on cost?

So we haven't released guidance around the size of the trial. We know that we'll need roughly 1,500 patients for a safety database across all of the clinical trials. I can't comment specifically on cost other than to say that pattern hair loss trials, the per patient cost is quite attractive relative to other large indications. We've internally estimated that on a per patient basis, it's in the neighborhood of $60,000, $70,000 per patient, which as you know is probably a third of what an IBD trial would be. And they recruit very quickly. So the ROI on the clinical development program here is enormous. It's not like anything ever seen. The trials recruit quickly, they're inexpensive, and they have objective endpoints that are accepted by FDA, and then there's a huge market with very dissatisfied patients with standard of care.

Sure. Assuming all goes well and ultimately FDA approval, like how do you envisage the drug gets into patients' hands?

Yes, so we think that it's ultimately going to be the patient seeking out the dermatologist or seeking out telehealth companies. I mean, you see that with the GLP-1s. It is the patients seeking out the physicians and wanting to get on these GLP-1s. And I think that same type of demand you're going to see with ABS-201. So, whether you want to call it direct to consumer or kind of a patient first focus, we see that as being critically important and I think being able to partner with these telehealth companies and really also learning from what Lilly has been doing with LillyDirect and being able to get you know access to patients in the most efficient way and I think access is changing.

I also think that AI is, AI plus the GLP-1s is really allowing patients to come along with the journey. Patients can, you know, be, you know, start to become their own scientists, can, become more engaged with the science and the biology and their own health and I think that you know drives kind of a different type of patient engagement and so the HCPs are going to be extremely important but in addition, being able to partner through telehealth companies and having this DTC model is going to be very important as well.

Sure. And this is a physician administered therapy?

No, so this will be at the end of the day at home. Now the -- some patients may actually want to go in to their physician or their dermatologist. So that is definitely an option but what we're planning on is having ultimately an auto-injector that could be sent to the patient, and it could be, again, an experience where they're able to do this at home. They can go have a virtual telehealth appointment with their doctor and have a 201 sent to their house and administer there. And so I think that convenience factor, I think, is critically important.

Sure. Thank you, Sean. Before I move on to endometriosis, is there anything I didn't ask about the androgenetic alopecia side of the equation that I should have?

I think we covered all the important topics for pattern hair loss. I guess I'll just end with -- yes, we're excited for the upcoming data release in December.

Awesome. Thank you. So moving on, the Phase II for endometriosis starts this quarter with proof-of-concept data in the second half of '27. What is the design, primary endpoint and trial size?

So we're going to release more about the trial design in the coming weeks. But you can think of it as being a very robust trial. I think, as you know, our CMO at Absci comes from Vertex and he executed the Vertex pain trial. So fundamentally, the endometriosis studies are all endometriosis clinical studies are pain trials. So we'll be constructing a trial that's well designed and well powered.

Sure. I guess sort of looking historically in this area, multiple programs have struggled to separate on pain endpoints. What makes a nonhormonal mechanism more likely to work?

So with this particular mechanism, we have already seen in the clinic with HMI-115, Phase II data at the highest dose that did show efficacy. Now we think that they left a lot of efficacy on the table. And based on our profile, having the receptor occupancy that we have, we do believe that we will be able to, I think, achieve not only the efficacy that HMI-115 saw, but I think a greater decrease in overall pain. And just to really emphasize what Zach was saying, we do have Ransi, who ran the Journavx late-stage clinical development, which was a really important pain study. And I think we're really set up for success here. And given the preclinical work as well as the clinical data so far, we're very excited about this mechanism and the upcoming readout here.

Sure. Thank you, Sean. And Lilly recently took a $40 million stake and they placed a rep on your endometriosis Advisory Board. Does that carry an option, right of first negotiation, or governance rights?

No, it does not. So this was a $40 million investment, what I'll call tickets to the game. They have no rights to the asset on both pattern hair loss as well as endometriosis. This was an opportunity for us to get to know each other. I think we had very much mutual respect for what each of us was building. I think Lilly's interest was in both pattern hair loss as well as endometriosis. And given the extensive work that they have done in pain and the women's health franchise that they're building out, we thought having them sit on the endometriosis ad board would be really beneficial for us. And so it's been a great relationship and partnership so far. And again, I think it's great for us because we get to build that relationship, but there's no strings attached at all in that.

Wonderful. Moving on to the platform and the partnering model. So you cite 2 programs from AI design to IND in about 2 years at roughly $15 million each. Against industry benchmarks of 4 to 6 years and more than $50 million. What is included and excluded from the $15 million?

So the $15 million includes all of the work to generate a DC, so a drug candidate and then to take that through IND-enabling studies, so to make it Phase I ready.

And ATLAS is described as an agentic discovery engine. Where has it already changed the decision rather than accelerated a step you would have taken anyway?

Yes. It's really fascinating like where things have gone over the last 9 months. I mean I remember when the first agents came out in December of last year. And 9 months later, I feel like it's like 10-plus years of development. And we have developed out ATLAS, those co-scientists who were looking at new novel targets and it's looking at literature, single cell sequencing data, all of the genomics data out there, all of our internal data. And what we're seeing is that it's extremely good at being able to propose new hypotheses on targets. And again, this is all data that has been out there. And I look at it very similar to how we look at prolactin.

Prolactin data and biology has been out there. No one actually acted on it. And the more and more we dig into this, the more we're like, wow, this -- there's so many different aspects that prolactin affects, and it's not just a women's health hormone for lactation. It's involved in so much more. There's got to be other low-hanging fruit out there. And that's what we're seeing like these agentic AI workflows actually being able to do is like what are those low-hanging fruits that are out there that we should be pursuing. And so we're seeing for different indications like 5-plus targets emerge that are really quite exciting.

And you have this alpha, this insight. And so -- and other companies are going to have these insights as well. And what we really focus in on is like how do you actually execute on those insights? How do you scale the biology to get to yes, no answers. Of those 5 to 10 targets in that indication, which of those should we be taking into the clinic? And then additionally, how do we actually scale and industrialize the clinical development. And I think that's where China has really come into play for us, being able to run trials at 1/10 of the cost. You can now start to take more risk in the clinic and you can -- instead of one target, you can do 5 to 10 targets, and you can actually start to collect that data and start to build these world models.

And even if you assume a success rate of 10% to 20%, you still have 1 to 2 targets progressing. And I think this is the exciting piece is you're going to tie in AI with China to really industrialize biotech. And we're -- I mean, I see it everyone sees that we're seeing a data bottleneck. And we have to figure out ways to get human data to find the next new targets for these diseases. And I think that's going to be really kind of where the frontier lies. And that's why we're so focused on how do we scale clinical development to be able to get that data and kind of start to build some of these world models for other indications that we're excited about and kind of age-related and anything kind of direct to consumer.

Thank you, Sean. That's a wonderful answer. Just in the interest of time, just forward to a couple of balance sheet questions. So cash of around $200 million funds operations into the second half of '28, but the Phase II endometriosis start will push burn above the current $27 million a quarter. Does that runway hold through both ABS-201 readouts?

Yes. Well, so it's going to take us all the way through the HEADLINE readout. So we'll see the 26-week data as well as the year follow-up. And then our -- as you know, our goal is to start an endometriosis Phase II study this year that would bring us through the interim readout at least.

Awesome. In the interest of time, did I not ask anything I should have?

I think we covered everything.

Okay. All right. Wonderful, gentlemen. Thank you, Sean. Thank you, Zach. Appreciate your time.

Thank you. Good day and thank you for standing by. Welcome to the ABSEI second quarter business update. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1. again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Alex Kahn, Corporate Vice President and Investor Relations. Please go ahead.

Thank you. Earlier today, Abcise released financial and operating results for the quarter ended June 30, 2026. If you haven't received this news release or if you'd like to be added to the company's distribution list, please send an email to investors at Abcise.com. An archived webcast of this call will be available for replay on Abcise's investor at investors.abside.com for at least 90 days after this call. Joining me today are Sean McLean, AppSize founder and CEO, Zach Jonathan, Chief Financial Officer and Chief Business Officer, and Ranti Somaratni, Chief Medical Officer, Head of R&D. Before we begin, I'd like to remind you that managers will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. These include statements regarding the development and clinical progress of our pipeline programs, including ABS 201, the design, enrollment, conduct, and timelines of our ongoing phase one, two, a headline trial of ABS 201, the anticipated timing of an interim proof of concept data readout for ABS 201 in the second half of 2026 and full proof of concept data in early 2027, the potential advance in a baby into Phase 3 development, the anticipated initiation of a Phase 2 clinical trial of ABS21 for endometriosis in the fourth quarter of 2026, and potential proof of concept readout in the second half of 2027, anticipated characteristics and product profile of ABS21 as a drug product, our target product profile and its attributes, the potential for an expedited development pathway, including the possibility of advancing directly from Phase 1 to anti-COVID-19 Phase 3, our plan engagement with the FDA regarding development strategy, our partnership with Eli Lilly including anticipated benefits thereof and Eli Lilly's participation on our endometriosis advisory board.

Capabilities and anticipated benefits are about platform technology such as Atlas and potential market opportunity and commercial prospects for ABS-201. Certain statements may also include projections regarding potential market opportunity. These estimates are based on various assumptions, including potential regulatory approval, final approved label, and the evolving competitive landscape, and in which could cause our actual addressable market to differ materially from these projections. In addition, certain research findings discussed today reflect participant responses to a hypothetical product profile and do not represent clinical results for ABOS-201. Additional information regarding the risks and uncertainties that could affect our forward-looking statements is set forth in the press release to ABSEI issued today, our most recent annual report in Form 10-K, and subsequent documents and reports filed by ABSEI for diamond design with the SEC. EXCEL is required by law. ABSEI disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements. statements either because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast August 11, 2026.

With that, I'll turn the call over to Sean. Thanks, Alex.

Good afternoon, everyone. Thanks for joining us today. ABPSI continues to execute, and I'll walk you through recent highlights, including key progress on ongoing headline trial, our new partnership with EY Willie, and our $100 million financing completed at the end of June. Starting with headlines. In June, we released positive interim phase one data. The data suggests the study drug was well tolerated with favorable safety and tolerability. And based on interim PK data, ABS-201's half-life supports the potential for just two to three injections over six months. This is exactly why we built our AI platform, to design molecules that meet our target product profile we set out from day one. You've heard us say the prolactin mechanism is underappreciated.

Everything we've learned has only strengthened that conviction, and we believe targeting the prolactin receptor has the potential across numerous diseases. And we are also excited to have a partner who shares in that vision. As you saw in June, we announced that Eli Lilly made a $40 million strategic investment in AMSI. Our partnership with Eli Lilly is tailored around the clinical development strategy for AVS201. And as a part of this collaboration, we are happy to be welcoming a representative from Louis onto our Endometriosis Advisory Board. Zach will provide more details of this partnership later in the call. In addition to Lilly, we've seen elevated interest from the investment community in prolactin biology.

In June, we completed $100 million financing, including the $40 million investment from Lilly from a group of blue chip investors. We're grateful for this support, which enables the continued development of our existing programs as well as future expansion of our pipeline. ADS-201's progress is a testament to the platform and the team that created it. Building on that leadership in de novo antibody design with Origin, we've now extended the platform upstream with Atlas, Abcide's target to lead autonomous science. Atlas is an agentic discovery engine built to remove the bottleneck ahead of design, rapidly identifying and validating the right targets. ATLAS integrates literature, genetics, and single-cell sequencing data to surface and triage novel target hypotheses. These flow directly into ORIGIN for epitope-specific de novo design and then into our in-house wet lab for characterization and pathway validation.

This process closes a hypothesis to molecule loop and turns discovery into a high throughput, fail fast engine by having more shots on goal and better ones. We're already seeing this at work. ATLAS has surfaced potential new indications for a prolactin receptor franchise and independently recovered genetic evidence linking this pathway to pattern hair loss and endometriosis. This is a powerful new tool that every drug hunter at Abcide can now leverage. We'll continue deploying this AI-native platform to create therapeutics like ABS-201 with the potential to change the treatment paradigm for patients. With that, I'll turn it over to Ronzi to walk through the ABS-201 clinical program.

Thanks, Sean, and good afternoon, everyone. In June, we released positive interim Phase I data from the ongoing headline trials of ABS 201. We continue to be encouraged by the emerging safety, pharmacokinetic, and immunogenicity profile observed to date. As we said in June, blinded aggregate interim data suggests study drug was well tolerated and exhibited a favorable safety and tolerability profile. Additionally, based on available interim pharmacokinetic data across all four single ascending dose cohorts, half-life for ABS201 is estimated to be at least 65 days. These results support the potential for dosing two or three times over a six-month period, pending confirmation through continued follow-up across all cohorts. Additionally, new modeling continues to suggest that two to three doses of ABS-201 over six months would be able to achieve greater than 90% receptor occupancy, which we believe is a key driver of meaningful clinical efficacy for hair growth.

These new data are available in the updated corporate deck published on our website today. We are very eager to share our clinical data with you once it's available. Today, we are pleased to share that the multiple ascending dose portion of the study continues to enroll according to plan. continue to anticipate an interim proof-of-concept readout in the form of 13-week data later this year. Then, we anticipate our full proof of concept data in the form of 26-week data in early 2027. As a reminder, the headline trial is a randomized, double-blind, placebo-controlled study. Primary endpoints are safety and tolerability, while secondary endpoints include PK, PD, immunogenicity, target area hair count, target area hair width, and target area darkening pigmentation. will also collect patient-reported outcomes data in this study. The prolaptin receptor mechanism for hair growth is unique.

Unlike minoxidil, finasteride, or nutraceuticals, the mechanism underlying ABS-201 is regenerative for the hair follicle, protecting and promoting hair follicle stem cells, restoring CD34 progenitor cells, and stimulating key growth factors IGF-1 and FGF-1. while decreasing the cation-driving TGF beta-2. This regenerative mechanism is unique to the anti-prolactin receptor pathway and supports the significant durable effects with potential to grow new hair in dormant follicles. Our clinical study is designed to showcase this unique mechanism with our 13-week assessment, which is interim in nature, intended to provide a directionally positive signal. of the mechanism begun to take hold? And is it building all the machinery and building blocks we see responsible for regenerating the hairs? A directionally positive signal of hair growth at 13 weeks would give us even further confidence in seeing more robust hair growth at 26 weeks and beyond, as is supported by preclinical data in the stump-tailed macaque. Altogether, the preclinical stump-tailed macaque data, as well as our human ex vivo data from skin biopsies of both male and female donors, provide robust support for this mechanism and its ability to provide durable hair growth. We are also excited to be progressing our ABS 201 program for endometriosis. As Sean mentioned earlier, we are pleased to be welcoming Axel Haupt, M.D., Senior Vice President, Clinical Investigation at Eli Lilly and Company onto our Endometriosis Advisory Board. And with the safety, tolerability, and PK data generated in the SAD portion of the headline trial, we anticipate initiating a Phase II study for endometriosis in the fourth quarter of this year.

With that, I'll pass it over to Zach to discuss our business strategy and to provide an update on our financials. Zach? Thank you, Chris.

Thanks, Rancey. We continue to focus our strategy on creating and advancing high-value pipeline programs like ABS 201. The primary objective today is the successful execution of our clinical trial for ABS-201 in male and female pattern hair loss and in endometriosis. We are also advancing a preclinical pipeline focused on immunological and inflammatory indications that fit into our broader strategy, including including programs that can ultimately be commercialized direct to consumer. The clinical trial for ABS-201 continues to progress according to plan. We believe this program offers an outsized ROI based on its relatively capital efficient clinical development plan and significant market opportunity. Based on our market research, we estimate a potential total available market greater than $25 billion in the U.S. alone. In addition to pattern hair loss, we also see a significant multi-billion dollar market for endometriosis with potential peak sales of over $4 billion.

These programs are emblematic of how we prioritize and allocate our resources to programs that offer high ROIs based on addressing large underserved patient populations. We are leveraging our leadership in prolactin biology by advancing ABS-201 towards proof of concept in both pattern hair loss and endometriosis, and by progressing our preclinical anti-prolactin receptor program, ABS-202, in an undisclosed INI indication. We are also actively exploring other potential underserved indications for which prolactin receptor inhibition could offer a differentiated therapeutic mechanism. We look forward to sharing our interim proof of concept data in pattern hair loss later this year and our full proof of concept data early next year. As a reminder, our consumer research survey, as well as input from leading KOLs, inform our view that a 26-week increase in target area hair count of 30 to 35 hairs per centimeter squared, roughly on par with high-dose oral minoxidil, would enable a home-run product. Our consumer and KOL research support an estimated $25 billion TAM associated with such a hair growth effect size, given ABS-201's expected unique durability and administration convenience. We believe a target area hair count result above that level would expand the market further, and that a less robust result would still unlock a multi-billion dollar market opportunity.

AVS-201, with its novel prolactin receptor mechanism, is positioned to become a new premium category of pattern hair loss therapy. offering consumers convenient, durable, regenerative air growth. Continuing to execute the development of this program remains our top strategic priority. Our platform continues to evolve and deliver new capabilities and efficiency gains. As you will recall, our first programs were advanced through IND-enabling studies in under two and a half years and under $15 million in total cost. Based on our current origin model improvements in combination with our agentic ATLAS platform, we believe we can significantly improve on these metrics. For example, our latest origin models allow for a 1,000x reduction in library size for identification of high quality leads. We are also finding ways to reduce IND-enabling study timelines based on the quality of our AI design drug candidates, which, for example, are well-suited to high-concentration formulation development.

We anticipate additional efficiency and capability improvements as we further advance our platform. We are grateful for our partners, new and existing, for their support. As discussed, we are excited to be collaborating with Eli Lilly and to welcome a member of their leadership team onto our Endometriosis Advisory Board. Our partnership with Eli Lilly is tailored around the clinical development strategy for ABS 201 and does not confer rights to the program, which we plan to develop ourselves. We appreciate Eli Lilly's support as well as their interest in prolactin biology within pattern hair loss, women's health, and beyond. Turning now to our financials. Research and development expenses were $22.6 million for the three months ending June 30, 2026, as compared to $20.5 million for the prior year period. This increase was primarily driven by advancement of ABSI's internal programs, including direct costs associated with external preclinical and clinical development of ABS-201, offset by a decrease in personnel-related costs.

Selling general and administrative expenses were $9.2 million for the three months ending June 30th, 2026 as compared to $8.5 million for the prior year period. This increase was primarily due to stock-based compensation and other administrative costs. Cash, cash equivalents, and marketable securities as of June 30, 2026 were $201.1 million as compared to $125.7 million as of March 31, 2026. In June, we completed an underwritten offering of common stock. The net proceeds from the offering were approximately $93.6 million. Our current balance sheet, including this additional capital, supports our execution of key upcoming catalysts and continued progress of our early stage pipeline, as well as the as well as an expansion of our planned endometriosis clinical trial. As we finalize our clinical trial design, we anticipate sharing additional details of the endometriosis clinical development plan later in the third quarter.

Based on our current projections, we now believe our cash, cash equivalents, and marketable securities will be sufficient to fund our operating plan into the second half of 2028.

that. I'll now turn it back to Sean. Thanks, Zach. As always, I want to thank the Abcide team for making all this possible. I'd also like to thank Eli Lilly for their partnership and all of our investors, both new and existing for their support. We're fast approaching pivotal moments for AbSci. The first look at interim POC data for pattern hair loss is anticipated later this year. Our full 26-week POC data should follow early next year, where we anticipate showing robust hair regrowth from our regenerative prolactin mechanism. I'm incredibly excited for both of these readouts.

We're energized for what we're building in our early stage pipeline. We see a huge opportunity to capitalize on the interest in total vitality, combined with consumer shift towards more direct-to-consumer and cash-pay products. Our current and future pipeline focuses squarely on these emerging trends. We continue to fire on all cylinders, and I can't wait for everyone to see the results of our hard work in the coming months.

Operator, let's open the call for questions. Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. In the interest of time, we do ask that you please limit your questions to one question and one follow up. Please stand by while we compile the Q&A. Q&A roster. And our first question comes from Brian Cheng of JP Morgan. Your line is open.

Hey, guys. Thanks for taking our question this afternoon. Maybe just to start off, we noticed that your indication on your press release is now defined as pattern hair loss. And I think in the prior communication, you have been indicating that the lead indication has endogenetic alopecia. So is there any... you read or in terms of how you're defining the target indication today? Is there any change in terms of the lead indication for 201? And then we have a quick follow-up. Thank you.

Yes, thanks, Brian. It's a great question. So we decided to change the name for two reasons. First, if you think of androgenic alopecia, you know, it implies the androgen receptor, and we know that targeting the androgen receptor receptor such as, you know, fenestride or other antigen receptor antagonist do not fully regrow hair. And we do have evidence that does support that, you know, Prolactin looks to sit upstream of the androgen receptor and actually drives androgen receptor expression. And so, based on the underlying biology and the importance of prolactin within pattern hair loss, we decided to, you know, switch the name from androgenic alopecia to patterned hair loss. Additionally, we had gotten feedback from other KOLs that they thought that this was a more appropriate name. And the last piece is on the consumer front.

We think that pattern hair loss is much better understood amongst consumers than androgenetic alopecia and So we, you know, for all of these reasons, you know, we have changed the name, but not the indication itself. And Ramzi and Zach, please chime in if there's anything else I missed there.

Yes, thanks, Sean. So, yes, I mean... Sorry. Go ahead, Zach. Yes. Thanks, everyone. No, no, go ahead, Brancy. I think the term pattern hair loss also encompasses the entire population. Like we're still studying the same population or indications encompass the same population. But really, when you think about the disease state in the US, there's 80 million people and 30 million of those are women, so we think the term pattern hair loss is more appropriate to describe who it is that we are targeting.

Thank you, Rance. Just a follow-up. I was just going to add to the change in name does not have any impact on how we've assessed the market opportunity. It's still fundamentally the same market opportunity number of patients. Our consumer surveys were focused on identifying that, so this does not have any effect on those estimates.

Thank you. That's very helpful. And as a follow up, I think, you know, in our prior discussions, we all have a pretty good sense of what we want to see in terms of non-valid hair counts at week 13 and week 26 from your mat portion. And just looking at other metrics, I think you have mentioned that the the terminal to VLESS ratio metric is also super important in terms of giving you a directional insight of whether ABAS 201 is giving you some benefits towards the goalposts. Can you help us think about what is the magnitude that you want to see in terms of T to V ratio And I'm also curious if you have a sense of what some of the current center of care can offer in terms of the racial changes at around week 13. Thanks for your help. Yes, Ramzi, do you want to take that one?.

Yes, so it's an interesting question. I think we're, at least for the interim, we're interested in abroad. a set of data. I'm particularly not focused on a specific V to T ratio. And I honestly, Brian, I'm not sure I've seen specific V to T ratios from other programs.

So, can't really answer that one for you. Yes, and I think how we're thinking about the 13-week is really looking at not only the terminal, also V to T, but also the potential to regrow hair in dormant follicles, whether that comes up as a terminal hair, a valous hair, or you have more V to T transition. I THINK THE KEY POINT WITH THIS READOUT IS BEING ABLE TO SHOW POTENTIALLY NEW MECHANISMS other drugs do not show, and I think regrowing that dormant follicle where you've been bald for many years, we start to see changes there, again, whether it's on the vellus hair or the terminal hair. We think that that's really exciting and could be a big game changer for this particular mechanism in addition to the regenerative.

aspect. And, Brian, that's why we talked about total hair count in the past, and that encompasses what Sean was just talking about.

Thanks, guys. Thank you. And our next question comes from Brendan Smith of TD Cowan. Your line is open.

Great. Thanks for taking the questions, guys. I wanted to just first clarify quickly on 201. Is it maybe fair for us to assume, you know, you'll get the interim data in hand, put it out, officiate an endometriosis study, and then full POC hair loss data in Q1 thereafter? Is that kind of just a fair assumption on the order of events coming up there? And then to follow up on the platform, itself sounds like plan outside of prolactin receptors still largely, you know, develop targets outlicensed prior to entering the clinic on your own. So if that is the case, I guess, just wondering on a strategy level, how we should think about potential cadence of new assets coming out of the platform, if you kind of have a target, you know, partner deal cadence in mind, just any color there on output that we should keep in mind over the next, I don't know, 12 weeks.

months. Thanks guys. Yes, thanks Brendan. So to your first point, I think that that's a fair assumption. On the second point, We are planning on taking ABS 201 to market ourselves. And everything that we have coming behind ABS 201, we are looking at it from the lens of what could we commercialize ourselves? What could potentially be at BTC that you could sell alongside ABS 201 201 and then make the determination, you know, do we have the capital as the cost of capital right to continue to develop this ourselves? Or do we want to find a partner given the indication or the cash situation? But everything we are developing would be with that commercialization in mind and then we have the optionality to partner. That is the current strategy we have and Zach, please chime in as well.

Yes, I think you said it well, Sean. I think the only other point I would make is, Sean described some of the advances in our platform. So we're becoming more and more efficient at generating new molecules and new programs. And so I think we will be creating a lot of optionality for ourselves. But to Sean's point, we're very rigorous about providing like a strategic and ROI-based perspective on which programs we will advance next. with our own balance sheet versus the ones we'll partner. Thank you.

And our next question comes from of Guggenheim, your line is open.

Great, thanks for taking my question. Maybe one just quick follow up on the conversation around the partnerships. I think last year you guys had talked about likely signing a partnership by the end of the year. I don't know if that's happened or not, so I'm curious, would all your partnerships be disclosed, or have you signed any since later last year? just were not disclosed publicly. So maybe any sort of update on that side would be helpful. And then the other question I have is just around this 13-week data, which obviously everyone's very eagerly waiting for. And then just to maybe sort of level set expectations, if you can sort of share what you plan to disclose in the top line release so we all know what to expect there.

And sort of tied to that, I know one of the big – potential selling points of 201 would be the durability of the hair that's re-grown. We're not going to know that at 13 weeks, obviously, so I'm just trying to get a sense of how you think about how long the duration of follow-up would need to be before you start getting comfort that this dosing regimen that your target profile is is the right dosing regimen for the durable response. Thanks.

Yes, thanks Vamo. So in terms of partnership, you know, the partnership that we had had inked with uh ui lily uh both the the investment and you know the collaboration on uh abs 201 on clinical development uh we we do see that as achieving uh that large pharma partnership uh And with regards to the top line readout for the 13 and 26 week, I'll hand that over to Ron C.

Hey, Vamil, thanks for the question. Yes, so we're going to show the data that we think will give us that interim look, just sort of a status check on what the drug is doing. So we talked about total area hair count, so that'll be their target area hair count, the terminal hairs. We'll get a look at target area hair width to see how wide the hair caliber is. And we'll be looking at darkness as well. So I think those are the big things. And in addition, we'll have a look at the updated safety and tolerability data as well.

Great question on the durability. We are actively working on trying to figure out how we can get that from this study. It's not going to be answered in the 13 or the 26 weeks. We do have a safety follow-up period after this trial, and that's probably the first indication of durability of effect, and we'll get the same duration of safety follow-up on the cohorts. It's based on PK. And we're looking at what to do thereafter in terms of describing the durability of effects. So more to come on that.

Thank you. Thank you. And our next question comes from Kambiz Yazi of BTIG. Your line is open.

Thank you so much for the question. So it appears from your modeling that you confirmed ABS201 can maintain greater than 90% prolactin receptor occupancy without cycling. How should the greater, more sustained receptor occupancy impact efficacy compared to other prolactin receptor antibodies? in pattern hair loss, and then secondarily as in endometriosis. Thank you so much. Yes, it's a great question, and we actually just put out some modeling on the website today with the updated corporate back end. I think it's a very clear illustration. If you look at HMI 115, the every two-week dosing at 240 milligrams. You saw this oscillation that occurred, you know, between 60 and 70% receptor occupancy.

And we know that the receptor occupancy or the prolactin receptor needs to be, you know, well above, you know, 90% to achieve, you know, know, the signal blocking that's necessary. Even a little bit of receptor left can cause, you know, quite a bit of signaling through the prolactin receptor. And essentially, you know, the HMI 115 molecule without oscillation and not achieving the receptor occupancy, is that they essentially weren't able to achieve the efficacy because they weren't able to get that prolonged antigen phase. And so that's what we believe that we are going to be able to achieve now. If you look at, again, the receptor occupancy, those two to three doses were well above 90%, can ensure that the follicle can stay in the prolonged antigen state in order to rebuild that stem cell niche. Hair growth doesn't happen overnight. You need that sustained period of blockade in order to get the regrowth. And I think the really like, look, if you look at the stumptail macaques, when you got the greater than 90% receptor arc density, I mean, you saw a really, really robust efficacy there.

And, you know, we're obviously targeting 30, but I do believe that if you get the mechanism, if you hit the receptor, you know, appropriately here, appropriately to stay in the antigen state, I think you have the potential for even FURTHER UPSIDE THAN WHAT WE'VE BEEN DISCUSSING. I THINK IT'S A REALLY EXCITING OPPORTUNITY WITH THE PK PROFILE THAT WE'VE BEEN ABLE TO And then a quick follow-up, how do you expect that to impact endometriosis?.

Ronzi, do you want to take that one? Yes, happy to. I think it's the same philosophy, Kambiz. If you look at the other prolactin receptor antibody, you know, they published their data in the Lancet, and you saw that there was an effect on dysmenorrhea at the highest dose, and I think the same principle applies, and that you have to really... achieve that high level of receptor occupancy to see efficacy there. So even though it's a disease state that's quite different from pattern hair loss, we think the same principle is in play.

Thank you so much. Thank you. And as a reminder, if you have a question, please press star 1-1. And our next question comes from Gil Bloom of Needham. Your line is open. Good afternoon. Thanks for squeezing me in.

We saw some interesting data for the oral minoxidil extended release from varidermics in women. Do you think the data that they put out changes maybe where the bar is as it relates to women? hair regrowth or it doesn't really matter as it relates to your own programs. Thank you.

I mean, the data that they put out, I mean, clearly shows that standard of care is really poor, even with what they have. There is so much more room to improve from a standard of care perspective. And that is something we're very excited about. We recently showed. the female ex vivo data. It looked very similar to what we saw in the males. And we're very excited to get this cohort ticked off in this study in female patients. And I think that there is a, a real exciting opportunity just due to the really, really poor standard of care out there.

Thank you. This concludes the question and answer session and also today's conference call. Thank you for participating and you may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Great. I'm Sean McClain, Founder and CEO of Absci. We're a generative AI drug creation company. So when I founded the company 15 years ago, originally, we were not focused on AI drug discovery. We were focused on how we can scale technology to look at protein-protein interactions, and we were an early adopter of generative AI in 2018, looking at how we could take this protein-protein interaction data with these transformers and really be able to go after hard-to-drug targets and start to engineer biology to be able to go after hard targets like GPCRs, ion channels, and we're at an exciting inflection point now in the history of Absci where we're actually starting to see the drugs that we've designed with our AI go into the clinic. And within the next 24 months, we'll have 2 Phase II clinical readouts from ABS-201 for androgenetic alopecia as well as endometriosis. I think it's a very, very differentiated pipeline that we're building out with the prolactin receptor biology.

So when we think about drug discovery and utilizing AI, we think about it in the sense of being able to industrialize it, being able to get more shots on goal. And I think if you look at what we've been able to do to date being able to get drugs into the clinic for roughly $10 million to $15 million of investment when traditionally that takes $50-plus million. It's really exciting to be able to see that you can start to fail fast with these investments. And you start to look at China, along with agentic AI and these foundation models that are being built, you can start to see where you can very, very rapidly get to go from target to a Phase II proof-of-concept readout in a very short amount of time with very low cost. And that's a future that we see and that we're looking to build. And as I mentioned, we've used our pipeline and technology to build a very differentiated asset, ABS-201 targeting the prolactin receptor for androgenetic alopecia and endometriosis, which I'll talk more about.

So as I mentioned, we're using AI to really be able to design the antibodies to have the properties that we want to be able to go after these hard-to-drug targets, ion channels, GPCRs have been notoriously hard to drug. One of our partnerships with Almirall, we have shown that we can go after an ion channel that had been known for the past 20 years. No one had been able to actually drug this particular ion channel, and we're able to use our Origin 2 pipeline and technology to actually drug that ion channel opening up new opportunities within that particular indication.

We came out with an exciting update to our AI platform, an exciting foundation model, Origin 1, where we're able to show that we could go after what we call 0 prior epitopes. So epitopes that have no structural information known to them. So there's no antibody complex to that particular target of interest, really being able to show that we can go after new novel targets and new novel epitopes. We're the first group to our knowledge, to be able to show this. We recently came out with an updated manuscript on this, and we're excited to, again, be using -- utilizing this to create differentiated assets. So in addition to partnerships that we've had in the past with pharma companies like Merck and AstraZeneca, I mentioned Almirall, we're also building out our own internal pipeline, and we have ABS-201 that is in a Phase II clinical study right now for androgenetic alopecia. And the endometriosis study on this program will start at the end of the year. And additionally, we do have exciting new early-stage assets that are in development that I would say, complement the prolactin receptor pathway and kind of this DTC market that's emerging within these 2 indications.

So ABS-201, this is an exciting new opportunity in the first indication, which is androgenetic alopecia. So think hair regrowth. This is pattern baldness that you see in both males and females. And it affects 80 million Americans alone. This is a huge unmet medical need. There hasn't been a lot of innovation within the space for the last 20 to 30 years. The same 2 targets are continuously hit the androgen receptor and finasteride and then you have minoxidil. Again, these are not giving the patients the durability that they're looking for as well as efficacy. And I think that there's a lot of white space to improve on within this category.

So what is prolactin doing in the hair follicle and in hair regrowth and just hair biology in general? What we've been able to find is that prolactin stress-inflammatory axis and from data that we've been able to generate and what's out in the literature is that it is driving this inflammatory process and fibrotic damage within the scalp, and it's driving the hair follicle into the catagen state and ultimately driving the miniaturization of the follicle. And what we're seeing is that if you block this receptor, you're able to reverse the miniaturization and rebuild the stem cell niche, which I'll talk about later in these upcoming slides.

So how does ABS-201 compare to standard of care? We looked at a hair regrowth model in mice. This is a shaving study. And what we were able to show when comparing ABS-201 to topical minoxidil 5%, we were able to show superior hair regrowth and efficacy when compared to oral minoxidil. Now what got us really excited about this particular mechanism in the first place was the work that Andreas Busch did, our former Chief Innovation Officer, while he was at Bayer. And what you see in the data up here are Stump-tailed Macaque. These are a population of monkeys that naturally go bald, and you're looking at the tops of their head. And they were treated for 28 weeks with an antip-prolactin receptor antibody and you can see that by 6 months, they have [indiscernible] they get their pigmentation back. So you see they go from gray to their jet black hair. That's pretty remarkable to get pigmentation back, regrowth. But what was even more remarkable here was post treatment for 4 years, they continue to regrow their hair. This is a true regenerative effect.

Essentially, the body was able to heal itself and to regenerate the necessary machinery for that follicle to continue to grow. And we have a hypothesis as to why this is, and it all comes back to the stem cell. And we were able to elucidate some of this mechanism through a hair regrowth study that we did with Professor Ralph Paus at the University of Miami, a leading hair expert who developed this ex vivo model where we were able to take scalp biopsies of individuals, in this case, males and really be able to start to understand the mechanism of prolactin and what's going on. And this was a 72-day culture, and we compared the ABS-201 compared to prolactin. And you can see here from the microscopic hair cycling imaging that ABS-201 is able to drive the follicle into the anagen state and prolactin drives it into the catagen. And we have the full data set from this collaboration that we did at our KOL Day in December. So it is online, if you'd like to see it.

I will just highlight one piece here before moving on to some new exciting data that we are going to announce today. And this is on the stem cells. So what you see here is ABS-201 is able to increase the number of K15 stem cells in the niche. And what you see on the bottom left-hand chart is that prolactin drives the apoptosis of the K15 stem cells. And this is really important because what you see over time is the stem cell population being depleted in those balding regions. And so being able to replenish the stem cells is very key to being able to get that durable effect that you saw in the Stump-tailed Macaque.

And another piece of information, which we'll be sharing more later on, is that it does look like prolactin does increase collagen 17A, which actually anchors the stem cell to the bulge into the niche. And what you see with a lot of the literature that's out there is that the collagen 17A decreases over time. And so seeing prolactin or seeing ABS-201 increase the collagen 17A in addition to the stem cells is very encouraging and again, what we believe is giving us that durability. So one of the new pieces of data that we're presenting today is on the female. So we've presented data to date on males. And one piece of -- that we've been asked by investors recently is how does this work in females. And we have strong confidence that this would work in females. You see it in female mice, you see it in the female Stump-tailed Macaque.

We wanted to take a look at the scalp biopsies in female. And these are premenopausal females. We have postmenopausal females as well that is ongoing. We'll share that data once it's available. But what you see is a very similar effect in females or in males that you do in males. So as you block the receptor with ABS-201, you see an increase in the anagen phase. And when you add prolactin, you see it driving it into the catagen phase. And so again, this lines up very nicely with what we are seeing in the Stump-tailed Macaque as well as the mice and what we saw in males. So we are excited to be sharing this with you all today.

And just to round this study out, in addition to the stem cells, what we additionally saw from this study was 2 key growth factors, increased FGF7, IGF-1. These are important for driving the follicle into the antigen state. We also see proliferation of the hair matrix with the keratinocytes. And also, we see a decrease in TGF beta, again, when you're blocking the prolactin receptor. All of these are critically important for ensuring that all the necessary machinery is there to reverse the miniaturization and regrow the terminal hair follicle. And so we're really excited to be driving this program forward. And a quick update on the clinical study.

So we have completed the single ascending dose. Within a very, very short amount of time, we will be releasing the SAD safety, tolerability and PK data. So please be on the lookout for that. We're very excited to be announcing that and sharing that data with you. And then additionally, the MAD portion of the study has started, and this is with healthy individuals that do have AGA. And then we'll have a 13-week interim readout on that later this year with the 26 efficacy readout first part of '27. And again, everything is progressing as planned and very excited for these upcoming readouts. And again, here in June in just a very short amount of time, we're going to have that SAD data out.

So we took the TPP that -- we got feedback from dermatologists and being able to achieve roughly what oral minoxidil is able to achieve. And we see this being a very large market opportunity. And we took this into a consumer quant study. So assuming that you could have roughly oral minoxidil levels along with durability of 2 to 3 years. We estimate the market opportunity for this within the U.S. alone is $25 billion. And globally, it's a $40 billion market. And we see this playing really nicely into this total vitality market that we're seeing evolve where patients not only want weight. They want their hair. They want to feel better. They want to look better. And we think that this fits really nicely into that and excited again for the upcoming data later this year.

So now moving on to endometriosis, same drug, same target, different indication and very similar to AGA. This is a large market opportunity. The standard of care is really poor and the need for therapy here is extremely high. One in 10 women have endometriosis. It's a very debilitating disease. And prolactin and being able to shut that pathway off has the opportunity to actually be potentially disease-modifying where you're able to reduce overall lesion pain as well as decrease the lesion size as well.

So as I mentioned, prolactin does seem to be driving the lesion formation as well as the pain sensitization. And here's some preclinical data. Data on the left-hand side shows how prolactin does drive lesion formation. And we have data on the right-hand side, looking at overall pain. And you do see that by blocking the prolactin receptor in mice, you do reduce -- you do see an overall reduction in overall pain seen by how far these mice can walk.

We've also done some recent studies showing how prolactin drives pain sensitization as well. And so you have the opportunity to reduce, again, the pain as well as the lesion formation. Again, given the fact that standard of care here is extremely poor, there is no disease-modifying therapy out there. One in 10 women do experience endometriosis and have it. We do see this being a large market opportunity of over $4.5 billion.

All in with this, we have 2 very exciting Phase II readouts coming up within the next 24 months. We have AGA second half of this year, 13 week and then followed up with the 26-week and early '27. We have the endometriosis study starting, and we'll have a Phase II readout on that next year. And as I mentioned, tune in, very soon, we're going to have the SAD safety, tolerability and PK data out on ABS-201.

And I'd like to thank you all for tuning in.

A.J. Welcome to the Jefferies New York Global Healthcare Conference. It's my pleasure to introduce Sean and Zach from Absci Corporation with you here today.

Great. Thank you. I'm Sean McClain, Founder and CEO at Absci. Absci is an AI drug creation company. We've built AI native platform at Absci, where we're able to accelerate the time it takes to get new drugs to the clinic and overall, reducing the time lines, and we'll talk more about that on later slides and really creating an exciting differentiated pipeline that's focused on prolactin receptor biology, 2 programs, one focused on hair regrowth, androgenetic alopecia and the other focused on endometriosis.

We see drug discovery as being -- or AI drug discovery as being able to really industrialize drug discovery, being able to have a wet lab in the loop to rapidly design the molecules. And now we're actually shifting with Agentic AI, being able to start to use these models to reason through data, being able to help us select the right targets and then fully integrate into our design platforms to design the drug.

And what we've been able to show to date is we've been able to dramatically reduce overall costs and time lines. So traditionally, it takes $50 million to $100 million just to get one drug into the clinic. We've been able to show with ABS-101 and 201 that we were able to get these drugs into the clinic with an investment of roughly $10 million to $15 million. Additionally, it takes 5 to 6 years, again, just to get one drug into the clinic.

We've been able to show that we can get new drugs into the clinic in roughly 24 months, and these time lines are continuing to come down and get cheaper. And we see this as being able to fail faster and be able to get the right drugs into the clinic that are ultimately going to impact patients. As I mentioned, we have two drugs that have come out of our pipeline, ABS-201 for androgenetic alopecia, which is in a Phase I/IIa study right now as well as endometriosis, which will be starting a Phase II at the end of this year.

We're wanting to use AI to create differentiated assets, being able to go after modalities and targets that have been traditionally hard to drug, such as ion channels, GPCRs, where we have known biology, but it's been difficult to drug. We've been able to show success with this platform, not only on our own pipeline, but also with partners, in particular, Almirall, we were able to show that we could actually drug an ion channel that had been known for 30 years, but no one had been able to successfully drug it.

We recently released an exciting state-of-the-art model, Origin-1. This is a design -- an antibody design model where we were able, for the first time, able to show that you could go after what's called 0 prior epitopes. So targets that have no known binders or structural known binders to that epitope. And the significance of this is being able to go after hard-to-drug targets where traditional approaches have failed.

And if you start to look at it in terms of integrating into an Agentic AI workflow that discovers novel antigens and targets, it can then feed directly into this Origin-1 platform to design the molecule and then design the killer experiment to validate that and rapidly be discovering new novel biology really faster than we've seen to date. And we see this as a very, very scalable approach.

We see the AI platform, not just as a technology, but really putting the value in the assets and making sure that we are investing in the right targets and ultimately taking those into the clinic because that's where the value is at. It's not necessarily on the platform.

It's what the platform can ultimately achieve, and that's with these particular assets. And we're really excited to be focusing on prolactin biology. And we have, again, as I've mentioned, two assets, ABS-101 that's going after 2 indications, androgenetic alopecia, so I think hair regrowth as well as endometriosis. So ABS-201, this is a really exciting asset for us. This is targeting the prolactin receptor for androgenetic alopecia.

This really hits on a new trend that you're starting to see this total vitality market. We saw that the GLP-1s were able to provide weight loss and a lot of other benefits -- and what we're seeing is that patients and the consumer are not just wanting weight loss. They're wanting their hair to be regrown. They want their wrinkles removed. This total vitality market. And we see just an absolutely massive market here, 80 million men and women in the United States suffer from androgenetic alopecia.

Additionally, there is a massive psychological burden that's associated with losing your hair. It's not just men but women also, especially perimenopausal women that are losing their hair. They have 0 solutions out there. They can't take finasteride and Minoxidil gives them hair in unwanted areas. And so there is a wide open space here, a massive market, and we see this being on par with the size of the GLP-1 market.

So how is prolactin and prolactin receptor involved in hair regrowth. What we've found is over time, you build up prolactin or you have prolactinemia on the scalp. And that is driving the follicle into a miniaturization state, essentially taking it from this active growth state, this antigen state and driving it into the catagen state. And we'll talk more about the mechanism in detail.

But essentially, what goes on is you start to lose the stem cells within the hair follicle -- and over time, that leads to the miniaturization and ultimately, the hair loss that you see. And by blocking the prolactin receptor, you're able to have the follicle go back into the antigen state and convert those vellus hairs into robust terminal hair growth. And this is a novel mechanism. For the past 30 years, everyone has been going after the same targets.

This is a brand-new target to hit the androgenetic alopecia space. Now when you compare this to standard of care, oral minoxidil in mice, we were able to show that ABS-201 was able to provide superior hair regrowth compared to 5% oral minoxidil. You can see that the mice, these are shaved mice and you have the control arm, 5% monoxidil and ABS-201.

And you can see the dramatic hair regrowth that these mice experience when compared to oral monoxidil. And what got us really excited in the first place about this particular mechanism were these Stumptailed Macaque. Our Chief Innovation Officer, Andreas Busch, prior to his time at Absci was at Bayer, and they were studying the prolactin receptor for endometriosis.

And what they ended up finding was when you shave the mice, the mice that were on drug regrew their hair faster. And so they commissioned the Stumptailed Macaque study. And what you see here are bald Stumptailed Macaque. These are Stumptailed Macaque that naturally go bald. So there's -- they are not -- there is no chemical induction or any modification that go on, which really make this the perfect androgenetic alopecia model.

And they were on drug for 28 weeks, an anti-prolactin receptor antibody. And after 6 months of treatment, it was pretty remarkable what ended up happening. They go from their bald gray hair to a full head of hair, jet black. And what's even more remarkable is post treatment, they continue to regrow their hair.

There was a regenerative effect that was going on for up to four years. And we believe that the regenerative effect is the ability to rebuild the Stumptailed niche. We know that miniaturization happens slowly over time. So you can almost think of it as we're rebuilding the wall, we're rebuilding the machinery, and that gives that durable effect, that regenerative effect that we have yet to see in this space. So we saw efficacy in mice. We saw it in the Stumptailed Macaque.

The next model we wanted to run was an ex vivo sample from punch biopsies from humans. And we worked with Professor Ralf Paus, a leading hair expert in this space and performed a 72-hour ex vivo model where we compared hair growth and looked at the mechanism when comparing ABS-201 while adding prolactin. And what we saw was really consistent with the Stumptailed Macaque’. And so what you see here is a microscopic hair imaging of the various different cycles. So as I mentioned, antigen is the active growth state. Catagen is where you start to see the miniaturization occur.

And what you see in a very short amount of time is that ABS-201 alone was able to drive the follicle into the antigen state. And when you add prolactin, you can see that it drives the follicle into the catagen state. And when you have prolactin as well as ABS-201, you're able to rescue the follicle. So again, seeing that same mechanism play out in humans or at least human biopsies. I'd mentioned that our belief is that ABS-201 is able to rescue the stem cell niche.

And once you rescue that stem cell niche, you're able to drive the rest of the machinery that is necessary to drive the follicle into a sustained antigen state. And that's exactly what we see is that ABS-201 is able to promote K15 stem cell growth while prolactin drives the apoptosis of K15 stem cells. And so we're able to preserve and prevent their exhaustion that's seen. And what's really quite interesting as well is that these stem cells are anchored by collagen XVIIa.

And it looks like in studies that we followed up on that prolactin on its own is able to drive the increase of collagen XVIIa, which is ensuring that these stem cells stayed anchored to the niche and the bulge, again, allowing them to continue to proliferate and get that sustained durable hair regrowth.

Some other pieces that we were excited about from the study was not only the stem cells that we are able to preserve, but additionally, the other growth factors that are important for hair regrowth. That's FGF7, IGF1. IGF1 were all upregulated, again, important for driving the follicle into the antigen state.

And additionally, we did see a decrease of TGF-ß, which is a known catagen driver. So earlier this year, we started a Phase I/IIa study. We started off with a single ascending dose in non-AGA patients. These were four doses, 150 milligrams all the way up to 1,800 milligrams. So far, everything is looking good with that.

We do see favorable safety and PK profile. In June or later this month, we will be disclosing the initial safety and PK data that's coming out of the single ascending dose. And we additionally have started the MAD portion, which is in healthy volunteers that have AGA. And this is a subcu dosing, and we have three different doses here, 300 milligram, 600 milligram and 1,200 milligram, and this is going to be dosed every 8 weeks.

And we'll have a 13-week interim readout and a 26-week interim readout or the final readout at 26 weeks. The 13-week readout will be the second half of this year. This will -- the primary endpoint on that is safety and tolerability. The secondary endpoint is the efficacy. So looking at total area hair count, thickness and darkening. And for this, we just want to see hair regrowth showing that the mechanism is working.

It's a directional readout. It will be a responder analysis. So it will stay blinded looking at the growth of the responders. Again, second half of this year, that data will be available. And then the study will complete early next year, and this will be the '26 readout unblinded, looking at safety, tolerability, total area hair count, darkness and hair width. As I mentioned, we see this as a large, massive market.

The standard of care hasn't changed in the last 20 to 30 years. It's still minoxidil and finasteride. And additionally, you do have hair transplants. And what we've seen from physicians and patients when we've interviewed them is that they are not happy with the current standard of care in terms of efficacy, hair regrowth and just being able to take a daily pill.

And we believe that if we are able to achieve efficacy that is around oral minoxidil, call it, 30 to 50 hairs per square centimeter, and we're able to have a durable hair regrowth. So I think 2 to 3 doses over a 6-month period and you have hair regrowth for the next 1 to 2 years. We believe that is a home run product from the consumer quant studies that we've done.

And if we're able to achieve greater than that, we do see the TAM growing much larger. So we did do a consumer quant study looking at those that would be interested in the TPP that I had just laid out. And -- as I mentioned, there is a large patient population, 80 million men and women suffer from androgenetic alopecia.

And if you kind of work your way down the funnel here, we do see an overall TAM within the U.S. of $25 billion and globally being $40 billion. And this market is just getting started. Again, standard of care hasn't changed. This is a brand-new novel mechanism and a massive opportunity that we're looking to tap into. The second indication that we're going into with ABS-201 is another underserved patient population, and that is endometriosis in women. 1 in 10 women suffer from endometriosis.

This is a debilitating disease. It's extremely painful for women during administration. It's an inflammatory-based disease. And current standard of care is not great. And far too long, there hasn't been a lot of investment here. The diagnostic tests aren't great, which we believe is actually underestimating the overall patient population and really excited to be pursuing this particular indication just due to standard of care being so low and just a massive unmet medical need here.

So how is prolactin involved in endometriosis? What we're seeing is very similar to what we see in the scalp that you get high levels of prolactin in the endometrial tissue. And what that does is it drives inflammation within the endometrial tissue and drives lesion formation as well as drives pain sensitization.

And what we've seen from both publicly available data as well as some data we've generated preclinically is that it does look like indeed, at least in mouse studies that prolactin is driving the lesion formation that women get on the endometrial tissue.

And additionally, prolactin is driving the pain sensitization that women experience during dysmenorrhea. So as I mentioned, this is a very large patient population, 1 in 10 women have endometriosis is a very debilitating disease, and we see the market opportunity for this being over $4.5 billion and excited to be pursuing this in an area that has been very much overlooked and underappreciated, and we do believe that we could be bringing forward a treatment that is truly disease-modifying.

And so over the next 24 months, we have exciting readouts that are occurring first off, June of this year, this month, we'll be having the safety PK readout on the Phase I/IIa study for the SAD portion, looking at initial safety, tolerability and PK data.

Later this year, in the second half, we'll have the 13-week interim readout on AGA. And then we will be starting the endometriosis study at the end of this year, Phase II study. And in the beginning of next year, we will be having the full 26-week readout on AGA. So it's a very exciting 24 months for us with multiple readouts and yes, 2 Phase II readouts...

We'll open it up for questions. Thank you.

All right. Well. Thank you.

Ladies and gentlemen, thank you for standing by. My name is Duncan, and I will be your conference operator for today. I would like to welcome you to Absci First Quarter 2026 Business Update. [Operator Instructions]

Now I'd like to turn over the conference over to Alex Khan. Please go ahead.

Thank you. Earlier today, Absci released financial and operating results for the quarter ended March 31, 2026. If you haven't received this news release or if you'd like to be added to the company's distribution list, please send an e-mail to [email protected]. An archived webcast of this call will be available for replay on Absci's Investor Relations website at investors.absci.com for at least 90 days after this call.

Joining me today are Sean McClain, Absci's Founder and CEO; Zach Jonasson, Chief Financial Officer and Chief Business Officer; and Ransi Somaratne, Chief Medical Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the Federal Securities laws.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements.

These include statements regarding the development and clinical progress of our pipeline programs, including ABS-201, the design, enrollment, conduct and time lines of our ongoing Phase I/IIa HEADLINE trial of ABS-201 for androgenic alopecia, the anticipated timing of an interim proof-of-concept data readout for ABS-201 in the second half of 2026, the potential advancement of ABS-201 into Phase III development, anticipated initiation of the Phase II clinical trial of ABS-201 for endometriosis in the fourth quarter of 2026 and a potential proof-of-concept readout in the second half of 2027, the anticipated characteristics and product profile of ABS-201 as a drug product, our target product profile and its attributes, the potential for an expedited development pathway, including the possibility of advancing directly from Phase I/IIa into Phase III, our planned engagement with the FDA regarding development strategy and the potential market opportunity and commercial prospects for ABS-201.

Certain statements may also include projections regarding potential market opportunity. These estimates are based on various assumptions, including potential regulatory approval, the final approved label and the evolving competitive landscape, any of which could cause our actual addressable market to differ materially from these projections. In addition, certain research findings discussed today reflect participant responses to a hypothetical product profile and do not represent clinical results for ABS-201.

Additional information regarding the risks and uncertainties that could affect our forward-looking statements is set forth in the press release Absci issued today, our most recent Annual Report on Form 10-K and subsequent documents and reports filed by Absci from time-to-time with the SEC.

Except as required by law, Absci disclaims any intent or obligation to update or revise any financial or product pipeline projections or other forward-looking statements either because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, May 7, 2026.

With that, I'll turn the call over to Sean.

Thanks, Alex. Good afternoon, everyone. Thanks for joining us. Today, I'll cover 3 things: where we are on ABS-201, a new addition to our prolactin pipeline and the strategy driving both. 2026 is going to be a data-rich year for Absci with multiple readouts in front of us. Ransi will go through the HEADLINE trial and discuss early PK modeling that supports our targeted dosing frequency. At a high level, the Phase I/IIa is on track.

We expect to share preliminary safety, tolerability and PK data next month, interim 13-week hair regrowth data in the second half of this year and full 26-week proof-of-concept data early next year. ABS-201 is not intended to compete with minoxidil. We are aiming to create a new category of hair regrowth therapy, a targeted biologic against the prolactin receptor that provides durable hair regrowth from a few injections.

If successful, ABS-201 could represent the first new mechanism of action in androgenic alopecia in nearly 3 decades and a fundamentally different treatment paradigm for patients. In parallel, we continue to advance towards initiation of a Phase II endometriosis trial in the fourth quarter. We recently launched our Endometriosis Clinical Advisory Board with leaders from Yale, UCSF, Duke and Mayo Clinic.

They bring deep expertise across reproductive medicine, fertility and translational research and will help guide the ABS-201 endometriosis program. Endometriosis has the same kind of opportunity as AGA, large, underserved and underexplored. And ABS-201 has the potential to open up a new category of therapy there as well. As Zach will discuss, our top strategic priority is using our platform to create novel differentiated assets.

ABS-201 in AGA and endometriosis is the clearest expression of that. We go after hard problems, novel biology and large patient populations where the unmet need is real. Our platform is built for this, and our philosophy has always been simple, follow the science and follow the data. And one of the places this has taken us is prolactin biology. Prolactin biology is underexplored, underappreciated and often misunderstood.

Even inside the medical community, the main prolactin can read as narrow and some still think of it as a lactation hormone. It is much more than that. The more mechanistic insight we have generated on prolactin, the prolactin receptor and the related pathways, the more opportunity we see for this target, well beyond AGA and endometriosis.

We have started sharing some of these insights with the medical community as a part of a broader education effort. Today, we're announcing another anti-prolactin receptor antibody, ABS-202 for an undisclosed I&I indication. ABS-201 in AGA, ABS-201 in endometriosis and now ABS-202 in I&I are just the start of our prolactin pipeline. The reason we can do this comes back to our people and our platform, Origin-1.

We figured out early that having a good platform is not good enough on its own. We need the people who know how to push it. And in this industry, you also need the assets, novel and differentiated programs that can make a real difference in patients' lives. The places where unmet need is largest tend to be where biology is most complex and underexplored.

And that is exactly where our platform and our people excel. That overlap is also where the potential return on investment is highest, both for patients as well as our shareholders. Our focus remains being an AI-native company dedicated to developing and delivering novel differentiated therapeutic assets for patients.

And as we roll out our Agentic AI workflows across Absci, each of our Unlimiters is scaling themselves across research, SG&A and other functions, we are unlocking real efficiencies and new capabilities. That is the focus, and that is what we are committed to delivering.

With that, I'll turn it over to Ransi, who will walk through the ABS-201 clinical program. Ransi?

Thanks, Sean, and good afternoon, everyone. As Sean mentioned, we are pleased to share that our ongoing Phase I/IIa HEADLINE trial for ABS-201 is progressing well and tracking according to plan. As a reminder, this trial is a randomized, double-blind, placebo-controlled study.

The primary endpoints are safety and tolerability, while secondary endpoints include PK, PD, immunogenicity, target area hair count, target area hair width and target area darkening or pigmentation. We will also collect patient-reported outcome data from this study. In the HEADLINE trial, we have now finished dosing all 4 planned healthy volunteer single ascending dose cohorts and initiated dosing in the first multiple ascending dose cohort.

To-date, emerging safety and tolerability data remain favorable. Additionally, preliminary PK modeling from this clinical trial supports ABS-201's targeted dosing interval of 2 or 3 injections over a 6-month period. Next month, we anticipate sharing blinded preliminary safety, tolerability and PK data from the SAD cohorts.

In that update, we plan to share clinical data that support the safety profile and anticipated ABS-201 dosing interval. In the second half of this year, we plan to disclose interim proof-of-concept data followed by full proof-of-concept data in early 2027. The interim POC readout will include 13-week hair growth data.

The 13-week interim is, by design, a directional view. The 26-week time point is the trial's full POC readout. Given the regenerative nature of the mechanism and our targeted dosing interval, biology may continue to drive hair growth beyond that point, which is consistent with the long-acting profile we are working towards.

Zach will speak to how this positions ABS-201 well for commercial success. We also continue to explore plans to execute our targeted efficient clinical development strategy, which could enable expedited clinical development with the potential of advancing directly to registrational trials following this Phase I/IIa study.

With that, I'll pass it over to Zach to discuss our business strategy and to provide an update on our financials. Zach?

Thanks, Ransi. We remain focused on creating and developing therapeutic programs that offer the highest potential return on investment. Our strategic priority is the execution of the ABS-201 HEADLINE trial, which supports our future registrational study plans for AGA and our Phase II clinical trial plan for endometriosis.

As Ransi mentioned, we plan to share an interim POC readout, including 13-week hair regrowth data in the second half of this year. Based on the mechanism and our preclinical data, we anticipate the 13-week interim readout will give a directional view of hair growth with the 26-week full POC providing the trial's primary efficacy readout.

Given the regenerative nature of the mechanism, we anticipate hair growth to continue beyond the 26-week time point. Conversations with the scientific and medical community as well as patients continue to affirm our view of the significant return on investment potential for ABS-201 in AGA and endometriosis.

We estimate that the capital required to advance ABS-201 to registrational AGA trials will be a fraction of the clinical costs required for other large indications such as oncology and IBD. Moreover, we expect to be able to leverage the SAD and MAD portions of the current HEADLINE trial to support Phase II initiation in endometriosis, thereby saving time and cost. Considering the significant potential market opportunities of AGA and endometriosis in conjunction with our efficient development strategy, we believe that ABS-201 offers a unique and compelling ROI.

Our market research supports a significant commercial opportunity for ABS-201. In our surveys of AGA consumers and dermatologists, we evaluated a target product profile consisting of 2.5 years of hair growth following 3 injections of ABS-201 with a hair growth effect of approximately 35 hairs per centimeter squared versus baseline, similar to high-dose oral minoxidil.

Results from our market research support a potential total available market exceeding $25 billion annually in the U.S. with meaningful potential upside if hair growth exceeds the survey threshold. ABS-201 has the potential to significantly expand the overall AGA market as a new premium category of durable regenerative hair growth therapy.

Our market research indicates the ABS-201 target product profile would attract not only AGA consumers dissatisfied with current standard of care, but also those who elect to use ABS-201 alongside existing standard of care, such as oral minoxidil or new formulations of oral minoxidil.

Similarly, in endometriosis, ABS-201 has the potential to define a new category of therapy that has the potential to address not only pain but also underlying disease. Endometriosis is prevalent in up to 10% of women worldwide, including an estimated 9 million women in the U.S. We believe ABS-201's differentiated profile could support potential peak sales in excess of $4 billion.

As Sean mentioned earlier, our second priority is building and prioritizing an early pipeline of differentiated programs that offer the highest potential return on investment. Accordingly, today, we are pleased to announce the deepening of our pipeline with the addition of a new anti-prolactin receptor antibody, ABS-202.

This program, which leverages our prolactin biology expertise and our AI platform enables us to expand into new indications where we believe prolactin receptor inhibition will offer a novel and efficacious treatment option. Conversely, we have determined that oncology no longer fits within our strategic scope, and so we will be deprioritizing development of ABS-301 and ABS-501.

We will no longer commit internal capital or resources to further development of these programs. Our capital and resources will be directed toward programs that offer the greatest potential ROI within our strategy. In addition to the 2 previously discussed strategic priorities, we continue to advance partnering discussions associated with our other internal programs, which are at various stages of preclinical and clinical development.

Overall, our strategy remains focused on executing the development of ABS-201 in AGA and in endometriosis and on further building a pipeline of differentiated programs that provide optionality for internal development or partnering. Turning now to our financials. Revenue in the first quarter was $200,000 as we continue to progress our partnered programs.

Research and development expenses were $19.3 million for the 3 months ending March 31, 2026, as compared to $16.4 million for the prior year period. This increase was primarily driven by advancement of Absci's internal programs, including direct costs associated with external preclinical and clinical development of ABS-201.

Selling, general and administrative expenses were $9.1 million for the 3 months ending March 31, 2026, as compared to $9.5 million for the prior year period. This decrease was primarily due to a reduction in personnel-related costs. Cash, cash equivalents and marketable securities as of March 31, 2026, were $125.7 million as compared to $144.3 million as of December 31, 2025.

Based on our current projections, we believe our cash, cash equivalents and marketable securities will be sufficient to fund our operating plans into the first half of 2028. Our current balance sheet supports our execution of key upcoming catalysts, including potential proof-of-concept readouts for both AGA and endometriosis and continued progress of our early-stage pipeline.

We also remain focused on opportunities to generate additional non-dilutive cash inflows that could come from early-stage asset transactions and/or new platform collaborations with large pharma. In particular, we believe our early pipeline programs may offer attractive partnering opportunities.

At the same time, we are aggressively implementing agentic AI workflows across our organization, including in business and scientific functions. These implementations are already creating meaningful efficiency gains as well as capability gains. Going forward, we expect to continue to realize cost savings and productivity gains from advancement of our agentic workflows.

With that, I'll now turn it back to Sean.

Thanks, Zach. Before we open up for questions, I want to thank the team at Absci Unlimiters for the work they put in each and every day. The catalysts ahead this year are: one, preliminary safety and PK data for ABS-201 next month; two, interim 13-week proof-of-concept hair regrowth data in the second half of this year; three, initiation of Phase II endometriosis trial in Q4, subject to data and regulatory review; and last, continued progress on our early-stage pipeline, including our newest Prolactin program, ABS-202. Looking into early 2027, we expect full 26-week proof-of-concept data for ABS-201 in AGA.

Thank you all for your continued support. Operator, let's open the line for questions.

[Operator Instructions] Your first question comes from the line of Brendan Smith from TD Cowen.

Can you hear me now? Sorry about that. Congrats on everything going on here. I guess maybe just kind of a quick follow-up on the 202 conversation. Can you maybe just help us understand a little bit more even on a mechanistic level here, what kind of the most important distinctions versus 201 are in terms of why it would make sense for some indications versus others? And I guess, versus the first you're pursuing there? And is there kind of a difference of product profile or something about actual mechanism that makes sense for that distinction?

Yes, absolutely. With ABS-202, we are creating a differentiated profile with this. And additionally, we do want to be able to have this outside of AGA and endometriosis for other indications where there may be pricing differences. And with regards to the prolactin biology, some of the things that we're really interested in is how prolactin is driving some of these autoimmune diseases.

It looks to be sitting on this stress inflammatory axis and is also driving some interesting B-cell biology as well. And you just see it expressed at least the prolactin receptor all throughout the body. I mean, it's in bones, immune system, endothelial cells, the synovium. And so we're continuing to expand out the biology there as well as going into other indications with ABS-202. And then additionally, looking at bispecifics as well that could be synergistic with this particular mechanism.

Got it. Okay. That's super helpful. And then maybe just quickly on the upcoming MAD efficacy readout with 201. I appreciate the color on some of the -- how you're thinking about some of this data. I guess just given how the space has evolved in recent months there, are you kind of ultimately thinking comparable efficacy but with clean safety and maybe differentiated dosing is kind of enough to win given how big the market is or are you expecting kind of based on how things have evolved now that you would potentially need to show superior efficacy? Just help us understand some of those dynamics.

Yes, absolutely. And Zach can touch on this more from the consumer quant study we did, but -- we believe having a comparable efficacy to oral minoxidil with the infrequent dosing will be really a home run product and that convenience factor with equivalent efficacy, we do see that being a home-run product and any efficacy above that, we see that as just increasing the overall TAM of the opportunity here. And Zach, maybe you want to speak a little bit more to the consumer quant study that we did.

Yes, I'd be happy to comment. So Brendan, as you know, we've conducted a sizable consumer survey. We've also conducted surveys with dermatologists. And I think the takeaway from those surveys is that the profile of ABS-201 would really establish a brand-new category of therapy, and that's based on its durable -- the durability of the profile, infrequent dosing and the truly regenerative mechanism.

So when we test a profile with consumers, dermatologists that has efficacy that's consistent with at least some reports of high-dose oral minoxidil, so think about that sort of 35 hairs per square centimeter growth in target area hair count, we see the massive potential for adoption, and that's how we get to a potential $25 billion TAM just on a TPP that looks like that because it's a compilation of all of those factors that really define this as a new category.

So I think we're quite excited about that. And we think, ultimately, this product would expand the overall AGA market. And we saw that in our consumer research as well. It looks to us like there are a lot of patients out there who are dissatisfied with current standard of care who would come to ABS-201 as a therapeutic option. There are also lots of patients that would just come first line.

So before they try anything else. We saw over 1/3 of males and females we surveyed said they would come first line, and that's before trying even like a nutraceutical or something very inexpensive. And then we also saw in the data that there are lots of patients that would elect to use both. So they might use an oral minoxidil in combination with ABS-201. So I think as a brand-new category of therapy and a premium category, I think ABS-201 has the potential to be really well-positioned.

Your next questions come from the line of Gil Blum from Needham & Company.

A little bit of a similar question as it relates to the ABS-201 and ABS-202. Is the difference there pharmacokinetics binding? Is there anything you can tell us about the upgrade in ABS-202? And I have a follow-up on the ABS-201 program after this.

Yes. At this point in time, we are not disclosing the profile that we're looking to achieve for this other than the fact that we are planning to take this into a different indication.

Fair enough. As it relates to the 13-week readout, [ Verdomex ] in their own call noted appreciable improvement at 2 months. It's a very qualitative measure as it relates to early data on early time points. Is this what we should be expecting at 13 weeks or should we be expecting something more methodical?

Yes. The 13 weeks is really a directional readout. We want to see hair growth and the 26-week is where we expect to see the oral minoxidil hairs per square centimeter. And so that's what we're utilizing as the final readout and the 13 week, again, is just directional from there. And just given the differences in hair growth and the mechanism, we want to reserve the 26-week as the final definitive readout.

Your next question comes from the line of Vamil Divan from Guggenheim.

This is Arseniy on for Vamil. Congrats on all the progress. You previously talked about 90% receptor occupancy being necessary to achieve the full therapeutic effect with the prolactin mechanism. Has anything you've seen in the trial so far shifted that perspective in any way? And do you think it's optimally achievable with that dosing schedule that you envision?

Yes. So far, what we're seeing, we definitely see that as achievable. And Ransi, maybe you want to speak a little bit more to that?

Yes. We're not looking at anything like hair growth in the SAD study. And -- but the way we've designed the dosing paradigm, we've been very conservative in our scaling. And so we're confident we can hit that 90% receptor occupancy. This is certainly something that is something to look forward to with the MAD data and then the hair growth data.

And one more follow-up. Do you expect variability in therapeutic response among the patients that you enrolled, whether that's because of their biomarker profile, because of their age or there is something about this mechanism where you think essentially every patient will respond at least to some degree.

I mean at this point, we're -- we seem to have a balanced enrollment of the various stages of the Norwood classification. There's nothing that from a biomarker perspective that I would expect to see or be able to predict a variation in response in the AGA population. So I don't have a great answer to that question, but it's a reasonably sized study and it's randomized.

So in terms of the baseline hair characteristics, we're pleased with how patients are distributing amongst the arms. But at this point, I don't -- I'm not worried about something else causing inter-subject variability in the mechanism of action itself.

And [indiscernible] any of that as well in the in vivo or ex vivo experiments that we've run to-date.

Your next question comes from the line of Kripa Devarakonda from Truist.

This is Alex on for Kripa. Really exciting time at Absci. Two questions from us. One, when can we expect to learn more about the mechanism and the properties and indication for ABS-202? And then also in your consumer survey, did you specifically test for patient preference and desire for combination therapy for ABS-201 and other currently approved products?

Yes. At the current moment, we are not planning on disclosing any more than we have on ABS-202 and the mechanism of action, though I will say we are very excited about the overall opportunities. And as we get closer to the clinic, we will definitely be disclosing more on that. But just from a competitive standpoint, we're not disclosing at this point in time. And Zach, do you want to take the second question?

Yes, absolutely. So in the survey itself, we did not specifically ask that question, but we have asked that question in our patient interview segments. In the survey, what we did see, which I think was really -- really exciting for us is when we talk to surveyed men and women, we saw a very high response rate in terms of those who said they would go -- be extremely likely or very likely to go seek out the product today if it were available.

That was 87% of men, 69% of women. But then when we zeroed in on subgroups who are on existing standard of care, for example, oral minoxidil, those numbers went up dramatically. So for men, they went from 87% to 92%. And for women, they went from 69% to 89%.

So we clearly see a strong level or a stronger level of interest in the product if you're already using a standard of care in those subgroups. So we think that the survey really supports the new category definition here where patients are really going to be looking for this as a new category either to replace standard of care that they're dissatisfied with or to use on top of standard of care.

Your next question comes from the line of Deb Chatterjee from Jones.

So I have a question on the endometriosis program. I know pain is a very common endpoint for this trial. But historically, the high placebo response has been an issue with pain studies. So what kind of structural elements would you implement in this trial to prevent like a control placebo response? And I have a follow-up.

Yes. Ransi, you want to take that?

Yes. Thanks for the question. I learned a lot in my time at Vertex overseeing the pain program there. And I'm glad you appreciate that. The pain aspect of these studies is ultra important. The crux, I think, is how you execute the trial. So we will spend a lot of time making sure the sites are carefully chosen. The investigators are carefully chosen. All of the partners that we're working with understand how to mitigate placebo response. Placebo training is really important.

We will be surveilling the blinded data for evidence of placebo response. And so there's a lot of operational stuff that's not put into the protocol because these are really things that you have to do in execution. And we've also engaged the FDA in how we're approaching mitigation of placebo response. So it's really, really important. Not something that you always see in the protocols, but heavily operational and done behind the scenes.

Okay. That's helpful. And so for 202, I know for competitive reasons, you can't share much details. But just wanted to know if that is something for internal development or is that something you would partner off given that the pricing will be very different for I&I indications?

Yes. We are definitely open to both options on ABS-201. The current option at the moment is pursuing this ourselves. But given the opportunity here and market size, we are considering both internal development as well as partnering. And that is for ABS-202, sorry.

Your next question comes from the line of Brian Cheng from JPMorgan.

Hi guys. Can you hear me? So when you talk about the 20 hair growth as the benchmark for success, I think that's what you have been guiding for, for some time now for your AGA MAD portion.

Can you clarify whether that's the benchmark that you expect for the end of the MAD portion, meaning that at the end of 26 week? And if it is, just curious if you can also help us think about what you would want to see or what you expect to see at the 13-week mark based on the preclinical work that you have done?

Yes, it's a great question, Brian. And where we want to be at the 26 weeks is definitely where oral minoxidil sits. And at the 13 week, we are not putting an official guide on that. We want to see directional hair growth -- and just given the biology and the new mechanism here, we don't want to set any sort of unrealistic expectations. And I think the best way to look at this is through the lens of the 26-week readout, which again is where we want to be right around oral minoxidil with infrequent dosing.

Brian, if I could add to that, like what we showed in the survey is if we have the TPP that includes that sort of effect size that's similar to oral minoxidil, the high-dose oral minoxidil, so think in the 30s with that convenient profile and durability, that's really a home run product. There's a product that efficacy below that as well. But the consumer research we've done with KOLs and with AGA consumers would suggest that that is a very fantastic product category defining at that threshold.

Got it. And maybe just going back to the PK data that you have seen so far. And I think you said in your prepared remarks that the modeling work that you have seen from the trial, it truly supports a few times a year type of dosing regimen. So can you give us a little bit more color, a little bit of a glance of how we should think about the key parameters that are driving the conclusions?

Yes Ransi, do you want to speak on the PK?

Yes. I mean we're assessing PK from all of the SAD cohorts. We just started dosing the MAD cohort. So we don't have MAD PK, but the SAD cohorts are developing nicely. We're pretty -- we feel pretty good about being able to dose at least every 8 weeks subcutaneously. We'll have more color on this and a more refined estimation of dosing frequency when we have the data that we talked about in a few weeks.

Yes. I would say from the preliminary half-life and PK, we're feeling very optimistic and looking forward to sharing the full data on that in June.

Your next question comes from the line of Swayampakula Ramakanth from H.C. Wainwright.

I apologize that I'm going to disappoint you by not asking a question on 201 or 202. However, I have a couple of other questions. One is you stated that you're deemphasizing oncology products. So I'm just trying to understand what's the -- some of the reasonings behind it? And also what sort of an interest are you seeing from outside, especially for these novel drugs?

Yes. From a strategy standpoint, if you look at ABS-201 and in particular, going after AGA, I mean this is going to be a direct-to-consumer type of product, and we really want to be building out products that would support this and in particular, in I&I makes a lot of sense.

And oncology just doesn't support that particular go-to-market strategy that we want to have with AGA. And so we have deprioritized these and no longer going to fund any of these internally and again, put all the focus into assets that are going to be supporting the lead asset, ABS-201 in AGA and endometriosis.

Okay. And then in terms of bringing in partners, right, because you've been talking about generating partnerships, including a large-cap pharma for a while now. And that cadence has been slower than what we have seen in the previous years.

So I'm just trying to understand some of the factors that are going into it. Is it more because some of these large cap pharma or large-cap biotech, they are generating their own tools that they feel sufficient enough or is it because the economics that they bring to the table doesn't seem viable for you to enter into a relationship?

Yes. So our focus is driving the clinical development of ABS-201. We are continuing to look for pharma partnerships around our pipeline, but they have to make sense for us. We're a limited team here, and we wanted to synergize.

And so we are being very selective of who we partner with and how they synergize in building out the overall portfolio that we want to build out and supports the go-to-market strategy as well with ABS-201. So it is definitely an area that we are focused in on, but it has to make sense strategically for us. Zach, if you have anything else to add to that?

Yes. I mean Sean is exactly right. And [ RK ], I'll just add one thing, and that's internally, we have the capability to generate assets, and we believe we have a leading platform that's very focused on challenging targets as well as the leadership in certain areas of biology, foremost, prolactin biology.

We believe and we've done a full-blown analysis internally that we can generate better economic terms on partnerships that are focused on an asset even at a preclinical stage versus tying up our resources and capacity for target-based platform partnerships. And so we've got a number of assets that are coming towards DC this year and several of those we think would be earmarked towards partnering to generate nondilutive cash flow.

And when we run the analysis internally, the risk-adjusted NPV from focusing on trading assets and partnering those is a multiple of what it would be relative to a platform target-based deal when you look at it on a target-by-target or program-by-program basis. So for us, the economics also point us in that direction.

Your next question comes from the line of Steve Dechert from KeyBanc Capital Markets.

You mentioned adopting more agentic AI into your business. I guess just how is this impacting your drug discovery process as well as your business operations? And any kind of cost savings near-term that you can point to?

Zach, do you want to take that?

Yes, happy to. We are very aggressively implementing agentic workflows throughout Absci, and that includes not just in science and R&D, but also across SG&A. So we're in a period where we're rolling that out.

We're already seeing significant efficiency gains, and we expect to realize those in terms of cost reduction as well as capability gains on a go-forward basis. So you can think of it even over the next few months, we should start realizing some of those gains.

Your next questions come from the line of Vamil Divan from Guggenheim.

It's Arseniy on for Vamil. I have one more follow-up on the hair repigmentation opportunity. You previously talked about it as being roughly the same size as the AGA market. And my question is, what do you expect to see there?

Like what readout do you think would be clinically meaningful? And then would you consider pursuing it as a separate indication down the line with additional studies or would it be sort of an extra claim in the label in addition to the AGA indication? Just any color on that would be helpful.

Yes. Look, we're really excited about the potential for repigmentation. We do see it as creating even a bigger market opportunity than what we currently have. Right now, it's an exploratory endpoint, and we're going to see how the readouts go up to 13- and 26-week and then determine how we want to proceed forward from there. Ransi, I don't know if you have any other color you want to add to that.

Yes, I think you summed it up well, Zach. And the [indiscernible] data from that other program are really interesting and exciting. And at this point, we're looking to see what we can see. But mechanistically, it does make sense that it's a potential finding.

We have reached the end of the question and answer session. This also concludes our call for today. Thank you, everyone, for attending this call. You may now disconnect. Goodbye.

Good afternoon, everyone, and thank you for joining me in the fourth day of the Needham Healthcare Conference. My name is Gil Blum, and I'm a senior biotech analyst here at Needham & Company. It is my pleasure to have with me today Absci management, Sean McClain, the CEO; and Zach Jonasson, the CFO. Absci is a very interesting company that focus on AI and these days, sort of a snowflake.

So maybe you guys can start with a brief overview of the company, the main technology and kind of how you view your value proposition.

Yes, absolutely. So I found the company 15 years ago. Originally, we weren't focused on drug development. It was technology for scaling protein-protein interactions. We adopted AI very early on to be able to leverage AI to actually start designing the antibodies and the drugs with the attributes that we wanted. We all know that traditional drug discovery has been like searching for a needle in the haystack.

And with AI, you can now start to actually create that needle, designing all the attributes that you want and start to actually go after some of these harder-to-drug targets. And we applied the technology in partnerships, and we quickly realized that we wanted to build value ourselves with exciting targets, one of those being actually the prolactin receptor and started to build out our own pipeline. We brought on an incredible drug hunter, Andreas Busch, that really helped build out the early portfolio and have been able to explore some really exciting biology with the prolactin receptor, which were, as you mentioned, targeting a derm indication, but I think it has much bigger implications than just derm.

It's definitely, I would say, a very underappreciated target. And I think the reason for that is the name, prolactin -- prolactation. And -- but you see it all over the body. You don't see it in the skin and the hair. You see it in the endometrial tissue. You see it in your bones. You see it in the synovium on immune cells. It's really all over the place. And -- so what we're doing now is we have 2 programs that are in the clinic that are going after this is prolactin receptor biology.

First is AGA, androgenetic alopecia as well as endometriosis and then using the AI platform, then to continue to build out a very robust platform around this biology and adjacent biology. And a lot of this is focused in on inflammation and so building out bispecifics. And one of the things that I'm really excited about in terms of just AI and where it's all headed is being able to take the de novo model that we've built with these Agentic AI models and really just being able to scale individuals kind of create a second brain and be able to not only scale yourself, scale your team. And I think you're going to start getting much better ROI. You're going to be able to get to new novel target biology, I think, faster than ever before. And so we're excited about what the future holds, not only for AI, but also for the prolactin receptor and the prolactin biology.

So maybe spending a second on the platform and the AI side of things. I mean there are a few names out in the space, a few recent IPOs, Generate comes to mind and ICON. What would you say is your special sauce as it relates to kind of how you approach biology?

Yes, absolutely. So you have to take a multimodal approach to this. So first off is the data. I think that the data that we've been generating has been really valuable to being able to get the results that we've had, not only for training them all, but just validating being able to rapidly test, do the AI solutions to actually give you the output that you're looking for. And we've been able to leverage that to be able to go after 0 prior epitopes where there was no previous known binder.

And so I think that, that opens up exciting novel biology or at least biology that has been known but has been difficult to drug in our partnership with Almirall, we've been able to drug an ion channel, which have notoriously hard to drug with antibodies. And we got very high specificity with the antibody that we developed there. And so that's kind of the design aspect. But then we're really looking at integrating AI across the board. How can you use it in target discovery, how can you kind of string everything together with Agentic workflows and be able to kind of create these very rapid cycle times. But what we're seeing is that the -- outside of the Agentic AI, the data is really key to ensuring that you get the outputs that you're looking for, whether that's on the target side or the design side.

So maybe a broader question for both of you. It feels like we're at the best end of the boom-bust cycle as it relates to TechBio. What do you think -- what would be an aha moment for an investor here? And what kind of -- what are people looking for?

I think the upcoming readout we have is going to be, I think, a big validation of the platform. This will be one of the first Phase II readouts, proof-of-concept readout in humans of AI-designed antibody. And we're going to get the opportunity to see like not only did we get this antibody to the clinic faster and cheaper than traditional means? Were we actually able to show improved efficacy or any efficacy in androgenic alopecia. And we believe that, that's going to be a huge proof point. And that's what I think investors are looking for, like can these AI designed drugs, AI discovered targets really be -- are they able to provide value? And I think the answer is wholeheartedly, yes, it takes time, but we're going to have that readout this year.

I would just add that there's an incredible amount of noise in the space, right? You've got preprints that fly out, a lot of marketing that's focused on in silico metrics or a lot of marketing that's focused on a hit rate with very limited wet lab validation. It just creates a lot of noise. And to Sean's point, I was on the investor side for 20 years. We really need to see where the value created. That's the asset, right? You need to see clinical validation around that.

And that's where we are 100% focused, right? We're not focused on hit rate. We're not focused on in silico metrics. We're focused on creating assets that can be differential to patients. And I think with ABS-201, that's what we're going to see this year, clinical readouts, showing efficacy, showing that we created molecules that are stable, easy to formulate, showing that they're safe, but also showing that we could do it in very fast turnaround time at a low cost. And I think that will validate the entire AI pipeline for what we're doing at least.

But it comes back to that focus, like you have to be focused on where the value is. AI is a tool and it's a tool to design assets that can create value for patients. And I think that gets lost in a lot of the noise.

Great. So very closely related question. Clearly, you guys are spending and focusing resources more on your lead program, which makes a lot of sense. Is there still capital being invested in the platform more broadly?

Yes, absolutely. And to Sean's point, I think what we're finding is we're seeing efficiency gains in the platform, and this is by leveraging data and those active learning cycles. But we're also seeing opportunities where we can reallocate some of that investment into building these Agentic pipelines. And that's something we're implementing across the company today, where we think not only will we see more efficiency gains on an FTE basis and other bases, but we'll also see better outcomes around like choosing the right targets, understanding the target biology.

And Gil, you can imagine how focused we are on prolactin. So we're deploying those workflows on prolactin and have been doing so for the past 6 to 12 months. And I think that's -- I would confidently say to you today, we are a leader in understanding that biology. And to Sean's point, I think there are other indications in that space that are quite interesting for us.

Excellent. I do want to spend a significant portion of our time on alopecia. Lots of excitement on this asset. You mentioned the development history briefly. Maybe you can provide a bit more detail there where it came from and how you upgraded it.

Yes, absolutely. So it actually started a lot back in the early 2000s with the work from Professor Ralf Paus, really a world-renowned hair expert. And they were originally -- they had some interesting work that came out showing that prolactin may be involved in driving the miniaturization. It wasn't fully baked at that point in time, but there is definitely strong leading indicators. And then interestingly enough, Andreas Busch, our former Chief Innovation Officer, just retired, had looked at this for endometriosis and it was kind of serendipitous discovery where the mice that were on drug regrew the hair faster than those -- than the control arm.

And so oh, wow, like prolactin seems to be involved in hair regrowth and it matched up to the work that Ralf Paus had done earlier. And so they went on and did a stump-tailed macaque study -- and in this stump-tailed macaque model, it's a naturally occurring AGA model. They naturally bald and lose their hair. And actually, early minoxidil studies actually used this to validate minoxidil could be used as a therapy for AGA. And lo and behold, these monkeys that were very bald completely regrew their hair. And they also repigmented their hair. They went from gray to jet black.

And what was additionally remarkable was the regenerative nature of what you saw. So 4 years post treatment, so they treated for 6 months and then continue to follow them. They continue to -- they continue to grow their hair 4 years post treatment, which actually shows from a mechanistic standpoint that they were able to rebuild the stem cell niche and truly regenerate the follicle and kind of the machinery necessary to reverse the miniaturization of those hairs.

And so Bayer at the time, they didn't want to pursue either of those indications. They ended up out-licensing that molecule to Hope Biomedicines, molecules HMI-115, though there were some, I would say, fundamental issues, both on molecule as well as how the Phase I was done. So first, with the Phase I they kind of shot themselves in the foot a little bit in terms of being conservative on the dose escalation. And so they didn't dose high enough. And the issue with that is in this particular mechanism, we know achieving 90% receptor occupancy is very crucial.

And so if you're not able to dose high enough, you're just going to have to have more doses that are needed to achieve the 90% receptor occupancy. And then additionally, it's formulated at like 70 mg per ml. And with that, they couldn't achieve, I think, good subcu dosing. So -- what we're modeling is, I think, roughly 2 to 3 doses over 6 months, and that achieves 90% receptor occupancy with what we modeled from them to achieve that, I think they'd have to have like 20 to 25 doses. And so that's just not commercially viable.

And so essentially, what we did was used our AI model to ensure that we could get the half-life that was needed, the high potency and be able to have the dosing frequency that's needed for a direct-to-consumer play. And then the more we kind of dove into the biology, the more we became super fascinated with what was going on. I mean the kind of the similar mechanism you saw in hair, kind of this -- this fibroblast macrophage-like crosstalk that drives inflammation and drives miniaturization, is a very similar mechanism to what you see in the endometrial tissue and the synovium. And so it does seem to sit on this stress-inflammatory axis that really wasn't well known or there's evidence of it in different places, but it hasn't really been well characterized and well talked about.

So one comment we get from investors when we discuss specifically this mechanism of action is that if it's so good, why haven't you never heard of it before. But I know it's a very circular question, but just bringing that up.

Yes, 100%. I mean I think the #1 reason why it has not been brought up is because it's been looked at as a women's health reproductive hormone. It's in the name, prolactin, prolactation. Everyone thinks of it from a lactation standpoint. And so when you see it in immune cells or you see it in the synovium, immunologist may just say, "Oh, well, that's interesting, but that's a women's health hormone for lactation and kind of push it to the side."

And I would say like it's not highly expressed either. It's almost like an ion channel or GPCR, like even in single cell sequencing, it's very low abundancy. Maybe you have it on 1% to 2% of cells. And so it definitely kind of goes, I think, under the radar in single cell sequencing, but I think, again, the #1 reason is the name has completely thrown it off. And I think we're seeing that these "women's health hormones or reproductive hormones " actually have a much bigger role, not only in women, but in men as well. I mean even like progesterone, like, I think a lot of people think of that as a women's health hormone, but it's in men as well. And I think that there's bigger roles that these hormones are playing than I think we previously understood.

I think if anything, the prominence of hormones should be increasing all the time just given what's going on with GLPs. That is a hormone.

Yes. Exactly.

One of the other aha moments for us and look, the literature started on this in the '90s, but there's a different promoter in the periphery. So there's -- the promoter everybody thinks about is the pituitary promoter. That's -- people think about it as the classic endocrine hormone, it's systemic. But in tissue, in the periphery, it's regulated through a different promoter that's completely dopamine independent. And so you've got the systemic prolactin, but then you have prolactin signaling that's regulated, expressed in local tissue, including the skin and including in the hair follicle.

So maybe talk a bit about the HAA market. This is something that I think on the sell side, we have trouble with. It's too big, and we have to handicap that somehow. So if there's any way to like realistically view this...

Yes. And look, that's a problem we want to have, right? So we're happy to have that problem. The way we've looked at the market, first off, we started with interviewing derms, KOLs and then moved to interviewing patients. So we had a better understanding of what drives patients. And that led us to commission a consumer research study. We surveyed 600 patients. I know you guys have run an interesting survey, too.

And we asked those patients a lot of questions in the survey, including what were the psychological social impacts of AGA. And those are very pronounced. And they're also very similar to what you see with weight loss. So just again, the analogy to the GLP-1s. But when we look at that market, we dug into at least for this survey, standard of care, what motivates patients, how patients think about standard of care and what their response would be to new categories of medicine that could treat the condition. And I think what we found at a high level, and you can go into some of the data, if you want, is that, by and large, patients are not satisfied with standard of care.

You really have 2 categories of treatment. And really, when you boil it down, you have one category, which is you either use a topical or oral every day or twice a day. So even if you get a transplant, you have to use some maintenance therapy. And that's -- every option today looks like that, and it's almost like a gun to your head, right? If you start taking minoxidil oral or topical, you can see some -- a lot of patients, not all, there's a lot of variability. But if you see hair growth, you have to stay on that for the rest of your life.

As soon as you go off, you shed your hair and you go back to the baseline you would have been at, so not the baseline where you started, but the baseline you would have been at. And a lot of patients don't like that profile, and they don't like being locked in like that. And so when we've tested the TPP for ABS-201, we presented a fairly modest efficacy to patients. So high end of oral minoxidil, I think 35, 40 terminal area hair count addition. But with the dosing frequency that's about 3 doses over 6 months with another 2.5 years of durability.

So set it, forget it and see that efficacy over that durability, it really tests through the roof for us. We see huge number of percentage of patients, male and female, who say they would go out and seek to take this product if they were available today. And in fact, when we zero in on those patients who are currently using oral minoxidil, those percentages go up even higher. And then the other thing that we thought was very instructive and exciting is we ask patients, what would you use as first line?

You've got shampoos, conditioners that are cheap supplements, none of them work very well, but they're cheap. And then you've got minoxidil oral also cheap, and you've got premium product like this that would be priced much higher. Over 1/3 of patients said they would want to use ABS-201 if we hit the TPP as first line. So we think there's a huge market opportunity here. And even factoring in the durability and the pricing, we've come to a place where we think if we're successful here, we could be treating 5 million to 9 million patients a year in the U.S. and with a TAM that's north of $25 billion.

Those are some big numbers.

So now you see why we're focused on executing this program, priority 1.

So let's talk a little bit about the clinical development because this is a key focus for most investors. Starting with the single ascending dose, pretty soon, we're going to see some level of data from there. Maybe give some guidance on that and then talk about the efficacy data readouts.

Do you want me -- you got it.

Yes. I'm happy to give a high-level overview of kind of where we sit. So first half of this year, we are going to be coming out with the top line safety data along with what the PK looks like to ensure that we can fit in that 2 to 3 doses over a 6-month period. And then in the second half of this year, we'll have the 13-week interim. The full study is 26-week. 13-week, we will be showing likely responder data with the total area hair count.

We do, however, want to be clear that we see this as directional. We do see the 26-week readout being in that 30 to 40 hairs per square centimeter that we continue to guide to. We just want to be clear that we do not know at 13 weeks exactly what hair count is going to be there. And so we see this as an important directional readout, but are not setting any guidance to that 13 week.

What would be a win in your view for 13 weeks?

I believe being able to show that you have hair growth at 13 weeks, I think, is going to be a win.

So lots of excitement on the investor side around Veradermics, recent IPO. This is a reformulation for minoxidil, just extending its effectiveness. And I mean, how does this help or hurt you as you're looking forward into your readout?

Look, the more wins that we can get in this space, the better. I think it really shows investors that this is an exciting space. It is as big as the GLP market. There's huge demand out there. And I think having even something like a reformulated minoxidil that could show similar or potentially better efficacy than oral minoxidil, I think goes to show like the need is there and even like small incremental change could be a home run.

I think just really hits home how the standard of care is so poor and people are really wanting to figure out how can I get something that's more efficacious, that could actually be regenerative. And I think that that's something that we give with our product is not only potentially oral minoxidil level efficacy or better, but the fact that you could do 2 to 3 injections over 6 months and have durability for the next couple of years, I think that's really exciting for patients. And I think that we all can play. And in terms of like synergies, I think the one thing that's nice about minoxidil is that it's super cheap.

We're obviously going to have a premium product here. And so if you have a premium product, with something that's cheap like oral minoxidil, I think you are going to see people combining these and seeing what effects that they could get through combo. And I think there's reason to believe actually from just a mechanistic standpoint, how you could have oral minoxidil synergized with the prolactin receptor. I mean, the biology, you're able to essentially get the stem cell niche built back up. And then if you have oral minoxidil that's ensuring more blood flow, in theory, it could be additive. And so all in all, I think it's great for the space.

Okay. So looking forward, let's assume everything goes well as it relates to the proof of concept -- any thoughts on what a pivotal study potentially looks like, especially on -- there are some requirements from the FDA for you to have enough patients dosed basically?

Yes. And we're having our dialogue with the FDA right now, both around the endometriosis study design, which we intend to initiate a Phase II study there in Q4 as well as what registrational trials will look like for AGA. We do assume we'll need about 1,500 patients exposed over all of the clinical trials. So that would include the numbers in this trial right now. But the nice thing about this is these registrational studies, in particular, are going to recruit very quickly. And the cost per patient is significantly lower than other indications. And so the all-in cost and the faster speed with this very large market at the other end, creates a very attractive ROI. And that's again why we prioritized this program.

Right. I know we're getting way ahead of ourselves, but do you think there's a similar path for ABS-201 to what we've seen with GLPs? Think about direct-to-consumer strategies, partnering with Hims & Hers. We've seen some interesting things in this space.

I think that that's one of the most exciting pieces here is being able to have a relationship with the consumer, with the patient and being able to go direct to consumer. And one of the things that you saw with BOTOX was BOTOX was able to build a really robust brand due to the patient interaction. And post-patent cliff LOE, they retained 80-plus percent of the market share. And I think that you can see a similar thing happening here is if you build a robust brand that patients trust and you continue to provide assets and drugs that give them that total vitality that they're looking for, I think they're going to continue to come back and you're going to be able to maintain that market share past LOE and past patent cliffs.

And I think that, that's actually quite exciting. And additionally, we do have follow-on programs, follow-on kind of best-in-class to continue to be able to provide further benefits to what ABS-201 already has. And so we're kind of looking at those strategies as well. But I think it's a really exciting opportunity that we have here.

And again, getting ahead of ourselves about -- if everything works out, what do you think your go-to-market strategy is going to look like?

I think very different than traditional pharma commercialization. I think first off, I think partnering with the derms is going to be incredibly important. And I think we're building really great relationships with the derms I think launching with them is going to be great. And then additionally, having the direct-to-consumer play alongside that or after that, I think, is going to be a key part to this overall commercialization strategy. Zach, if you want to add anything else to that?

No. I mean I think you nailed it. I mean there's very good incentive alignment with derms and other practitioners. But to Sean's point, I think it's a very different marketing exercise where you develop that brand and that relationship with the patient. And I think what we find, again, stating in the GLP-1 space as an example for weight loss, doctors don't need to go find patients who prescribe GLPs for weight loss. The patients are finding the doctors. And I think we're going to see the same kind of phenomenon here. We're several years away. We think we're -- we think we're likely to be in a position to go out and get approval by 2030. So it's not that far out, but our belief is we'll be able to do something really creative here that's very customer focused.

And it's going to be so much driven by the social media, the influencers. I mean you already see that with the peptides and these looksmaxers, so much of this is all being driven by social media for good or for bad, but we really do think like being able to drive it through those channels is ultimately going to get, I think, the fastest uptake here.

I would venture to say that's very accurate, specifically for GLPs because that's an old, old drug. It was on the market for many, many years.

Yes.

All right. I do want to spend a minute or 2 at least on endometriosis. Again, interesting that there's a commonality here. What do you guys think the MOA is? And maybe for those who aren't familiar in the space, just to give people an idea of the unmet need in this particular indication.

Yes. This has been an indication that I think has been overlooked and definitely underfunded for quite some time. And it's a huge, huge unmet medical need with a large patient population. Right now, it's estimated 1 in 10 women have endometriosis. And since we don't have great ways to diagnose these patients, we do believe that this is an underrepresentation of the amount of women that have this. And right now, standard of care is really poor.

You have GnRHs that are out there. This is a hormonal drug that does lead to some serious adverse events and women can only stay on these for 6 months, and it's not a long-term solution at all. And essentially, what happens is you get these lesion formations in the endometrial tissue and that drives overall pain during administration. And again, nothing out there right now is disease-modifying or even being able to address the pain that effectively.

And if you look at the mechanism of prolactin and its role, it does look like from the animal studies that were done as well as actually the HMI -115 Phase II study, what you see is that prolactin drives the lesion formation and it also looks to drive the pain sensitization as well. And so by blocking it, you're essentially reducing or eliminating lesion formation as well as eliminating the overall pain that's associated with it.

And I think that the piece that we're excited about as well as the recent clinical validation from HOPE, HMI-115, they were able to show overall pain reduction in dysmenorrhea, pain during administration. And we feel like that, that is actual really strong evidence that this will work. And we also -- it's not published, but we do have very strong genetic evidence of this as well. So all in all, we do think that this could be disease-modifying, and we are going to be going after the pain piece of this, the pain during administration.

And I think one of the things we're really excited about is having Ransi on the team as our Chief Medical Officer. He worked on the NaV1.8 that recently got approved at Vertex, who is the SVP of Clinical Development there. So he knows pain really well. And I think we're set up well to I think, have potentially a successful readout on this. And I think it's a space that has huge unmet medical need and standard of care is just really poor.

Great. So maybe a last couple of general questions. So you guys had a TL1A asset, you still do. Should there be any expectation for investors on likely monetization of this, just given its older generation tech?

Yes. I'd say, look, we're completing that Phase I trial by the end of this quarter. And what we have said publicly is we are not going to invest in developing that asset. And I think those reasons should be clear. I mean, IBD is a very challenging space for development. Patient recruitment is extremely slow and it's very competitive. Whereas you look at us allocating resources in the right way, we're allocating towards ABS-201, where we have really no competition on the mechanism for AGA.

And we think based on what we've seen HOPE doing, they're basically recruited to only develop their molecule in China for endometriosis. So we think we could be first to market in endo as well. And those are significant opportunities with less competition. And certainly with AGA, very rapid recruitment and low cost for trial. So we have discussed that publicly for ABS-101, the anti-TL1A program. We are looking to potentially partner that and looking at other new indications with partners, but not ones where we would invest capital in. But we are also derivatizing that into some bispecifics that could be synergistic with some of our other targets in our pipeline. And that would not be aimed towards IBD, be aimed towards other indications.

And cash position, cash runway?

Yes. You probably saw we recently released an update on cash. We had $144 million, just above that end of Q1, and that gives us runway into the first half of 2028. So essentially allows us to get our full readout here on the ABS-201 AGA trial as well as we believe an interim readout on the endometriosis study that we're going to start in Q4.

That's very helpful. So kind of a last summary from you guys. I mean, lots to unpack overall, but what do you think investors are missing about your story? .

I think first, it's the -- the prolactin, I think people are still, I think, understanding how is this mechanism going to work, like why hasn't anybody looked at prolactin. So I think that there's like this -- it's new biology that's been out there, and I think people are just kind of wrapping their heads around the actual mechanism of action. And I think when you dive into the science, I think you see that there's very, very strong evidence of this working in not only AGA and endometriosis, but actually other indications as well.

And to me, I think that, that's probably like the biggest hurdle. And it's kind of like similar to [indiscernible], like that was kind of a target off the beaten path that I think folks didn't know if it was going to work and they got a great readout. I think it's a very similar type of story here. Again, it's just an underappreciated target that I think has a lot of very strong data backing it.

And Gil, I would add to that, like I think there's a lot of investors, at least still recently categorized this as an AI platform and didn't really look at the assets. And I think what we're seeing now on the IR front is a lot of investor engagement and a lot of focus around ABS-201 for both indications, but predominantly in AGA right now since that trial is running. And so we're seeing some recent initiation from investors and a lot of diligence going on. So I think that dynamic of sort of somehow being kind of miscategorized and not understood in terms of the true assets we're creating using the platform is starting to change.

Great. All right. We're out of time. I want to thank you both again for attending today.

Yes. Thank you, Gil.

Thanks, Gil.

Good day, and thank you for standing by. Welcome to the Absci Fourth Quarter and Full Year 2025 Business Update Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to hand it over to our first speaker, Alex Khan, Corporate Vice President of Investor Relations. Please go ahead.

Thank you. earlier today, Absci released financial and operating results for the quarter and full year ended December 31, 2025. If you haven't received this news release or if you'd like to be added to the company's distribution list, please send an e-mail to [email protected]. An archived webcast of this call will be available for replay on Absci's Investor Relations website at investors.absci.com for at least 90 days after this call.

Joining me today are Sean McClain, Absci's Founder and CEO, and Zach Jonasson, Chief Financial Officer and Chief Business Officer; and Ransi Somaratne, Absci's new Chief Medical Officer.

Before we begin, I'd like to remind you the management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not replace undue reliance on forward-looking statements.

These include statements regarding the development and clinical progress of ABS-201, anticipaed clinical trial design, enrollment and time lines, expected clinical data readouts and their timing, anticipated characteristics and product profile, ABS-201 as a drug product, our target product profile and attributes, the potential for an expedited development pathway, including the possibility of advancing directly from Phase I/IIa into Phase III, our plan engagement with the FDA regarding development strategy and potential market opportunity and commercial of ABS-201.

Certain statements may also include projections regarding potential market opportunity. These estimates are based on various assumptions, including potential regulatory approval, the final approved label and the evolving competitive landscape, any of which could cause our actual addressable market to differ materially from these projections. In addition, certain research findings discussed today reflect participant responses to hypothetical product profile and do not represent clinical results for ABS-201. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the section entitled Forward-looking Statements and the press release Absci issued today and in the documents and reports filed by Absci from time to time with the Securities and Exchange Commission.

Except as required by law, Absci disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements either because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, March 24, 2026. With that, I'll turn the call over to Sean.

Thanks, Alex. Good afternoon, everyone. Thank you for joining us for our fourth quarter business update call. We had a strong fourth quarter ABS-201 is in the clinic, and we have dosed our first 3 SAD cohorts in our Phase I/IIa headline trial with favorable emerging safety data. We expanded it into endometriosis as a second multibillion-dollar indication. As we published what we believe is the first demonstration of de novo [ full-length ] antibody designed to 0 prior epitopes. I'll walk you through each of these today.

Also on the call today is Dr. Ransi Somaratne, our new Chief Medical Officer; Ransi spent nearly 2 decades in clinical development across multiple therapeutic areas at Amgen, BioMarin and most recently, Vertex, where he served as SVP of Clinical Development and Translational Medicine. At Vertex, he was instrumental in the development of JOURNAVX, the first NaV1.8 inhibitor approved for acute pain. Taking it from late-stage development through FDA approval, that registrational experience is exactly what we need as ABS-201 advances towards proof of concept and if successful, into registrational trials.

He'll walk you through the clinical development program in detail shortly. I also want to acknowledge Andreas Busch who retires this month. Andreas built our drug creation organization from the ground up, he integrated our AI design capabilities with our wet lab platform and recruited the leadership team that will carry that work forward, he will continue as Co-Chair of our Scientific Advisory Board.

Andreas has been more than a colleague to me, he's been a trusted partner and a friend. Our development operations are in excellent hands because of the foundation he built. Our KOL advisory networks for both AJ and endometriosis continue to expand. You heard from professors, [ Poss, Sinclair and Dr. Goldberg ] at our December seminar, and we have now assembled a dedicated endometriosis advisory Board of esteemed experts that is actively shaping our Phase II trial design and endpoint selection.

In December, we hosted a seminar on ABS-201 for AGA featuring Absci team and several of our KOL advisers. A full replay is available on our website. Durable hair regrowth remains a significant unmet need in AGA with current approved therapy showing meaningful limitations in long-term efficacy for patients. ABS-201 was designed with the aim to change that. During the seminar, we presented human ex-vivo data demonstrating the prolactin receptor mechanism in androgenic alopecia. working with Professor [ Pous ] using translational human ex vivo scalp models, we showed that ABS-201 stimulates hair growth by generating the stem cell niche. Inhibition of prolactin receptor signaling correlates with prolongation of androgen and restoration of gross signaling, preservation and expansion of stem cell niche and potential for follicular reconversion from [indiscernible] to terminal hair polices.

Importantly, ABS-201 showed growth-promoting effects without exogenous prolactin, meaning it effectively neutralizes locally produced intrafollicular prolactin signaling. The clinical implication is significant. We believe ABS-201's mechanism is not limited to patients with elevated systemic prolactin, but that it can engage the target at anyone who has active local prolactin receptor signaling. ABS-201 was engineered with an extended half-life to support infrequent dosing.

In preclinical studies, it demonstrated a three to fourfold longer half-life than a competitor antibody. We believe this profile may enable a convenient dosing regime of just 2 to 3 administrations for durable, multiyear hair regrowth. Looking at our clinical time line, we anticipate preliminary safety, tolerability and PK data for our ongoing headline trial in the first half of this year.

That will be followed by an interim 13-week proof-of-concept data, including exploratory efficacy endpoints in the second half. Full 26-week proof-of-concept data will come in early '27. Ransi will discuss the trial progress in more detail shortly. As a reminder, we intend to use safety, tolerability and PK from the ongoing ABS-201 study to support initiation of the Phase II clinical trial in endometriosis in Q4 this year.

The engagement we have had with endometriosis patients, advocacy groups and KOLs has reinforced our conviction. This condition has been underserved for decades and patients need better options. Endometriosis is estimated to affect approximately 10% of women of reproductive age worldwide. There is currently no FDA-approved disease-modifying therapy.

Current medical and surgical management strategies have significant limitations. ABS-201 targets nonsex harmone pathway distinct from existing hormonal therapies. Our preclinical data combined with positive Phase II results from a competitor antiprolactan receptor antibody, validating the mechanism in humans support the potential to modify disease progression, address both pain and lesion growth and offer differentiated safety profile.

Beyond ABS-201, our other programs, ABS-101, 301 and 501 continue to progress. Each of these we see as better suited for our partner, and we remain engaged in discussions with multiple strategic parties. This allows us to focus our resources on ABS-201 and invest in additional early-stage programs. Our strategy is to go after underexplored targets in large markets where unmet need is significant and competition is low.

That's where the platform creates the most differentiation and where we see the highest return on our R&D investment. To put a number on it, we have advanced our first 2 programs from AI design to IND in approximately 2 years, at a roughly $15 million investment per program compared to an industry standard of 4 to 6 years and $50 million or more. Earlier this year, we published details on Origin-1, our generative AI platform for de novo antibody design integrated with our lab in the loop validation.

Origin-1 designed full-length antibodies against zero-prior epitopes, targets with no reported complex structure. It generates lead candidates by screening fewer than 100 designs per target with atomically accurate predictive structures and confirmed functional activity, but the value of the platform is measured by the assets we create. We are expanding our pipeline and expect to advance additional programs. We'll provide updates as those programs mature.

With that, I'll turn it over to Ransi to walk you through the ABS-201 clinical program. Ransi?

Thanks, Sean. Good afternoon, everyone. It's great to be here. My name is Ransi Somaratne, and I am thrilled to be joining the Absci team as its Chief Medical Officer. I'm a cardiologist and internist by training and I've had the opportunity to work at great organizations such as BioMarin and Amgen and most recently Vertex Pharmaceuticals, where I served as Senior Vice President of Clinical Development and Translational Medicine.

I've been fortunate enough to lead clinical development of groundbreaking programs during my career, including Journavx at Vertex, the first NaV1.8 inhibitor approved for moderate to severe acute pain. I'm excited to join Absci at such an important time as we continue on our journey to use our integrated AI and wet lab platform to create new and differentiated medicines to improve the lives of patients in need.

In the near term, I'm excited to be advancing our ABS-201 program for both AGA and endometriosis through the clinic. Both of these programs could represent significant advances compared to available therapies. I've been involved with multiple complex clinical trials spanning pain, cardiovascular disease, nephrology and other diverse disease areas, and I'm impressed by the Absci team's rigorous approach to the ABS-201 clinical trial designs. I believe Absci has built a differentiated platform and as a drug developer, I am so enthusiastic about the opportunity to contribute to the advancement of its pipeline, including ABS-201 at this stage of the company's growth.

We are advancing the clinical development of ABS-201 for 2 indications with significant unmet medical need, androgenetic alopecia and endometriosis. Our ongoing Phase I/IIa headline trial is a randomized, double-blind, placebo-controlled study, efficiently serving both as a first-in-human study of ABS-201 while also providing preliminary proof-of-concept data and AGA. The AGA POC component is incorporated into the multiple ascending dose part of the trial. The primary endpoints are safety and tolerability, while secondary endpoints include PK, PD, immunogenicity, target area hair count, target area hair width and target area darkening and segmentation.

We will also collect patient-reported outcomes data. The trial is enrolling up to 227 healthy volunteers with or without AGA. The single ascending dose or SAD portion of the trial is testing 4 intravenous dose groups for safety, tolerability, PK and PD. The SAD portion of the trial will be followed by 3 subcutaneous, multiple ascending dose groups in healthy volunteers with androgenetic alopecia.

While the MAD portion of the study also looks at safety, tolerability and PK/PD, we have powered the MAD portion to demonstrate proof-of-concept in AGA. We plan to share a 13-week interim proof-of-concept data in the second half of this year, followed by 26-week data in early 2027. With the 13-week data we hope to demonstrate directionally positive hair growth compared to baseline, which would translate to even more robust growth at the 26-week readout and beyond.

These results will be consistent with our understanding of the mechanism of action and supported by a naturally occurring nonhuman primate model for AGA. Furthermore, we have ongoing engagement with the FDA regarding an efficient clinical development strategy that could support expedited clinical development with the potential of advancing directly from Phase I/IIa into Phase III registrational trials.

Today, we are pleased to share that we have successfully dosed the first 3 cohorts in the SAD portion of our ongoing Phase I/IIa headline trial. To date, ABS-201 has been well tolerated with favorable emerging safety data. Additionally, the emerging PK data support the current dosing regimen in the headline trial as we have modeled. We are on track to dose SAD cohort 4 as well as the first MAD cohort. For endometriosis, we plan to use data from the Phase I/IIa headline trial to provide safety, tolerability and PK assessments that will support Phase II clinical development beginning in Q4.

We anticipate an interim proof-of-concept readout from this trial in the second half of 2027. With that, I'll pass it over to Zach to discuss our strategy, partnerships and outlook and to provide an update on our financials. Zach?

Thanks, Ransi. Our strategic priority is executing the clinical development of ABS-201 in both AGA and endometriosis given the significant potential return on investment these programs offer. In particular, our lead program in AGA represents a unique opportunity. We believe this program has the potential for streamlined clinical development and a potentially significant commercial opportunity in the cash pay market if the program is successfully advanced through development.

As Ransi discussed, we are currently executing an efficient Phase I/IIa trial design to position us for registrational studies that could enable a potential FDA approval in the 2030 time frame. We expect the registrational trials to enroll rapidly and to cost significantly less than typical registrational trials for other large indications. Our market research, some of which was shared during the ABS-201 KOL seminar in December supports the commercial potential of ABS-201 as a new premium category of AGA therapy. Results from the survey we commissioned, which included 610 participants experiencing AGA support our belief that there is a meaningful demand for a product with the ABS-201 anticipated minimum target product profile.

The TPT evaluated in the survey assumed a level of hair regrowth comparable to that reported in the literature for high-dose oral minoxidil, but with a potential durability of 2 to 3 years. The hypothetical profile also contemplated a 6-month dosing regimen, consisting of approximately 3 subcutaneous administrations as compared to currently available oral or topical treatments that require daily or twice daily administration.

Key highlights from the consumer survey include 87% of men and 69% of women's surveyed indicated they would be extremely likely or very likely to ask the health care professional about ABS-201 if it were available on the market today. Moreover, these figures increased to 92% and 89%, respectively, for men and women who are currently using oral standard of care, for example, oral minoxidil. And over 2/3 of men and women who are currently using another hair loss product that they would be extremely or very likely to try ABS-201 as the first line if it were available.

These results, together with data from our survey of key opinion leaders, are supportive of potentially significant adoption of ABS-201 among AGA consumers if the product is successfully developed and approved. Based on our market research, we estimate a potential total addressable AGA population for ABS-201 in the U.S. of approximately 15 million to 18 million consumers. Assuming a 2- to 3-year treatment durability, the total potential annual treatable patient volume could range between 5 million and 9 million consumers per year.

Our survey data suggests this segment of the AGA population would be interested in purchasing the product with ABS-201's anticipated profile at a premium price relative to the current standard of care treatments. Accordingly, based on all of our market research, we believe the total addressable market for ABS-201 in the United States could be substantial with some estimates exceeding $25 billion on an annual basis. While we believe our estimates are reasonable and based on available data, actual market size and ABS-201's ability to capture any portion of that market will depend on numerous factors, including clinical trial outcomes, regulatory approval, pricing and competition.

This program may offer additional commercial upside as the headline clinical trial is also designed to explore whether ABS-201 can achieve other aesthetic outcomes, such as restoration of hair pigmentation. As such outcomes are demonstrated in clinical studies and supported by regulatory approval, they could open up additional significant markets beyond AGA.

If ABS-201 is approved, we believe we will be well positioned for commercialization in the United States. Existing go-to-market channels and provider networks appear to be suited for a premium product with the anticipated ABS-201 target product profile. Approximately 80% of consumers care treatments from dermatologists, med spas and plastic surgeons, which together offer over 30,000 potential retail locations across the United States. We have begun establishing relationships with these practitioner market channels.

And looking ahead, we need to continue to create awareness among this practitioner community and when appropriate, to establish direct patient engagement. As ABS-201 moves forward towards major potential value inflection points, we plan to continue progressing our internal preclinical programs as well as our partner programs. In all, we remain highly focused and committed to diligently allocating our capital and resources to programs that offer the greatest potential return on investment.

Turning now to our financials. Revenue in the fourth quarter was $700,000 as we continue to progress our partner programs. Research and development expenses were $25.3 million for the 3 months ending December 31, 2025 as compared to $18.4 million for the prior year period. This increase was primarily driven by advancement of Absci internal programs, including direct costs associated with external preclinical and clinical development of ABS-101 and ABS-201. Selling, general and administrative expenses were $8.6 million for the 3 months ending December 31, 2025, as compared to $8.8 million for the prior year period.

Additionally, we recorded a $5.1 million gain on the settlement of the company's contingent consideration during the fourth quarter of 2025. This resulted in net proceeds of $8.7 million of unrestricted cash. Cash, cash equivalents and marketable securities as of December 31, 2025, were $144.3 million as compared to $152.5 million as of September 30, 2025. We believe our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations into the first half of 2028.

We remain focused on opportunities to generate additional non-dilutive cash inflows that could come from early-stage asset transactions associated with our wholly owned internal programs and/or new platform collaborations with large Pharma. Our current balance sheet supports our execution of key upcoming catalysts, including potential proof-of-concept readouts for both AGA and endometriosis. We are also well positioned to continue progressing our early-stage pipeline and to advance new partnership discussions in line with our business strategy. With that, I'll now turn it back to Sean.

Thanks, Zach. 2025 was a defining year for Absci. We dosed our first patient with ABS-201 expanded into a second multibillion-dollar indication and publish what we believe is the first demonstration of de novo antibody design to zero-prior epitopes. In 2026, we expect to deliver on our catalysts. Preliminary safety and PK data for ABS-201 in the first half, interim 13-week proof-of-concept, hair regrowth data in the second half and initiation of our Phase II endometriosis trial in Q4 subject to data and regulatory review.

Full 26-week proof-of-concept data for ABS-201 in AGA will follow in early '27. We have clinical momentum, the balance sheet to reach proof of concept in both indications and the team to execute. Thank you for your continued support. Operator, let's open the call for questions.

[Operator Instructions] First question will come from the line of Vamil Divan from Guggenheim Partners.

Great. So I guess, obviously, a lot of focus on 201. And a common question we've been getting from investors is just what we should be looking for or what you're looking for in terms of a target product profile, especially from an efficacy perspective? Obviously, there's not a lot of great options out there, but others that are in development. So I realize it's still a little bit early, but just if you can give a better sense of sort of what you're hoping to see from an efficacy perspective.

We obviously have the minoxidil options that are out there, we have competitors in development. Just what do you hope to see this land given that it will be an injectable. It sounds like it may be more of a premium-priced product. What are you hoping to see from an efficacy perspective?

Yes. Thank you, Vamil. It's a great question. And what we're looking to achieve, and I'll have Zack go into more details on this from our consumer quant study. But talking to physicians as well as patients, we believe that if we achieve a durable treatment as well as being able to achieve at or above minoxidil efficacy, we'll definitely have a very attractive [ PPP ]. And Zack, please feel free to kind of walk through more of the details on that given the consumer quant study we had just completed.

Yes. Thanks, Sean. Yes. And Vamil, I would just note the [ EPP ] that ABS 201 embodies or we think will embody is really a new category of therapy that we hope will deliver not only efficacy but durable efficacy and convenient administration. So to Sean's point, if the effect size in terms of terminal area hair count and the growth in terminal area hair count is consistent with high-dose oral minoxidil, so 35 to 40 hairs per square centimeter, we think that's a home run product.

And that's supported by the research we've done with consumers and KOLs. We think there's a significant product even below that threshold. But I think at that threshold, it's a very significant product we would characterize as a home run product. And keep in mind that additive with the other features of the profile, which would include durability and that convenient dosing of just a few injections.

I just going to also mention that if you look at the [indiscernible] data, it was well above that. So we do even have room to run on this. I think as home run product. But from what we're seeing from the ex-vivo data could be well above that as well for an upside scenario.

Okay. And then one other one, just a follow-up is on the safety side. So I think the words you've got favorable, emerging safety profile. So I don't know what you can elaborate at this point. So what you've seen from the cohorts that have gone through the SAD portion.

Yes, absolutely. Ransi, do you want to take that?

Yes. So it's early in the trial. But at this point, there is no evidence of any on-target or off-target safety signal based on a review of the safety data accumulated to date. But is encouraging so far.

[Operator Instructions] Our next question will come from the line of Brendan Smith from TD Cowen.

Maybe just another one quick on 201. I guess kind of given other pivotal studies in the space and maybe even in your conversations with FDA to date, maybe first, is it fair to expect that 6-month primary endpoint you're using in the math is the same duration of follow-up you'd expect for a registrational study? And then separately, just on the drug creation partnership, I think you flagged at least one new 1 with big pharma this year. Can you -- maybe just tell us even qualitatively how those conversations are going. We get asked a lot of time like kind of given all the money pharma spending internally on AI, what are they still coming to Absci for?And how should we really think about them leveraging the platform within the [ confinements ] of those deals?

Yes. Ransi, do you want to answer that first one and then Zach, you can take the second one.

Yes. So we have not yet engaged FDA on the design of our Phase III program. We're going to -- One of the reasons we're excited about the 13-week interim readout is that it's going to give us a much better idea of what the Phase III program will look like. But certainly, other companies are developing a 6-month pivotal endpoint with another 6 months of long-term safety data follow-up. So there are some predicates in the field. But we're going to look forward to our 13-week interim to and give you more details on that once we see the data.

Thanks. And this is Zach. I can comment on the partnership discussion. We continue to have productive discussions with pharma regarding platform partnerships. I do think it's important to note that we're focused on doing the right deal, not doing a deal. And so we're currently actively negotiating and looking at deal structures that could work for us. And I would comment as well, we have a healthy pipeline of internal programs that are being developed today. We haven't announced several of -- we have not yet announced several of those, but we will be looking to initiate partnering discussions around those programs later in this year.

[Operator Instructions] Our next question will come from the line of Brian Cheng from JPMorgan.

Sean, I think you said in your prepared remarks, you said 101, 301 and 501 continued progress. each of these, you see better suited for a partner. Just to clarify, are all of them now on the table for partnerships? Or do you think that you will want to develop 301 or 501 a bit more internally?

Yes. That's a great question, Brian. Just given our focus in particular and in I&I, given ABS-201, we believe us developing oncology doesn't make sense. And so with 301 and 501 being in oncology, we think that this is much better suited for a partner. We do have an earlier-stage pipeline that is developing where we should be nominating DCs this year that have not been announced that are in I&I and these are -- we could potentially take these forward ourselves assuming that the cash balance sheet is there and then we also have the optionality to partner those as well.

So we're definitely done harder work kind of building up that I&I platform or pipeline, I should say.

Got it. And maybe just 1 quick 1 on safety. I know you touched on this a little bit already. Just is the profile that you're seeing in terms of safety consistent with what you have seen in nonhuman primates. And are you seeing any particular impact of interest. Just curious if you can give us a little bit more color on how we should think about the TEAE profile.

Yes, absolutely. As Ransi said, I think we're really pleased with the profile that we're seeing to date. And Ransi, I don't know if there's anything or any further details you can comment on from a safety perspective.

pYes. We've looked at the TEAEs, there's really nothing that you would that would point to any sort of mechanism related safety signal or off-target mechanism related safety signal. We're looking very closely at labs. And other than onsie, twosie things, there's no pattern of anything at this point. But again, I have to caveat that it's early in the study with -- without a ton of people exposed.

And also today, given the encouraging profile, it definitely lines up really nicely with what you see from other studies, HMI-115s hitting a similar target as well as a few other assets that have been developed in oncology. You can see safety signals there for this particular pathway. And then you also have loss function mutations that -- in the prolactin receptor and these individuals were perfectly healthy, just did not have the ability to lactate.

So I'd say from what we've seen in other studies as well as the loss of function mutations, it tracks very nicely to what we're seeing in our own study. And as Ransi said, it's early days, but very encouraging.

[Operator Instructions] Next question will come from the line Srikripa Devarakonda from Truist Securities.

This is Alex on for Kripa, congrats on the progress. We had a question on 201 as well. Some of the investors that we talked to express caution about the ability for a molecule to get into the hair molecule to inhibit the palatine receptor. Can you talk about the data that supports the ability for the molecule to engage the target or if there's any reason to believe otherwise based on your perspective?

Yes. So you're definitely not going to have the penetration you have in -- or the biodistribution, I should say, in other organs, but there's definitely an ample blood flow going into the follicle. And again, you saw the data with the [indiscernible]. You saw the data as well with the mice. And so based on that, we have no reason to believe you wouldn't be able to get an antibody into the follicle. And the way we modeled the receptor occupancy was using a known bio distribution coefficient for the scalp and hair follicle, which is much lower than other tissues.

Ransi, I don't know if you have anything else you want to add on that point?

No, I think the -- thanks, Sean. I think the animal data are very encouraging, suggesting that there's adequate tissue penetration with other antibodies and even in 201 and Absci own work. .

Next question will come from the line of Debanjana Chatterjee from Jones Trading.

So I wanted to add that we some recent updates for [indiscernible] candidates, including clascosterone and also well extended release minoxidil is gaining traction. So how like -- could you remind us how you envision an anti-TRLR antibody to be used related to such agents, assuming that they are approved. And also, do these new developments or agents shift the bar for success that you have in mind, particularly in terms of expected target area hair count improvement.

Yes, it's a great question. First off, I think the success that Veradermics and others are having is really great. I think at first, it shows that -- there's a huge unmet medical need for androgenic alopecia and it effect over 80 million Americans, and there is treatment that's needed. And we see -- what we're doing is very synergistic, I think even with oral minoxidil, patients still aren't -- some patients aren't seeing the full hairy growth that they would like to see.

Additionally, with a lot of these medications, you have to take it once or twice daily. And if you have the potential to take 2 to 3 doses over 6 months and then have durable hair regrowth after that, we see that being very attractive assuming that you can reach the efficacy of oral minoxidil and so that's really where we see this as being a premium product, really being able to rejuvenate that hair follicle and get that durable hair regrowth. This is a brand-new novel mechanism for minoxidil finasteride. They've been around for a long time. And the biology that we've seen here, it does appear that prolactin is kind of furthest upstream really driving the hair loss. And you can see that in the ex vivo studies we've done.

And so overall, we think that this is a potential paradigm shifting assets here within AGA, but again, we're really excited that other companies such as Veradermics or having the success that they're having, because it does shed a light on how important this space is.

Add to what Sean said too, we saw that in our survey, right? We saw a very high level of interest in the target product profile for ABS-201 across the board for men and women. But when we segment out participants who have AGA who are currently using minoxidil -- oral minoxidil, the interest level goes up even higher. So we saw 92% of men, 89% of women who are currently using minoxidil so they would be highly inclined to go seek out the product.

So extremely or very likely to go to a health care professional to obtain ABS-201 is that we're on the market today. And I think what you're seeing there, a couple of things. One is the attractiveness of the TPP and the convenience and patients wanting something that's durable and convenience. And then also some dissatisfaction with standard of care, in particular, oral minoxidil because you really have to take that once a day, in some cases, twice a day to see the efficacy.

And then as Sean pointed out, they have taken very variable across patients. Some patients don't see much, some patients will see pretty decent efficacy. And then finally, there are some side effects with oral minoxidil as well, which some patients experience, including unwanted Hair growth and a shedding cycle that may happen when you first go on the drug. So I think if you roll it all together, I think the TPP here really resonates with the AGA community because it sort of checks off the boxes of being durable, very convenient to administer.

You kind of imagine us said it and forget it sort of solution. And we do believe long term in the market, there will be a significant number of patients who probably use both products.

[Operator Instructions] Our next question will come from the line of Gil Blum with Needham.

Maybe a bit of a math question. And you said 3 cohorts were dosed. Should we assume this is about 24 patients at this point. Ransi, do you want to take that?

Yes, I have to look at the actual math, but I don't think that's too far off

It's a rough ballpark there, Gil.

Yes. Okay. That's fair. I do have a question specifically for Dr. Ransi. Can you discuss some of the expected challenges in developing a drug for endometriosis, especially when assessing involvement of pain measures. It seems like you have the right experience here.

Yes, it's interesting because these are really pain studies and pain studies require a lot of thought in how you select your sites, how the patients are selected and how the placebos are mitigated. And so I've learned a lot over the last 3 years working in pain. And I don't know if this has been previously appreciated in endometriosis studies, but these are the things that I think about because in addition to treating the underlying biology, which we hope that ABS-201 will certainly do, we have to think about the end in mind, and at the end, these are new [indiscernible] rating scores. So we have to be extremely thoughtful in how we write the protocol, select our sites and then oversee the conduct of the trial.

And maybe a last 1 for Zach. How should we think about research allocation between AGA and endometriosis.

Yes. Thanks for the question, Gil. I think both opportunities are very significant. I think we talked about the unmet medical needs in endometriosis and really not much competition there. We also think the similar view applies to AGA, where this would be a completely new category of therapy. And so when we think about resource allocation, these are both programs where we think the potential ROI is very significant.

And then the other thing that these programs allow us to do is take advantage of a streamlined development path. So as Ransi noted, we'll be using this Phase I/IIa trial that's on running -- that's ongoing today for AGA, we'll use the SAD portion of that is safety to support initiating a Phase II trial in endometriosis later this year.

So we're leveraging the current trial to support moving into proof-of-concept studies in endo very rapidly. And I think 1 other comment I'll just make on the AGA trials is we're really excited there because those trials recruit very rapidly. So when we think ahead to registrational studies, we think about trials that can recruit very rapidly and it will be significantly less in terms of investment, invested capital to execute those than you would see for other traditional indications that would be for large market opportunities.

So I think if you look at these 2 together, and we look at these programs internally, we obviously have other things we can pursue, but these really stand out as unique opportunities. So we're really excited to pursue them.

[Operator Instructions] Our next question comes from line of Sean Laumann from Morgan Stanley.

Congrats on all the progress. I have a question back on the platform. And we do get a lot of inbound on potential AI crowding, if you like to call it that. But in the March deck, you emphasized origin-1 and the zero prior epitope design as key differentiators. Based on some of your 2025 interactions with potential partners, where does -- where do you see the strongest external validation of our platform relative to other AI-enabled discovery companies? And where is skepticism are still the most common.

Yes. So I would say, first off, pharma has very much embraced AI, and I think it's progressing faster than we have anticipated in some regards and then not as quickly in others. But overall, I would say, pharma's appetite on this. And whether it's partnering or building out internally is very strong. And I think the validations that we've been able to show in the preprint and kind of just the extensive validations towards the prior epitopes, I think has been some of the most rigorous work that has been published to date.

And I will note that a lot of these models are not being disclosed, whether it's within this industry or the LLMs and we disclosed the methods and how we went about doing that and we're now applying this to our internal pipeline to really be able to create differentiated assets. And I think with the emergence of genic AI, really being able to start to have this fully autonomous workflow, where you can have MN help you look at targets help you identify the epitope and then that feeds directly into the de novo model and then it helps you design the killer experiment and rapidly develop assets to quickly and rapidly test hypotheses. And so I would say that we're very excited about the the future and where things are at.

And yes, it's been an exciting start of the year.

Yes. I mean just to add to Sean's comments, when you look at the value of doing a platform deal versus doing an asset deal, the value on the asset deal is significantly higher, and you can risk adjust that and it's still a multiple. And so I think what we're really excited about is leveraging the Origin-1 models, which we've been working on for the past year to develop pipeline assets that we can either take forward or we can partner. And we have a number of those, which Sean mentioned that we're bringing towards DC this year that could become excellent candidates for partnering activity.

[Operator Instructions] Our next question will come from the line of Charles Wallace from H.C. Wainwright.

This is Charles on for RK. So a question on 201 and kind of distinguishing between how internally you're thinking about the market opportunity for the 2 different indications. I know you mentioned earlier that both indications probably be favorable, but maybe to dig a little more. You mentioned you provided a big sales of more than $4.5 billion in endometriosis for the 9 million patients. And then for the AGA, I think you're targeting 5 million to 9 million patients for a year.

So I'm just curious, should we assume that the endometriosis opportunity is going to be the larger opportunities because it's a therapeutic? Or is that maybe not the right assumption?

I think both of these indications are very large indications. I mean 1 in 10 women are estimated to have endometriosis worldwide, that's a very large population, most likely underdiagnosed due to poor standard of care and poor diagnostics in the space. And then obviously, AGA is a massive opportunity in a huge patient population as well 80 million Americans in the U.S. And so again, we see these as both very large opportunities. I think at the end of the day, I think AGA is likely a larger opportunity. But at the end of the day, these are both very exciting opportunities from just a market size perspective.

Okay. Great. And maybe just a follow-up. So given the endometriosis would be more of a therapeutic payer market, well, AGA would be a cosmetic kind of self-pay market. How do you kind of anticipate pricing would be once if those came to market? Would it be similar or different?

Yes, Zach, do you want to take that?

Yes. So we can't disclose what we think the actual price point will be. We wouldn't announce those until day of launch. But I can tell you in our own internal analysis, we think the pricing for both of them. And given that endometriosis will also have predicted to have insurance coverage, we don't think there'll be an arbitrage opportunity there. And so we think we're in a good position to leverage the development efficiencies of pursuing both indications with ABS-201.

Yes. And maybe before we close out the call today, I just wanted to share 1 exciting piece. Actually, I'll have Ransi share that to close out the earnings call today. Ransi, here over to you.

Yes. Thanks, Sean. As we said, the SAD MAD study is going well. We're on track. And in fact, we hope to dose our first MAD portion participants by towards the end of the week. So we were very pleased with the progress.

Thanks for that. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Welcome, everyone, to our Virtual Health Care Forum. My name is Scott Schoenhaus. I'm the health care tech analyst here at KeyBanc. Happy to have Absci join us for our fireside chat. We have Zach Jonasson, CFO; and Alex Kahn, VP of Investor Relations. Thank you both for joining.

I guess Zach and Alex, I'll pass the floor to you. Maybe give a brief high-level high-level background on Absci for anyone that's new to our fireside chat.

Sure. And first off, thanks for having us, Scott. We really appreciate it. I appreciate the opportunity to have the discussion. Zach Jonasson, I'm the CFO. I guess a quick high level on Absci. We're using generative AI to design antibody-based therapeutics. And we've been focused on this problem for the past 4 to 5 years, leveraging a lot of our own sort of lab-in-the-loop process to advance our model development. And I think what's really exciting about where we are today is, we're not just designing molecules in silico. We're not just making kits. We're actually making molecules that we're advancing into the clinic. And so we have a lead program, our flagship program today.

ABS-201 is an AI designed antibody targeting the prolactin receptor. We think it's got very good developability, very strong characteristics, good half-life and we are advancing that currently in a Phase I/IIa study in androgenetic alopecia patients, which we think is a fantastic market with a very significant commercial opportunity. And then later this year, we'll be advancing that molecule into a study in endometriosis a Phase II trial. Behind that program, we have other programs we've designed using our AI capabilities, including ABS-101 that's finishing a Phase I trial in support of a Phase I trial currently. And then we have a really interesting pipeline behind it, really focused heavily on difficult-to-target targets that are challenging for traditional technologies. And we'll be talking a lot more about those later this year, but you can think about targets like ion channels, GPCRs, you can think about multispecifics as well. And with that, I'm going to hand it over to Alex.

Thanks, great to be here. Hi everyone, Alex Khan, VP of Investor Relations for Absci. As Zach mentioned, we have a good number of catalysts coming up this year, namely around our ABS-201 program for androgenic alopecia and endometriosis. And just, yes, glad to be here.

Great. Zach, digging deeper into the 201, can we talk about -- we wrote a separate deep dive on this market opportunity. But maybe let's frame it up from how Absci is thinking about this. And for anyone that's new to the story, this is really a very big large commercial opportunity treating hair loss and endometriosis that affects millions of lives. Maybe talk about where you see that opportunity, how you monetize this opportunity, the next steps in the process.

Yes. I mean, look, I'll start by saying I've been in the industry for 25 years or more, and I've never seen an opportunity with at least from our perspective, an ROI that's this exciting. And that's in part because the market opportunity, we believe, is so large. This would be ABS-201, we believe would have for a new category of therapy in a market that's composed of 80 million Americans just if you're thinking about the U.S. alone, with a very poor standard of care with patients who are dissatisfied with standard of care. And the TPP that we think this program is going to enable is going to be one of high convenience, high efficacy and good durability. So think about a profile where you might have 3 injections over 6 months and then you would see another 2.5 to 3 years of durable efficacy following that administration profile. So sort of a set it and forget it, high convenience therapy.

And we think based on our own market research and surveys of consumers and KOLs that, that is a TPP that resonates significantly to this market and ingresses the needs of the patients and sort of directly addresses some of the weaknesses in standard of care. When we put that TPP into survey format, just looking at an efficacy that was something on the order of high end of oral minoxidil, but with that durability and that convenience, we see the potential for mass adoption. And in our own surveys are looking at the potential to treat 5 billion to 9 billion patients a year. And so you get to an opportunity set that could enable a TAM that's north of $20 billion, $25 billion in the U.S. alone. So a very exciting commercial opportunity.

And then on the other side of it, the development, the clinical development costs look to be much lower than you would see in typical indications, particularly indications that have sizable markets or sizable populations. So we believe, first off, we're conducting a Phase I/IIa trial right now. that will position us to go into registrational studies. So already right there, we're seeing a great amount of efficiency and speed and getting to a registrational trial.

And when we look at the registrational trials, we think those should recruit quickly. That's based on what we see others in the field have done and the fact that people suffering from AGA or hair loss, they're very motivated. So we think we'll enroll quickly. And our estimates right now, which are early, are that, that registrational campaign should be on the order of $100 million. So very much less than -- significantly lower than what you would see in IBD or other large indications. So when you put those 2 elements together, we see a trial -- clinical trial path that we can execute on. We've got measurable objective endpoints. We see speed of recruitment. We see lower cost of clinical development, and we see this very enormous market opportunity at the other side. And so really excited, and this is why we've prioritized this program. And I would say it's our flagship program at this point.

And Zach, remind us and the investors what we should be on the lookout for in terms of readouts over the next 12 months?

Yes, I'll let Alex, do you want to comment?

Yes. So as Zach mentioned, the ABS-101 program is currently in the Phase I/IIa headline trial, which we kicked off this past December, which is actually well ahead of schedule that we had originally anticipated. So right now, we're looking at in the first half of this year. We expect to report preliminary safety, tolerability and pharmacokinetic data from that trial. In the second half of the year, we'll expect to have an interim proof of concepts on that. So that would be hair growth at a 13-week time point. And then in early 2027, we'll look to have the full proof of concept that. So that will be the 26-week data for hair growth at that point.

And then what about the indications for endometriosis? Maybe I'll follow up with that.

Yes, I think we're excited to pursue endomitriosis as well. There's very strong mechanistic data supporting the prolactin mechanism, both in the formation of lesions as well as in nauseaceptors, so in the sensation that patients feel pain. And recently, there was a proof of concept from a competitor molecule, HMI-115. They published their Phase II study results showing the reduction in dysmenorrhea, which is that pain measurement at their high dose. And that's, we think, a very significant derisking event for this indication. And then again, it's another indication, Scott, where the standard of care is very poor. Patients use typical NSAIDs, which don't manage pain well enough. And they can go on a GnRH, but those have very significant side effects. You don't want to be on those for more than 6 months to a year.

So and it's also a place where you've got a significant number of patients. So it's estimated about 10% of women worldwide suffer from endometriosis. So it's a significant indication. We think the mechanistic data is there to derisked and then I'd add one other point is we've just brought on a CMO, which you may have seen in our press release last week. He, Ransi comes from Vertex, where he was involved in managing and running their pain trials. So I think we're really set up to execute well on the endometriosis studies, and we are planning to start the Phase II development there for endo in the fourth quarter of this year.

And as we kind of get to these sort of these readouts, both on the AB hair loss and the endometrial side, what are the -- how are you thinking about the monetization step Zach, at the [FO]?

Yes. I mean let's talk about AGA first because it's coming along the fastest. I would say there, we're really in a pretty advantageous position because we think this will be a new category therapy priced at a premium. And our go-to-market that we're thinking about today would be centered on going to market through practitioners. And so today, about 80% according to surveys of AGA consumers who get a hair therapy go to either a dermatologist, a medispa or a plastic surgeon. And those are prime market channels for us. And those practitioners are very incentivized to roll out and support a premium product like this. That comes from a lot of our interviews, KOL ad boards, and then just looking at the incentive structure today relative to some of the other oral or topicals.

So we think there's an active go-to-market there. And I should point out, too, there's about 30,000 of those locations across the U.S. today. So more of those than there are Starbucks. So we think there's a very good way to go to market as a premium product. Obviously, long term, we already have thoughts around how we could leverage this product into a direct-to-consumer play. But I think the initial go-to-market would be to focus on that --

establishing a premium brand and working with the clinicians.

Makes sense. Let's move on to ABS-101. So I think you guys recently shared some interim data showing extended half-life, encouraging safety. TL1A specifically has become a very competitive target. What attributes for 101 could differentiate itself in this competitive environment?

Yes. I think we mentioned in November, safety was looking good, and we were sort of looking at the interim time points in the trial. That Phase I trial is going to finish here in Q2. What we are seeing that's quite interesting is, as we mentioned, the half life is longer than first gen. It doesn't look to be as long as a couple of the second-gen molecules. But what we are seeing, it's quite interesting is it looks like we have much better tissue distribution and bioavailability particularly as compared to the first generation. So our focus there is not to develop that asset further in the clinic for IBD.

We want to focus our resources on ABS-201 where we think the ROI is much more substantial, less competition, higher patient need and overall, a larger market. What we are going to look to do with ABS-101 is to look to partner that or find a partner. And right now, we're exploring some first-in-class indications where we think potentially that better tissue distribution could be leveraged.

Let's talk about AI. So maybe talk about how you're deploying AI on your platform. What you're seeing from a client interest, large pharma, biotech how they're deploying AI. Has it increased the inbounds to your platform? But let's first start about how you are deploying AI and how you have been deploying II and all the data sets that you've been accumulating as part of your platform?

Yes. Look, I mean, Scott, I think what is really exciting for us is we run an active learning cycle. So we have a lab-in-the-loop process, and we've been running from that for about 5 years. And that's really how we've been able to make gains in our model performance. And when I say model performance, I'm speaking about generalizability and accuracy. And I think one of the things you saw with our recent Origin-1 release. We released a preprint. We'll be looking to actually publish that in a journal. But one of the things that you'll see with that is we focused our platform on difficult to challenge targets and what we call 0 prior epitopes.

So we're basically moving our platform in a direction where we can create differentiated assets. So we can target or address targets that aren't well addressed, or can't be addressed very well by traditional approaches or even at all. So things like ion channels, GPCRs, agonism. And then we're also making sure that our platform is not just delivering variable quality hits, which is I think where a lot of the focus of preprints have been. We're laser-focused on having the platform deliver lead quality candidates that we can take into preclinical development into in vivo studies and into development ultimately.

And so when we map all of that together, Scott, I would say our focus is because our platform has matured enough is really using it to design assets that either we take forward like ABS-201 or that we can partner. And the partnering dollars and economics around an asset deal versus a platform deal are fundamentally different. We're looking to make 10x gains on the kinds of transactions we can do by leveraging the platform for asset creation.

And then maybe talk about your data and the moats around it and how you've built around your proprietary date sets, Zach?

Yes, look, it comes back to the lab-in-the-loop process, right? So it's this test, this design test cycle that we run. So when we make designs out of the model, we can rapidly test those in the wet lab. And we have a number of display technologies to look at binding and affinity to the specific epitope we're designing to. We have all sorts of other assays to look at developability and then -- and so when you put all that together in the sort of active learning cycle, that's why we're making these advances in the model where we can, a, design against challenging targets or epitopes with no known ligands.

And b, we can design antibodies that are of high quality, meaning that they are lead quality candidate. They have high developability. We know they're stable, you can formulate them. They're soluble and that they actually bind to the epitope of interest. And so that's what's really -- that's where you see the step function changes. And just to give you an example, with the Origin-1 model, we're already deploying internally Origin-2, and we're seeing significant advances in the ability of these models to not only make the best designs but also to create diversity. And then to be able to select and prioritize those designs that are going to be the best in terms of those parameters I just mentioned, developability, affinity and selectivity to the target. And that's what goes into making a true asset, right, that you can take into development or to partner.

Yes. And that leads me to my next question. How you Zach, talk about how you decide whether to partner out with pharma or continue developing the drug in your own pipeline? What leads you to all the factors to decide that?

Yes, it's a great question, Scott. So we look at a number of factors, one of which is what is the cost of us developing it clinically, right? And so when you look at a program like ABS-201 and AGA, those costs, as I mentioned, are much lower than you would typically see in a large -- especially for a large indication. So that's very attractive. The other thing is how manageable is the clinical development. And again, I'll use AGA as an example. There, you have an objective endpoint. You're looking at terminal area hair count. Other indications can be a lot more squishy on the end points and so that's also one that ranks very high for us to look at for internal development.

So can we execute the trials when you execute them relatively quickly? And is there a very large market opportunity on the other side and then the cost of development is relatively low. We look at those factors when making that decision. Now it doesn't mean we won't design antibodies to targets that could enable very large indications that are more expensive to develop in or more challenging. It just means when we design those, we're really designing those with the idea that we're going to partner those.

And speaking of costs, maybe, Zach, it's a helpful reminder for investors. Talk about your balance sheet, how much cash you have and how far that extends your clinical programs out?

Yes. So we'll have earnings next week. But in January, we did provide an update, an estimated end of year cash, which was around $140 million, $143 million. And that gives us a runway into the first half of 2028. And importantly, it gives us runway to achieve the execution of ABS-201 and AGA, both the interim and the final readout. And that allows us to begin execution of that Phase II endometriosis study with an expected interim readout within that time frame as well.

Great. Let's play a blue sky scenario, say you get the most exceptional readouts on 201 both for hair loss and endometriosis. And what would be the logical next steps? Or how would you think about the optionality on that going forward? Would it, I guess my question is, does it make it more attractive to double down and maybe, again, use more of your capital to really accelerate those programs? I'm just trying to walk through all the steps if we get these exceptional readouts on 201, how does it -- what are the optionalities here in your mind?

I think we'll certainly have inbound partnering interest. We already do. But our plan of record, and again, we come back to the points we're just talking about how do we decide on something we need to develop internally. If we look at the AGA indication just because it's the lead indication, you look at ability to exceed on those trials, the fact that there's objective endpoints, the fact that the trial costs are relatively low for registrational trials. Our plan of record is going to be to develop that asset. We think the ROI is phenomenal. And like I said, at the onset, I've been in the industry for a long time. I haven't seen a potential ROI.

You look -- there's risk with everything, but I haven't seen a potential ROI that's significant in any program I've ever worked on. And so I think our plan of record is to make sure we execute clinical development and prepare for commercialization. And I think a good signal to the market along those lines is us bringing on Ransi as the CMO last week and the depth of experience he brings on clinical trial strategy and execution.

Yes. No, that's an important point. When we think about Absci beyond 201 and maybe the next 5 years, how should we think about the platform broadly? Is it more about going after these big market opportunities where you think there's relatively lower cost in the clinic and faster performance? Yes, how do you think about outside 5 years from now?

Yes. I mean, so putting aside the lead programs, which we intend to develop, I think there's every indication if we're successful, that we could take those to market. And in fact, I talked about the speed of the AGA design. We could, if we execute on the plan, and we're having some FDA feedback on this now, we could be in line for a potential approval 2030 for AGA. So then we would be engaged in commercializing that program. But looking backwards into the pipeline, we'd be building, which I think is kind of where you were going. What we're focused on today is really, look, Origin-1 publication gave you a little bit of a preview to it, right?

We want to focus on designing differentiated assets. We don't want to design an asset to an easy target that you could reach with a traditional platform. You're inviting 10 companies in China to compete with you. What we want to do is focus on these opportunities where either we have a competitive advantage in the target biology such as prolactin and we think there are other indications where prolactin is going to be important, or we want to focus on targets where they are difficult to address with traditional technologies, and we can do something fundamentally differentiated with the platform, and that fit into indications where there's a large unmet medical need where that differentiation is really going to make a big difference to patients. That's the mapping we do.

So I think what you'll see over the next several years is we're developing this pipeline of those types of differentiated assets because that's where the platform is today and the platform is going to improve over that time as well. And we're going to be selectively developing some of those into the clinic, and we're going to be selectively partnering some of those to large pharma.

And I should point out, the partnering strategy on the assets, as I mentioned, the economics there much more favorable than platform deals is why we're focused there. But the reason why we would partner assets is to basically recycle that capital into development of other programs that we're doing internally.

And maybe that's a good point, Zach. And maybe talk about how the unit economics have changed over the course of these years on these partnered programs. And to me, it's a testament to your platform, but maybe talk about like how the economics have changed when you sign these deals, if they have. I mean my sense is that royalties and milestone negotiations have accelerated for the space in general. And I think it's validating to all these platforms.

Yes. We don't really see much movement in the platform deal structure in terms of the -- if you look at a per target basis, if anything, probably going down and I think that's in large part because there's now a lot of SaaS offerings that are trying to come in. And really, those platforms are more about, can we be a hit generator and that's where I'm pointing out our differentiation is we're not focused on generating hits. We want to focus on delivering lead candidates because that's where the value is. But the other thing that's quite interesting, and we've done our own analysis internally on this.

The 2 points. One is the upfront payments for programs. So whether you're looking at DC, Phase I validated, Phase II validated have gone up over the last 5 years. There's a much more premium from pharma on assets that they've won that are in indications that they're interested in. So that's a good barometer. I think the second point is, if you can deliver differentiated assets, the potential economics upfront and back-end on asset deals get to be very high because there's a distribution there. And so our focus is, can we develop assets, design and develop assets that are going to be on that right or part of the tail of that distribution, and you do that by creating differentiated programs that can be first-in-class and that's where we're focused.

Great. Well, Zach, Alex, thank you so much for doing this fireside chat.

Investors, if you have any other questions or want to follow up with them, please don't hesitate to reach out to me directly. But thank you both.

Welcome back, everyone, to the next session of this first day of the Leerink Partners Global Healthcare Conference here in Miami. As I said before, happy to be hosting you guys in my adopted hometown. I hope everybody enjoyed [indiscernible] this morning. It's ready. It's a little bit early, but not that early anymore. I'm lucky for this session to be hosting the team from Absci back. Alex, how are we doing?

Doing well. Happy to be in Miami.

Happy to have you guys. All are welcome. So for those a little less familiar with Absci, can you give us a very quick overview or less quick, if you'd like, of the platform and where we are in terms of clinical products arriving out of it because you're in a very interesting inflection point in the company.

Yes, sure. And I have a bit of a perspective here. I'm the Chief Financial Officer and the CBO for almost 3 years, but -- for over 10 years prior to that, I was involved with the company as an adviser, an investor when I managed a venture firm, a Board member and then really couldn't resist the gravitational pull as we moved into generating our own assets. But at a high level, we're using AI internally. We create data, we test our models, and we're using our AI engine to generate differentiated assets. And what do I mean by differentiated? We're really laser-focused on our efforts to generate assets against targets that are unaddressable or challenging for traditional methods.

So we're talking about GPCRs, ion channels, creating agonism on certain types of targets where that's challenging. And that's our focus. And we just released a manuscript here in January on our Origin-1 model, showing the ability to design against these types of epitopes, these what we call 0 prior epitopes. There's no reference binder in the literature. They're on difficult targets. And if you look like a layer below that in our early pipeline, which we'll be announcing more about later this year, you'll see assets that are targeting these types of targets. So very differentiated, we think it will be well positioned for partnering. On the other side of the coin, we're developing our own internal pipeline as well using that platform.

And our flagship program is ABS-201, as you know, which we're developing in AGA or androgenetic alopecia as well as endometriosis. And we're selectively choosing which programs to take forward. And I think that AGA program, which we'll talk about more, is very unique in terms of its potential ROI given the size of the market and the low cost of development. So it's a really great place to allocate our resources.

So this is not a video. So the audience won't appreciate how much more personal experience I have with AGA than you guys but you'll have to take my word on it -- word for it. So let's talk a little bit about that market, the present therapies that are available and how you see yourselves fitting in with a very different MOA.

Yes. So I mean just to level set, androgenetic alopecia is just common hair loss, pattern hair loss that affects about 80 million people in the U.S. and even more globally. And when you think about the standard of care today, it's things like minoxidil, finasteride, which are Rogaine, Propecia, things like that. And the standard of care is really lacking in terms of efficacy, convenience and sometimes safety and adherence is a big issue, too. And we'll talk to a lot of practicing dermatologists and clinics will tell us that even when they do try to prescribe these kinds of things, adherence is a big issue if you're trying to take a pill or a topical once or twice a day, even if you're someone who does have an actual effect on it, which a lot of people don't actually see that effect.

And what the dermatologists will tell us, too, is that the patients are highly dissatisfied with these options and the ones that do try to take them, oftentimes will fall off after a certain point. And the patients that are seeing are coming in more and more asking about hair and then also skewing younger and younger. So the market is really ripe for something that can be potentially a game changer if it has a better effect on efficacy, convenience, durability and safety, which is something that we think the ABS-201 product could fit into.

And just to summarize that, there's really 2 categories of therapy today. Either you're doing a daily or twice daily topical or oral and they all have side effects. They have great variability in how well or if they even work at all or you can go with a hair transplant, which is very invasive, painful, very expensive. But even if you do a hair transplant, you have to take the maintenance therapy of an oral or a topical. And so what we're looking at with ABS-201 is a completely new category where you could have an administration, a simple subcu injection, maybe 3 times every 6 months and be able to set it and forget it and have durable long-lasting hair growth over multiple years. There's nothing like that in the market, brand-new category. When we test it with patients, there's a significant amount of interest in that.

So I think one of the conversations that we have with people who are a little less familiar with underlying biology is there's a little bit of head scratching about where prolactin fits into the biological pathway towards hair loss. Can you walk us through a little bit of the mechanistic rationale here?

Yes. it's really exciting. Most people think of prolactin as an endocrine hormone systemic. And if you really look into the literature, you'll see that quite a while ago, it's been covered that's actually in addition to being an endocrine hormone, it's also secreted locally and regulated locally in the peripheral tissue. And it's run off of a distinct promoter that's dopamine independent. And so what we see when we look into the hair follicle biology is we see prolactin really driving hair miniaturization. So really pushing follicles into an antigen or a catagen phase, which is regression and over time, diminishing that cell -- the stem cell compartment.

And we recently did a study with Professor Paus who's actually based at the University of Miami. He's a world expert in hair biology, hair follicle biology where we looked at taking ex vivo biopsies from patients, multiple hair follicles, treating those with a control with our antibody, which is blocking the prolactin signaling as well as introducing exogenous prolactin to really flood the system with prolactin and then doing a rescue where we do our antibody plus exogenous prolactin. Long story short is what we found in that study is not only does blocking prolactin with our antibody produce or push the follicles into the antigen or growth phase, it upregulates all the growth factors we wanted to see IGF-1, FGF-7, for example, and it replenishes that stem cell compartment as well as the progenitor cells. And we think that stem cell component is what's really driving this long-term durable effect, and that's an effect that's been seen in NHP studies.

So I think one of the questions we're going to ask because we have data coming soon, and we'll talk about that timing momentarily. One of the questions investors are going to ask is what to look for in this relatively early data set? And how to think about this quantitatively, evaluating where it fits, how great the effect size is? And help us level set on where that is versus competitors.

Yes, it's a great question. So when we talk to KOLs and talk to patients, if we achieve anything commensurate with even topical minoxidil, there's a nice product there. But our aim is really to have something that's at least as good as the high end of minoxidil in an effect size. So that's where we're looking to see results at 26 weeks in our study, but with a durable component on that simple administration profile, 3 injections, for example. That's a home run product. We think when we test that with consumers, that's a TAM that's north of $25 billion. So as we look across this year, in the first half, we're going to release some top line data around safety and PK. We think this mechanism is abundantly safe and we can have a whole discussion about that.

And then in the second half, we'll have a 13-week interim readout. And in that readout, we're looking to see a signal that's showing that we're moving in the right direction because we expect to see the full effect at 26 weeks. And when I say effect, the nice thing here with FDA is you're really looking at an objective measurement, which is target area hair count. So you're measuring in a square centimeter on the patient's head in the transition zone between where there's hair and where there's quite a bit of balding, you're measuring from baseline the amount of new hair growth that's there. And so that's a quantitative measure. It's done in all the AGA studies. So we'll do that measurement at 13 weeks as well as at 26 weeks. And I think also interesting, we're looking at a couple of secondary exploratory endpoints that we think are commercially interesting as well, one of which is the restoration of pigmentation.

And we think that's a whole other market in and to itself, and we've seen that result in NHP studies where you treat monkeys that have natural balding and you see the hair regrowth, but you also see the return of the pigmentation. And we saw that in our ex vivo study, where we saw promotion of melanocytes and increased melanin production. So we're going to be looking for that as well in the trial.

Let's talk a little bit about the other side of this asset. We're going to bounce back and forth, that's okay. So the other application that you're looking to for the same asset is endometriosis, one of the larger unmet needs in women's health, obviously, a source of a lot of misery. Talk about that opportunity, how you see the opportunities in that disease. Obviously, it's a very different clinical development path. So just walk us through the strategy there and how you plan to balance the two.

Yes. I mean it's interesting because our research team when they were at Bayer actually were working on prolactin inhibition for endometriosis. And there's a rich literature in animal studies showing that prolactin signaling is -- or expression of prolactin is upregulated in the lesion formation, but also in the nociceptor so pain sensitization. So dual mechanism there and there's quite a bit of animal work there. We've done our own animal studies as well with a collaborator in Valencia that shows the increase of pain sensitization. So there's quite a bit of underlying biology that really points out the role of prolactin in that disease pathology. So our focus there is to start a Phase II trial in Q4 of this year. The primary endpoint is likely going to be focused on pain, so dysmenorrhea.

And we think that there's quite a bit of proof of concept there. There's a competitor molecule that our team at Bayer worked on when they were at Bayer that just put out results from a Phase II study in endometriosis and showed a significant reduction in dysmenorrhea at the high dose. So we think there's quite a bit of derisking around that program. And so we'll be looking to advance that starting in Q4. And I think one other thing I would mention there is we just announced the addition of a new CMO to Absci, a former VP -- SVP of Clinical at Vertex, who has direct experience running pain trials. So we think we're really set up to execute that trial well.

Let's talk about the right patients for that drug. Endometriosis is certainly a highly variable disease. There's surgical approaches. They often result in an outcome that's not that much better than what you started, maybe worse, depending on the adhesions you get. Who is the right patient to at least early on the study in the endometriosis spectrum?

It's a great question. We had a KOL meeting in January focused explicitly on that question. We'll be having a pre-IND meeting with the FDA here pretty shortly, exploring our views on that. But I would say, at a high level, we want to find patients that have the right amount of baseline pain because at the end of the day, the primary is going to be a pain reduction endpoint so we need to make sure that we're bringing in patients with the right amount of pain. We are actively looking at how we diagnose the patients coming into the trial. As you may have seen, the new guidelines are really much more focused on clinical diagnosis, but there is an imaging component. Sometimes imaging misses superficial endometriosis, which we do not want to miss. And then there's always surgical confirmation. So we're looking at entrance requirements, but -- and I think we'll announce more about the trial design later this year. But I would say our North Star is to make sure we get patients that have the right type of pain profile to come into the trial.

On what time horizon will be getting that clarity? Just as we think about the sort of the tempo of that data, AGA, what are we getting when? And sort of which questions are we answering what time horizon?

Yes. Yes. I mean if you look out over the next 18, 24 months, as Zach mentioned, the first half of this year, we do expect to have some safety tolerability and PK data for the AGA trial that's currently ongoing. It's a Phase I/IIa headline trial that kicked off in Australia this past December. In the second half of this year, that's when we would have the 13-week interim efficacy readout that Zach mentioned, looking into the end of the year in Q4, kick off the Phase II for endometriosis and then into 2027, have the 26-week readout for the AGA hair growth. And then finally, later in the year, second half of ' 27, the Phase II interim efficacy readout for endometriosis. So really in this next 24 months, having those 2 Phase II readouts on the horizon.

And talk to me a little bit before we go diving back into details about, talk about where you guys are on OpEx, where you guys are on balance sheet, cash burn position, where do we get relative to the data sets based upon where you are on your runway and the assumptions baked into that, of course.

Yes. So I think at the beginning of the year, we announced our balance sheet at roughly $143 million, which gives us runway into the first half of 2028. So that would bring us through the full readout on AGA as well as an interim readout on endometriosis within that runway. In parallel to investments in those programs, we are generating assets out of the platform with the goal of partnering those assets. And we think that the value created by partnering even early-stage assets is much more significant than doing platform deals. So we'll be focused on looking for partners for a number of assets over the course of this year, and we'll announce some more about some of our pipeline programs.

And then I guess you mentioned -- in OpEx, too. One other thing I'll mention is we're consistently finding ways to cut our OpEx spending. And you saw that probably starting in July, we did some reorganization of the company. We'll be continuing to look at ways to do that, including by using some more agentic approaches. We're actively building agentic AI workflows at Absci today and piloting and validating those. So we expect to see significant savings from those over the course of this year as well.

That's helpful. I want to dive back into the pipeline here and talk about how to balance 2 very different product profiles. The analogy that I've heard in the past from other investors is well, Botox once upon a time was a really severe migraine drug, and now it's used for other purposes, including in the city that we're in right now. There is some being used somewhere, I'm sure. So talk a little bit about how that influences the development of both. I know we talked about it earlier, how that influence the development plan for each of 2 indications, how they inform one another? And to what extent are they almost a little bit separate?

Yes. I'm going to even go a step higher, which is we think there are other interesting indications for prolactin, and we're bringing along other molecules early in the pipeline as we think through some of those. But you're right, the 2 -- these 2 indications are very different in some key ways. For AGA, that's a mass market drug. It's going to be cash pay. We think it's going to be very well priced if we hit anywhere close to our TPP based on the consumer research we've done.

We think that it'd be more like north of a $25 billion TAM in the U.S. just for the AGA indication, which is why we're allocating resources to that. For endometriosis, as you mentioned, it's overlooked. There's nothing disease-modifying in that space. GnRHs have some pretty negative side effects that prevent them from being used for more than 12 months typically. So we think that market is multibillion dollar as well, but that's going to be a very different clinical reimbursement path.

So I guess the question becomes, is it -- strategically, how do you consider the possibility between applying using the same construct/product both versus for the interest of price, dosing and development discrimination using a separate one of the follow-on assets for one asset or the other? And how do you think about that?

Yes. So we -- that's an active discussion internally. Right now, when we look at using ABS-201 for both indications, we feel like there's a pathway to do that in part because of how we think AGA will be priced. And obviously, with endo, you'd be looking at insured cost. So you'd be looking at what payers are going to support and what the out-of-pocket would be to a patient. But we think that, that's a viable path. And they'll have different dosing, different formulations. All of that will be worked out as we move forward in the endometriosis studies. So that's one angle. There is also the option of bringing a backup molecule in and doing a bridging study.

That's something that we've looked at and continue to look at. The other thing I have to mention because it sort of gets to the platform, and we're excited about this. We really believe in this prolactin mechanism for a number of indications. So in addition to backup molecules, we're using our platform to try to generate a lot of IP across compositions because we can create thousands and thousands of designs that we're validating in the wet lab at scale. And so you can look in the future to see very robust IP coming out from us around the prolactin target.

So there has been a -- moving to competitive data, et cetera. There has been attempts to use prolactin in the past. There was some data produced by a Chinese competitor, mainland Chinese competitor. How do you think about that construct versus yours, that approach versus what you're doing -- what lessons have you learned from that data set?

Yes. I mean, honestly, I should thank that company. They've done a lot of derisking for us. That molecule, Hope Medicines molecule, I think you're referring to is actually the molecule that Bayer initially developed and discovered. And our team at Absci, some of our team worked on that program. So we have a lot of institutional knowledge of that molecule. And I'd say when we started working on prolactin, we had a view to the amazing applications for it as well as the weaknesses of that molecule. And we used our platform to address those weaknesses. And first off, that molecule is very low half-life. It's a 2-week half-life. So we've engineered an HLE mutation to ensure we have a long half-life drug, which is very important for the AGA market.

You don't want to be dosing too often. So 2 to 3 doses over 6 months is a winning profile. 24 doses, which is what would be required with that HMI molecule, not a winning profile. The second, which gets to the same point is we can formulate our molecule at a high concentration. We have a 200 mg per ml formulation going into the MAD component of the Phase I/IIa study that's ongoing. That Bayer hope molecule looks like it can only be formulated up to 60 or 70 mg per ml. So very limiting in terms of the administration and convenience for patients. We've introduced higher affinity as well, which is important when we think about receptor occupancy. If you put all those variables I just mentioned together, including affinity. We think the receptor occupancy here is going to be key to driving efficacy in AGA. And then finally, I would say we have -- we think we'll have terrific patent life. We're just prosecuting our patents now. Those initial Bayer patents are going to expire here around 2032. There's more, but I'll stop there.

Yes. Well, I just -- it's almost as if you prepared for that question.

We thought a lot about it, and it really guided what we were doing internally when we worked on this target.

That makes sense to me. So as you think about other indications for this target, should we think of this as a target that has an AGA application and then broadly speaking, a group of mostly women's health and hormone dysfunction applications. Is that the wrong way to think about this?

Yes, it's a little bit the wrong way.

I'm wrong all the time. You can tell me that every day.

I think when we look at prolactin, particularly peripheral, so we have to change the mindset of looking at systemic and look at the peripheral prolactin in different tissues where it's regulated independent from the pituitary. And there, we see quite a few I&I applications for the drug or for the target. And one thing I love about the target is that we think it's abundantly safe. There are humans walking around with lots of function mutations who are perfectly healthy, have good hair. The only thing that they present with is the inability to lactate. And so we think it's a very safe target. But if you really start looking in the literature, and we're doing some more experiments internally, including with the collaborators in human tissue, there are quite a few I&I indications where prolactin is highly implicated.

So that does create some complexity into the development path going forward. Is it reasonable to assume that further I&I implications will probably be a home for follow-on assets?

Yes. Absolutely. And that's the way we're thinking about the follow-on assets we're creating.

And that's mostly a function of price -- price and dose is that a discrimination.

Absolutely.

So you talked about the global and U.S. TAM opportunity in AGA. I want to pivot back. One of the questions around development globally is what data do you need? How integrated is the regulatory path globally versus the U.S.? And try to give a sense of the development costs because there haven't been a lot of studies recently in this space. Talk about what development cost looks like U.S., EU, et cetera, rest of world.

So I'm going to focus on the U.S. We've done a lot of homework there. We have a trial design for the registrational studies as well, which we'll be talking to the FDA about here shortly. For rest of world, I won't speak too much about that. It's something we're evaluating now, but it's also an area where we may seek a commercialization partner to be involved in some of the later development. But in the U.S., what I would say is -- this is a very -- I'm going to put on my CEO hat or trousers or whatever you want to say. It's a very attractive ROI for a couple of reasons. We talked a little bit about the market size. This is a new category in a market that's 80 million patients that are dissatisfied with standard of care.

But the 2 pieces that I think maybe sometimes investors don't appreciate is, one, the speed of conducting trials in this market and the cost are very different than traditional indications. So right now, we're doing a Phase I/II combined that's going to read out here -- final readout in early '27, and that will position us for registrational studies. We think we could be in line for an approval circa 2030. And if you look at the speed of recruiting for these trials, very rapid. We think there'll be waitlist for the registrational studies. And then the cost, the cost is -- we think the cost for registrational studies will be well under $100 million. So when you look at that compared to oncology or ABD, you factor in speed and cost, it's a very attractive ROI. It's a very unique type of program in biotech. I've never seen an ROI like this on any program I've ever been involved with.

And transitioning to what kind of commercial infrastructure would be needed. How should we presume -- presuming this program move as quickly as you suggest, and we've seen that in these indications before, by the way, the sort of aesthetics cash pay market is not a place for companies that typically have a headcount that looks like Absci if I may say so. How do you think about that opportunity set? Is that something that belongs to a partner? Is that something that needs to be geographically chopped up? Or is that so far out that you haven't -- that that's not a real part of the planning right now?

We've done some preliminary planning, and we have big advice from quite a few ex Allergan executives. We'll be bringing on a Chief Commercial Officer, I think, later this year. But I would say at the high level, the way we think about the market is the initial go-to-market should be through practitioners because we want to establish this as a premium product, new category. It's also very well aligned with derms, plastic surgeons and med spa. And that's over 30,000 locations in the U.S. alone. This is a perfect product fit for them. And there's good economic incentive tied to this versus a minoxidil kind of play. So we think that's the go-to-market. And then the infrastructure to support that, we don't think is going to be as significant as it would be for a typical drug, particularly this revenue potential because we think we can drive a lot of interest through social media, other advertising into that practitioner network.

Patients are looking for solutions already. It's not like we have to go find these patients and they self-diagnose every morning in the mirror. So there's a ready population, ready demand there. So our view is we'll build a commercialization and the sales force, but it's going to be heavily focused at pushing consumers into those derm offices.

Great. That makes sense to me. We're running down the end of our time. Looking forward to seeing that data throughout the year.

Yes, we are, too. We're excited.

It's going to be fun for you guys.

All right. Okay. Awesome.

Good morning, everybody. Thanks for coming. Welcome to the first day of TD Cowen's 46th Annual Healthcare Conference. It's great to see everybody. We've got a packed line up the next 3 days, so I know we're just buckling in here. But it's my distinct pleasure to be joined on stage today by a couple of titans of the AI industry these days.

So to my left is the CEO of Absci, Sean McClain McLean. And to his left is the CFO and CEO of Absci, Zach Jonasson. Thank you guys for joining.

Thank you.

Awesome. So there's no shortage of things to unpack here today. So we're just going to get dive right in, right? But we do want to try to keep it as interactive as possible. So if you guys have any questions or anything, feel free to go ahead and flag me or can send me an e-mail, [email protected].

And then we'll I'll be checking my phone throughout. But maybe, Sean, let's just -- before we go into the individual programs and kind of the outlook for the year, let's just start high level with where Absci's platform is today. So maybe what do you kind of see March 2026 is really the primary points of differentiation for how you all are leveraging AI for what you do?

Yes. So first off, we are a clinical stage AI drug discovery company. So we've been at this for a little bit of time now, and it is exciting to start to go into this new era. I think we see new models being developed day in and day out. But what really matters at the end of the day is the assets that you have in the clinic and what those readouts are ultimately going to be. And I think one of the things that we're really excited about now, especially on the early drug discovery side is actually the agentic AI. I think what we've been able to see on the de novo side is being able to rapidly use our de novo model to design drugs to what we call zero prior epitopes or epitopes that haven't been drugged before.

We can do this very rapidly going after hard-to-drug targets. But what really does matter is getting the target right. It doesn't matter how well you design a drug to a particular target. If you don't get that target right, it doesn't really matter. And so what we're seeing with a lot of the new agentic AI is being able to integrate that into the early-stage workflow. And I think within the next, call it, 1.5 years to 2 years, I think you're going to start to see these workflows where you're able to have AI actually pick really exciting new novel targets for you, pick the epitope and then have the model design the antibody towards that and then design the killer experiment to actually validate that particular pathway and target for you and just be able to, in a very autonomous manner, be able to rapidly validate new novel mechanisms and targets. And so it's a really exciting new frontier.

So it's like developing frontier models within biology, but then being able to leverage the agentic AI. And I think that, that's going to allow you to rapidly scale. I mean the way we're seeing it, it's completely transformational, and it's a really, really exciting time that we're in right now.

Yes. So I think when we talk about value creation for -- just from the -- aside angle, right? Because I think a lot of these AI drug discovery players in the space are still, in some respects, figuring out what's the best way to drive long-term value creation, right, whether that's be an engine for the sector, build out their own internal pipeline, some mix of both, software licenses anywhere in between there, right?

So when it comes to the pipeline, what is Absci's kind of North Star when it comes to long-term value creation strategy? Is it really -- do you see kind of a fully mature company largely coming from internally developed drugs that's driving pipeline? Is it a mix of platform itself with external partnerships? Where does it kind of stand for 2026?

Yes. So at the end of the day, the value is in the asset itself. That's where you're going to get the long-term sustainable value creation. But the platform is absolutely critical to being able to drive that value creation. And I think if you look at where everything is headed actually, to give an anecdote, there's a new AI scientist paper that came out. And actually, Zach and he can give you the details on it, use some of the agentic AI and was able to rebuild it in 20 minutes.

And I mean that's truly incredible and just how rapidly you were able to reconstruct a model. And now if everyone has the capability of doing that and new models are constantly coming out, I think it's hard in this industry to have a SaaS business model or a business model that's solely focused on selling your platform as a service. And I think that's where really being able to make sure that you get the right target selected. And I think prolactin receptor is a perfect example of that. I think some of the earlier-stage autoimmune and I&I pipeline we're building out really is able to show that. And it's about how quickly can you get to those new exciting targets with AI and how can you use AI to unlock some of these differentiated biology that's out there.

So maybe that's kind of a perfect segue into 201, right? So let's kind of unpack this a little bit. So maybe let's start with where you guys see what's the primary value case for -- this is ABS-201, this is prolactin receptor antibody within androgenic alopecia. Maybe how big is this market? And where do you really see the unmet need that this particular asset could address?

I'm very excited about prolactin receptor in many indications, but squarely in hair regrowth or androgenic alopecia. I think you're seeing this exciting trend shift towards out-of-pocket. You see it with the GLP-1s, shifting towards preventative care. And this falls squarely in that category. I think last year, more than half of Lilly's new customers that were brought on were from Lilly direct out-of-pocket. And what we're seeing is the consumer wants this total vitality. They want their weight. They want their hair, they want their wrinkles removed. And the demand is very high for being able to regrow your hair. And there currently aren't mechanisms that fully allow you to get that hair back. And what we show prolactin receptor, it's this master regulatory switch for hair regrowth. And as you age, the more stress you have, the faster your hair grades and falls out or I should say, miniaturizes. And what we've been able to show in ex vivo samples with a world-round hair expert, Professor Ralph Paws was that you're able to regrow the stem cells within that niche, which enables you to regrow the hair or reminiaturize or reverse the miniaturization. And so we think that this is a really new kind of exciting frontier. And it truly is actually regenerative.

Post therapy, what we saw in stem cell macks was the ability to regrow hair up to 4 years post treatment. So we think that this could be a durable treatment that's able to give potentially superior efficacy. And so yes, it's a really exciting opportunity.

I add something to that, too. If you zoom out a little bit, the ROI on this program is phenomenal, right? We just went through an LRP with our Board. And it's really 3 things that make this exceptional versus, I think, any other type of indication you might look at.

One is the market opportunity is huge. So Sean mentioned this would be a brand-new category of therapy. In our market research, it suggests this is something patients are going to love. They're going to seek to adopt and they're going to be willing to pay a premium for. So we think the TAM in the U.S. alone could be north of $25 billion. So the market is there, it's massive. But if you look into the cost of development, point number two, it's really de minimis compared to typical therapeutic indications.

We believe we can do the registrational studies for under $100 million. That would be unheard of for IBD or oncology. So very inexpensive development for a large market. And then the third part of this is speed. These trials, we're recruiting a trial now. We're going to recruit over about 230 patients in this trial. But when we get to the registrational studies, those are going to go extremely quickly, we believe, as well. The KOLs tell us there'll be waitlist to get in the trials, and we think we could be in line for an approval of circa 2030. So a very rapid, efficient development path for a massive indication.

So you're talking about $25 billion TAM or so. So I think I've seen the numbers throw out maybe 80 million, 90 million patients or something like that addressable in the U.S. alone. I guess, can you give us what -- like what proportion of patients are seeking treatment today? And I guess, are you envisioning that 201 would capture a lot of the folks who are already coming in for this kind of treatment, expand the proportion or pool of folks who would consider something like that or both?

Both. And we saw that and we've done KOL studies. We've done interviews with patients and then we commissioned a consumer research survey, 610 patients. And what we saw is there are a lot of patients who just stay on the sidelines. They don't want to use standard of care or they've tried it and they don't like it. They don't want to be on Minoxidil for the rest of their life, taking it every day. And then we also saw patients that are currently on therapy, whether it's Minoxidil or they're going in office, their interest level was even higher than the average patient.

So we think this is going to be used. It's going to expand the market. It's also going to bring in a lot of patients that are currently using standard of care. And we actually don't think this is competitive with a lot of standard of care therapies like Minoxidil. We think patients are probably going to use them in combination.

Okay. So when you look at -- when you're talking about the patients who are on Minoxidil who have tried it somewhere around there who, for whatever reason, want something else or are no longer testing it out. I guess, what is it about the data you've seen with 201 so far that gives you confidence that it's at least as good efficacy. And if it's a safety or tolerability issue for a lot of those patients, what is it about either the mechanism here or the drug itself that's giving you confidence that you can kind of overcome that?

Well, if you look at the [ somumelack ], I think that, that's case in point. You're able to -- in 6 months, you were able to get full hair regrowth. They were able to go from their gray colored hair to their jet black hair, and they were able to have durability for 4-plus years after treatment. And then what really got us excited was the work that we did with Professor Paus. And this for us was very much a derisking experiment. We were able to take ex vivo samples of the scalp biopsies and we're able to run an experiment to see how ABS-201 performed on those scalp biopsies. And it was incredible. Within 6 days, we're able to actually see stem cell growth. We saw upregulation of the key growth factors, TGF-beta decrease, which is a known catogen driver. And we were able to actually see hair regrowth as well in those. And we saw that prolactin when you added it was a catogen driver and took hair growth in the opposite direction. And so within 6 days, we saw really remarkable results from human ex-vivo samples.

And so that for us, like really bridged that gap of like will this work in humans? We believe, absolutely. I think the question is, can you hit the receptor hard enough? On the stem tail the [indiscernible] it was greater than 90% receptor occupancy. We believe based on the data we've seen now, if we can achieve greater than 90%, we should be able to achieve at or above that 30% to 40% or 30 to 40 hairs per square centimeter that oral Minoxidil achieves, but potentially even much higher than that because the stem cell meacks were at like 80 to 90 or 80 to 100 hairs per square centimeter.

So we feel very, very confident going into this. And I think we're going to have some very differentiated TPP coming out of this Phase IIa study.

Maybe before we get into expectations for the data itself, I want to ask just so we can level set how the study is being run, the idea about IV subcu, different kind of treatment regimens that you're testing, what's kind of the time line for testing a couple of those dosing regimens?

Yes, I can comment. So right now, the SAD is ongoing. There'll be 4 cohorts tested in the SAD. That's all ID for maximum exposure. That gives us some really good data for PK modeling. And then we'll roll into a MAD study, and we're going to test 3 doses there.

Everything is randomized, placebo-controlled. And in the MAD study, patients will see 4 doses, 1 dose every 8 weeks. And so we'll be able to have a 13-week interim readout in the second half. And then early next year, we'll have the 26-week final readout. And those readouts were really looking at targeted hair growth as well as some secondaries around the thickness of the hair and the pigmentation. And we'll also, of course, do global photography.

And I also mentioned too, we have dosed the third cohort. Everything is looking good so far and on track to dose that fourth cohort here very shortly.

And just sorry, the fourth cohort is...

In the SAD...

Yes. Okay. So all right. So ideally coming out of this combined kind of Phase I/II, you have a proposed dosing. I guess what is kind of the target dose interval you think? Obviously, it's early days, so we'll have to kind of see how the early data looks. But is this like a monthly, bimonthly subcu injection once it hits the market? Is that kind of the plan at this point?

So we'll be able to answer that more fully once we get the PK data. But as you know, we've introduced half-life extension mutations into the molecule. So we're expecting potentially a dose every 2 months and that would give you -- when you do that 3 doses over 6 months, that would give you that 6 months of exposure, really targeting greater than 90% receptor occupancy like what we've seen in that NHP study.

And we think that can deliver durable hair growth. And that would be the new category of therapy that I think patients are very interested in.

Yes. And so again, it would be 3 doses and potentially then durability for 2 to 3 years. And so we think that, that's extremely convenient for patients.

Okay. So when we -- fully can see we're getting a little ahead of ourselves. But when we think about a pivotal study then, would you expect to need to follow them for that long? Or is there -- would you have like a primary endpoint 6 months or so out and then follow them as a secondary tertiary beyond there and then add that into the label once you have?

Yes. So we are going to be following these patients a year afterwards. And there is an important note on this. We likely won't be seeking the durability on the label itself, but this would be something that would come post approval, but we are looking at atleast durability a year afterwards and even in this ongoing study right now.

Okay. So help us in level set, I know that you touched on this, but next, let's say, 18, 24 months now, as we -- you hit the data points, readouts, timing as expected, when should we potentially expect a pivotal study to be able to start? And how long do you think it could potentially take to enroll?

Yes. So we haven't given guidance on when we'd start the registrational studies. But as I mentioned, we think that it will be a very efficient registrational study process, and we think it will be easy and quick to recruit. We would plan to do it in the U.S. as well as Europe. And I think according to the current plans that we have and we're refining those, we think we could be in line for an approval around 2030 based on that plan. But we'll give more details later in the year.

Okay. All right. So maybe zooming out just a little bit, still on 201, but can you elaborate a little bit more on biological rationale? And any potential expected read-through from the AGA Phase I POC data to the expansion -- planned expansion into endometriosis? And what's kind of the biological rationale between those two?

Yes. Proleactin receptor is actually a pretty incredible receptor. I think a lot of times, it is associated with reproduction, hence the name prolactation. But if you look at it and there's 20 to 30 years of literature out there, you see prolactin, proactin receptor expressed throughout the body. And what you see it associated with a lot and you -- we have mechanistic data even on hair is that it's on this stress axis and it's mediated and upregulated during stress. Hence, why the more stress you get, the more grain you get, the more miniaturization you see. But we're also seeing data as well in other autoimmune diseases where it is upregulated. It does seem to play a role in autoimmunity. And then in particular, for endometriosis, what we're seeing is that increase in prolactin drives lesion formation and then also drives the pain sensitization as well. And so we see that in preclinical models, and there's a lot of literature on the sensitization.

And so we think that by blocking the prolactin receptor, you're going to decrease the overall pain that women experience during [indiscernible] and we already see proof of concept from the HOPE study on this. And so we're really excited about going into endometriosis, but there's also a lot, I think, other adjacent indications as well. And I will note, I think one of the reasons why prolactin has been overlooked as well is that we look at it from a pituitary standpoint.

It's expressed systemically through the pituitary. But there's also extra pituitary expression in the periphery. And so -- and that is driven off of different transcriptional regulators. So like dopamine that normally controls prolactin doesn't control the peripheral expression in the tissue. And so I think it has been overlooked quite a bit, at least within the industry. And I think that there's exciting new biology even outside of AGA and endometriosis.

So presumably, you get good safety exposure data from the Phase I and can go directly into Phase II within endometriosis, right? And, Okay. So do we have a sense of when this -- what's kind of the time line then for endometriosis relative to AGA?

Yes. I mean we're planning to start an endometriosis Phase II study Q4 this year.

All right. So I know we touched on this a little bit earlier just about kind of the consumerization of a lot of this part of the health care market, right? So can you speak a little bit to how you're watching a lot of, let's say, the GLP-1 conversation unfold, right? And how this is kind of guiding your approach, maybe less on the clinical development side, but really from a commercial standpoint? Like what are you looking to and how a lot of these aesthetics markets are launching and kind of evolving commercially? And how 201 could realistically fit into that kind of model? And if it does work by 2030, let's just say what that kind of launch trajectory would ultimately look like?

Yes. I think first, it's making sure that the derms are on board with this. I think our original launch plan would be going through the derms. But ultimately, long term, we see this DTC. That's what you see with the GLP-1s. I think a lot of this is going to be driven by social media influencers. It's going to be a very, very different type of launch than a lot of other drugs.

And you do see, I think, other pharma starting to go into this preventative care, this kind of like total vitality market. It is massive. And I think one of the great things about a consumer-facing brand is that you can actually build up brand reputation. I think the pharma industry has always lived and died off of LOEs and constantly having to refill, fill the pipeline. But BOTOX is a perfect example where they lost exclusivity and they were able to continue to maintain market share because of that brand. And I think that, that's a similar thing that you can see here with ABS-201, but with the GLPs.

And I think that, that's, I think, a really important kind of new direction is like building brand to really be able to sustain long-term value.

Just one other quick point, too. It's not just aesthetics, right? We saw this in our patient interviews and in the survey. Patients have significant psychological effects from hair loss. And we're actually meeting with some Hartford professors tomorrow who have been looking into this topic as well. But we see a lot of consternation from patients. They feel like they don't want to be in social environments. They feel unattractive. They feel older. There's a lot of psychological components that go into this that are beyond what I think you traditionally think of as aesthetics.

Okay. All right. So I know we're kind of buzzing through this time. So I wanted to give a few minutes on kind of the deeper pipeline and strategy around this as well. So maybe just quickly on 101 TL1A, where does this program kind of stand now? What's the plan for kind of data disclosure and potential partnership conversations where are they at?

So we're completing the Phase I study now. That will take us another roughly quarter to do. And we're actively engaged with potential partners and what we're most excited about is the prospect of finding a partner to work on a novel indication, indication that no one else has explored TL1A. And so we hope to announce something about that later this year. But that's only something we would do with a partner. We're devoting our resources, our capital towards advancing ABS-201.

And then when we look beyond 101 and 201 into the deeper pipeline now, what's kind of the proposed timing strategy for some of these assets? And how does this kind of fit into your retain internally versus partner versus completely sell altogether? Like where does the rest of the pipeline kind of fall in that strategy?

Yes. We take it case by case. I think some of the bigger indications that would obviously take more capital to do. We are looking to out-license those earlier. And I would say that the focus has really been on I&I, autoimmune and really looking towards more kind of this preventative care angle and what could potentially fit in with out-of-pocket strategy. But I would say it is becoming, I think, quite a robust pipeline, and I think we have some interesting bispecifics that are coming out of it.

And I think things that will synergize with the prolactin receptor and some other interesting targets as well. So I'd say it's definitely coming together really well and quite robust. And we've already been chatting with pharma about some of these that we think would be best for pharma to take on.

Okay. So seeing the case-by-case approach, I guess, in an ideal situation, fully mature company, what's kind of your ideal stage of development that you would partner off some of these assets? If you know kind of even preclinically, this isn't something we, for whatever reason, don't want to really carry to the market ourselves.

It's the goal to maybe before you even enter a Phase I, find a potential partner, run a Phase I and then see who is interested. Like what's kind of the ideal cadence of this now?

So maybe just to back up, one of the things that to me is really exciting is the platform is getting more and more efficient. And you asked what our North Star was earlier. The North Star is creating assets. That's where all the value is. And so when we look at leveraging our platform, there's only so many things we can take forward into late-stage clinical development. And we're squarely focused on 201. There's a pipeline and a drug right there. We think those opportunities are enormous. But the platform itself is generating lots of assets. And as Sean mentioned, we have a bunch of things we'll probably announce later this year, bispecifics some really challenging targets.

We think that's a great way to help fund what we're doing in development. So we'll look to partner some of those quite early. We think we could partner some of those at the DC phase. We've already had discussions with pharma about a couple of those assets we're bringing along. And so we think as we go forward in time, you asked about what do you see us in 4 or 5 years earlier in the conversation. I think you'll see us developing select programs later in development where the ROI makes sense for a company of our size. AG is a great example. That ROI is enormous. We have to take that on. We will take that on. But you'll see us develop other really exciting programs where we can out-license them earlier in development and take that capital, recycle it into our development and into the platform.

Yes. I mean you both mentioned the conversations with pharma now. And I know this is something that we'll speak to quite a bit over the next few days. So pay attention to all the AI panels throughout the week. But maybe in your more recent conversations now, we've seen pharma putting a lot of money into their own internal AI investments, right. Frankly, for years, but I think especially the last couple of years in particular.

So I guess in your recent conversations, like where is pharma's heads at in terms of what they're interested in spending money through external partnerships, ex licenses, things like that versus what they are looking to kind of build out internally? And how do we think about all the money that we're seeing pour into their own internal capabilities and what that ultimately means for a lot of more stand-alone companies that are exclusively focused on...

I think that what we're seeing is them continue to invest in internal development. I think they're even switching towards SaaS models. It's great for them because they can spend x amount of capital and not have to worry about any sort of downstream milestones and royalties. And I think you're going to continue to see this. And we don't want to play in that space. We want to continue to leverage AI and partner on the asset side. But yes, we are seeing more and more pharma wanting to build this out internally and wanting to work with companies that will enable them to do that, whether that's through a SaaS or a fee-for-service type of arrangement.

And maybe just in the last 30 seconds here, I know we kind of covered a lot from kind of high-level strategy through individual pipeline assets. But from where you guys are standing right now, what do you feel is kind of the most palpable point of disconnect between what you see as the primary value driver for the company and maybe where a lot of the Street's head is at when they try to look at you guys?

I think the Street head is in the right direction. I think ABS-201, I think, is 80% of the conversation that we are having. We're extremely excited about that. We see this as a potential game changer for the company. But one piece that I will say that I'm seeing completely transform not only Absci, but this industry over the last 6 months is truly the Agentic AI, see that really being able to scale each and every one of us like 10x. And I think you're going to get much more efficiency. You you tap that with the AI models that we've already had, you start to see how things can start to be fully autonomous, how you can start to just rapidly go after various different targets with ease. It's a very exciting new frontier. And a year ago, I would have never thought we would be where we are now. And I think it kind of changes the paradigm of how we're -- how this industry is going to ultimately move forward. But it's going to allow exciting drugs to get to patients faster than ever before.

So I can't resist putting you in the hot seat for a minute. I think the biggest disconnect I see today is valuing the 201 program into the stock. And not you specifically, but we've had analysts build their models. And they've told us we don't know how to release this because the stock price we get to is so far away from where you're trading today. And so when I look at that disconnection, I think we're going to close that gap over the next 6 months easily. And that's what's really exciting.

All right. And on that note, it's a pleasure to see you guys always. Thank you for joining us, and thank you all for listening today. Got more to come.

Thank you.

Good afternoon. Thanks for joining us for another session at the 44th JPMorgan Healthcare Conference. I'm Brian Cheng, one of the senior biotech analysts here at the firm. On stage, we have Absci.

I will now pass the mic to their CEO, Sean McClain for a short presentation, followed by a live audience Q&A. Sean, welcome. The stage is yours.

Thank you, Brian. As Brian said, I'm Sean McClain, the Founder and CEO of Absci. We're a generative AI drug creation company, and we're entering this really exciting new era where we're actually seeing the molecules that we designed in our AI, not only go into the clinic, but actually start to see proof of concept. Within the next 24 months, we will have two Phase II readouts in androgenic alopecia as well as endometriosis.

We're looking to industrialize AI for drug discovery. We want to be able to leverage AI to figure out what biology we should be going after, what molecules we should be designing and this is all occurring through our wet lab in the loop. Today, we announced a brand-new model, Origin-1 that was released. And the progress we've been making on the AI has been because of this wet lab in the loop that you see here on the right. The 6-week cycle time that we have, we were able to rapidly validate our models with real-world data. And again, this is allowing us to make decisions as to which biology we should be going after and helping us to fail as quickly as we possibly can.

So what is it translate into in terms of overall cost and spend. Traditionally, it takes 5.5 years to get one drug into the clinic, roughly a $50 million to $100 million investment. With ABS-101 and ABS-201, we've been able to dramatically decrease that cost and time. We've been able to show that we can get in the clinic in roughly 2 years with a total investment of $15 million. So being able to dramatically decrease the overall time it takes to get into the clinic as well as the overall cost. But cost and speed aren't everything with AI. We want to be able to leverage the technology to go after diseases that have high unmet medical need where standard of care is poor and we've been able to show this with two of our programs. This is ABS-201 for androgenic alopecia and endometriosis. And these two programs, we, again, will have Phase II readouts in the next 24 months.

We have the opportunity today of releasing a brand-new manuscript describing our Origin-1 model. You can actually find out more information and actually see the manuscript with the QR code below here. And this model is focused on the de novo design of antibodies to what we are calling zero-prior epitopes. Now what do I mean by zero-prior epitopes? These are epitopes that do not have a structurally defined protein, protein interface. So these are novel interfaces where, again, there have been no known structural binders. Now why is this relevant? This allows us to actually start to go after these hard-to-drug targets where there, again, are no known binders. And this is really exciting because this allows us to start to go after exciting new biology against these GPCRs and ion channels. And this is really the first that we've seen and, to the best of our knowledge, is one of the state-of-the-art models in de novo design Origin-1.

Now this ties really nicely into our overall strategy at Absci. We're not looking to develop me-too therapies at Absci. We're looking to go after hard-to-drug diseases, where we have the opportunity to be potentially first-in-class and address diseases that have high unmet medical need where standard of care is poor. And so you see that obviously with our clinical stage pipeline, but we're applying Origin-1 to the earlier-stage pipeline to really go after these hard-to-drug targets. And this is where we want to stay focused as a company, leveraging our AI design platform.

Now let's dive into ABS-201, a program that I'm really excited about as well as a mechanism that is extremely interesting, the prolactin receptor. The first indication we're going after here is androgenic alopecia. So think hair regrowth. Wouldn't it be incredible in the next few years to actually have AI cure baldness? Well, that very well could be the case. This is a huge market. 80 million people in the U.S. alone suffer from androgenic alopecia. The standard of care, again, poor. You have oral, shampoos, all of these drugs don't give the efficacy patients are looking for. Additionally, they don't have the durability. They don't have that disease-modifying potential. And last but not least, I think one piece that is underlooked in this particular category. It is very cost effective and fast to run these AGA studies. And so we have a path for rapid approval in AGA, and we'll talk more about the headline trial, which we're currently running, which is a Phase I/IIa study in androgenic alopecia.

So let's dive into the prolactin receptor mechanism for a second. So one of the things that's unique about prolactin production in scalp is that it isn't driven from the systemic pituitary endocrine system that you would think. It's actually driven off of a separate promoter that is completely independent from the systemic production of prolactin. And what ends up happening over time is that you get a buildup of prolactinemia, or prolactin in the scalp, that drives the STAT5 pathway. And the classic pathology that you see with AGA patients is these progenitor cell lines decrease over time. And that leads to the miniaturization of these hair follicles. And by blocking the prolactin receptor, you're actually able to build up all the machinery that's necessary, regain the progenitor stem cells and ultimately reverse the miniaturization or regrow that hair follicle.

What got us really excited initially about this program was actually the work that our Chief Innovation Officer, Andreas Busch did prior to his time at Absci. He was studying prolactin receptor for endometriosis, and it was a very serendipitous discovery. The mice that he was studying with -- for endometriosis, they were shaved and the ones that were on drug actually regrew their hair faster than the ones that didn't, which led him to commission this stump-tailed macaque study here. And what you see here are the tops of the bald stump-tailed macaque and the beautiful part about this particular model is these are naturally occurring bald monkeys. So there are no modifications to these monkeys. And they had 28 weeks of treatment with a anti-prolactin receptor antibody and by 6 months, you can see they go from a bald head to a full head of hair. And not only did they get the hair regrowth, they were able to repigment their hair as well. So you see their gray hair, so they're jet black. And then shockingly, post treatment for up to 4 years, they continued to have their hair. You don't see this with anything else. And we'll talk more about why we see that durability on the subsequent slide here with the ex vivo data.

So we recently had a KOL seminar in December with some of the leading experts in hair. And we presented this data. We were able to collaborate with Professor Ralph Paus, a world-leading expert in hair. And he had developed a technology and an assay to actually take human scalp biopsy samples and study the effects of various different molecules. And what we did in this particular study was we looked at the effects of ABS-201 on the hair follicle as well as prolactin and additionally, prolactin plus ABS-201. And what you can see here is that ABS-201 does indeed drive the follicle into the active growth state. So by blocking the prolactin receptor, you're shunting it into the active growth state. And then as you would expect, with prolactin, you get the STAT5 pathway activated and that drives the follicle into the catagen state. And then when you have ABS-201 plus prolactin, you're able to rescue that follicle and have that follicle stay in that anagen or active growth state.

And additionally to this data, we were able to show actual further hair shaft production. And when you add prolactin, you actually see a decrease in the hair shaft production.

So additionally, what we found -- and all this data is available on our website from the KOL day, I'm just going to highlight it here at a high level, but we start to paint a picture of what's going on with these ex vivo samples. So first, what we saw was the progenitor cells CD34 and CD20 actually were able to regrow. And we saw the K15 stem cells actually prevent apoptosis. So you have the K15 stem cells that remain. The progenitor cells increase. And not only that, we saw key growth factors that drive the follicle into the anagen state, which are IGF-1 and FGF-7.

Additionally, we saw the catagen drivers, TGF-beta decreased. And so you get the full picture of that the prolactin receptor is the master regulatory switch for the hair follicle. It essentially gives it all the machinery that's needed to actually reverse the miniaturization. So blocking the prolactin receptor reverses the miniaturization and ultimately allows you to regrow your hair. This was really exciting translational work from that Stump-tailed macaque to actually now seeing this in human ex vivo samples, and we can kind of see the full mechanistic picture of what is going on here.

And going back to the durability, we believe that the stem cell regeneration is what is giving the durable effect that you see in the stump-tailed macaque data. We -- so going on to the human trials we have ongoing now. We have a lot of confidence given the stump-tailed macaque data as well as the ex vivo data that we hopefully will see that translate into humans in the headline trial. This is a Phase I/IIa study looking at safety, tolerability and also efficacy. We have the single ascending dose arm that's already started. We have filled our first two cohorts. And in this particular study, we are looking at healthy volunteers and looking at safety and tolerability. We plan to complete that in the first half and then transition to our multiple ascending dose, which will be 26 weeks. Here, we'll be looking at not only safety and tolerability, but also the efficacy as well.

The total trial size is 227 participants, both male and female. And the primary efficacy end points that we have here are target area hair count width as well as darkness. The first readout we will have on this will be our safety readout the first half of this year. And then we'll have a 13-week efficacy readout in the second half of -- sorry, first half of this year, we'll have safety and then the second half of this year, we will have the 13-week efficacy readout. And then the study will complete early next year.

So we've had the opportunity to build a target product profile for ABS-201 through talking with KOLs, patients and we believe a target product profile that is able to achieve durability of 2 to 3 years with the ability to achieve the high end of oral Minoxidil will give us a home run product. And we built a consumer quant study based off of this TPP. Now we do believe we could potentially achieve what a hair transplant achieves and what you saw in the monkey study. But that is not needed to have a home run product based on the consumer quant study which we conducted. And all of this research, again, is in our KOL day, if you'd like to dive into more detailed information. I'm just going to highlight a few points from the consumer Quant study. Again, we took our target product profile and did a consumer quant study with 610 participants. And it was pretty striking. Up to 97% of men and 88% of men were extremely or very likely to ask their health care professional about ABS-201. Additionally, 37% of men and 36% of women would try ABS-201 as a first-line therapy.

Now this may seem low, but if you look at the standard of care that's out there right now, it's extremely cheap. You have shampoos, you have orals, and they don't cost a lot, but they don't give you the efficacy. Patients and the participants of this study said that they would forgo those and try a premium-priced product that gave them the durability and the hair regrowth. That's pretty significant as a first-line therapy when everything else out there is cheap. I mean it really goes to show that these participants want hair regrowth and they want that durability. The last piece I'll mention is that the psychological impact of this disease is huge. 80% of men and 81% of women report negative psychological impact. This isn't just about vanity. This is really about giving individuals their identity back. They want to feel that confidence again, they want to be themselves and being able to be able to give them their hair back, we'll give them that confidence and that identity back.

So we then took the consumer quant study and wanted to look at how big this market is. So we took the individuals that had the strongest interest in the TPP with -- that we're willing to pay a premium price, which was roughly 15 million to 18 million individuals. And we assumed a 2- to 3-year durability and that narrowed down the patient population to 5 million to 9 million patients treated per year. And that got us to a total addressable market per year within the U.S. at greater than $25 billion and greater than $40 billion worldwide. So obviously, this is a massive market, no matter how you slice it or dice it.

So going on quickly to endometriosis for ABS-201. Women's health for far too long has been underfunded, underappreciated and we're excited at Absci to actually be pursuing women's health, and in particular, endometriosis. Endometriosis affects 1 in 10 women. The standard of care is extremely poor here, and there are currently no disease-modifying therapies on the market. And additionally, this particular mechanism got -- had really nice proof-of-concept Phase II data with the HMI-115 study, really derisking this from a clinical standpoint, and we're really excited to be pursuing this.

Just to quickly highlight the mechanism. What ends up happening is you have, again, local prolactin that drives the lesion growth and additionally, there are prolactin receptors on the sensory neurons, which drive the pain that women experience in endometriosis. And so by blocking the prolactin receptor, we believe that we can stop the lesion growth as well as decrease the overall pain. The two preclinical studies. I'll just highlight that demonstrate this. One is on the left-hand side. There is a study that was done that showed that blocking the prolactin receptor in mice decreased overall lesion formation and then on the right-hand side is actually data from ABS-201 looking at pain, and we were able to show in an endometriosis mouse model that we were able to decrease overall pain experience with ABS-201, the mice were able to walk further, overall showing that pain was alleviated in this endometrial model with ABS-201.

The market for this is large, as I said, 1 in 10 women suffer from this. Current standard of care is poor. You have the GnRHs. Women can't stay on these for very long. They actually put a lot of women into a postmenopausal state. You have bone density, mineral loss and there is a dire need for a drug that could provide disease-modifying potential. And we believe ABS-201 could ultimately do this. We have a very innovative pipeline outside of ABS-201. We -- our next-gen pipeline is focused on leveraging Origin-1 to design drugs to hard-to-drug targets, and we'll be announcing some more drug candidates likely later this year that have been developing in our pipeline over the past year or so.

We have an amazing team here that make this all possible, amazing drug hunters, disease biologists and AI scientists that are really helping us progress this technology forward. We wouldn't be here without them. We have 140 employees at Absci, 3 clinical stage programs, an amazing wet lab in the loop in Vancouver, over 10 partners and currently, our balance sheet as of the end of this year is $143 million, and we have runway into the first half of '28. And all in here, we have a very exciting 2024 or sorry, we have a very exciting 24 months ahead, I should say, with ABS-201. In androgenic alopecia, we have the Phase I interim readout in the first half or the Phase I readout in the first half of this year. And then the 13-week interim efficacy readout in the second half of this year. And with endometriosis, we plan to start that trial in Q4 of this year, and we'll have a Phase II proof-of-concept readout a year later. So the next 24 months are going to be very exciting for Absci and we're excited to see these AI designed molecules actually make a difference in patients' lives. Thank you.

Great. Let's start the question-and-answer session. We're joined by Sean and also CFO and CBO, Zach Jonasson. For those who are in the audience, if you have any questions, feel free to raise your hand. For those who are joining us virtually, you can also submit questions on the portal.

First of all, thank you for sharing such exciting progress of your pipelines, including 201 and 101. Could you please share some more color about how do you use AI to develop these wonderful compounds? And how do you compare your AI method with other competitors, for example, like Recursion on the market? Like what's the differentiator of your AI methodology?

Yes Absolutely. So we just put out a manuscript today describing Origin-1. And what this is focused in on is actually the generation of these molecules to zero-prior epitopes. We think that this is a major differentiation. This allows us to go after targets that have no known complexes to them. These are ion channels, GPCRs. And we're leveraging this technology, again, to go after these hard-to-drug targets earlier in our pipeline. And this is a design platform. It's focused on antibodies. And a company like Recursion actually uses a very similar approach that we do at wet lab in the loop. They're focused more on the small molecule side, the target biology and we see it as kind of analogous to what we're doing just in a different area.

How do we think about, I guess, just the Origin-1 model, I think it's the new piece that I have not seen before. So maybe just how do we think about the capability of it? And how far can it go? Can you talk about when it comes to the ability to spin out different modalities? Is it only limited to biologics? Is there also a capability to expand into bispecifics, small molecule? Like how do you think about just the expansion potential of Origin-1?

Yes. So Origin-1 is all protein-based or antibody-based -- we do see this expanding to bispecifics. We actually have bispecifics in our own pipeline, and we're going to continue to advance that. And we do -- again, we see that the potential here being able to go after those hard-to-drug epitopes. And this is really a state-of-the-art model actually demonstrating this capability, which is really exciting.

And how does that incorporate -- get incorporated into the current portfolio when it comes to discovering new products? At what time in your time line in the next couple of years, could we start to see products spinning out from the Origin-1 model?

I think you're already seeing products spun out of our earlier versions of our model, and those are the programs Sean pointed to. I think what's really exciting about what we do at Absci is we see advances in the AI platform quarter-on-quarter, sometimes monthly. And so when we think about targeting new drugs, we're looking for disease areas that have high unmet need where we could really create a differentiated therapeutic based on where the platform is today. And again, the platform is always improving. So if we look at what we've done with Origin, this really opens up the druggable space. We can go after these really challenging targets. We can go after epitopes that don't have any known information about them to really design in biology that you couldn't do before. And so we're really excited to apply that to new preclinical compounds that we're working on today. And I can't tell you what they are, but I think we look forward to telling you a little bit more next year.

Switching gears to 201, your AGA program. What is your level of confidence when you look at the preclinical data to showing proof of concept in the near term. Can you just kind of talk about the translatability of your preclinical work so far? And also just going back to the level of confidence?

What gave us a lot of confidence going into this trial was the ex vivo data. Obviously, we all got excited by the stump-tailed macaque, but you always wonder how is that going to translate to humans. And when we're able to take human scalp biopsies and be able to show that you could drive the follicle into the active growth state, you saw the stem cells increase the growth factors, decreased TGF beta. You got to kind of see that full picture that gave us a very, very strong confidence that we believe that this is going to translate into humans. And additionally, it showed us that the receptor occupancy is extremely important. We need to be able to achieve greater than 90% receptor occupancy, which is what you saw on the stump-tailed macaque and we -- from a modeling perspective, looking at the dosing, there are mini doses that get us above that 90% receptor occupancy, we're going to hit it hard. And if we do that, we do believe that, that will translate and we are, I'd say, very confident going into the readout in the second half.

Looking into the headline readout later this year, what are some of the items that are important to watch in a SAD portion?

Yes. I mean in the SAD portion, and we'll report some of this data later in the first half, we're looking at safety and tolerability, primarily, but we're also going to have an eye for PK that's going to guide us a little bit as we look at future development plans for Phase III registrational studies. And I should mention, we've engineered a longer half-life into this molecule. So really for convenience of dosing. And so we're looking to see that effect in the PK profile.

Okay. Maybe just, I guess, looking into the MAD portion to, how much hair growth or what are you specifically looking for? And can you talk about maybe perhaps just kind of establish a baseline. What do you see in terms of the hair growth among the currently available options? And then you can kind of lay out kind of a win scenario out of the MAD portion.

Yes. So we're going to be looking at the target area hair count, width as well as pigmentation. Those are going to be the end points on overall efficacy. And the 13 week, we believe we're going to see nice hair regrowth and an increase in the target area hair count. But based on what we saw in the stump-tailed macaque, we do expect continued increase in that target area hair count into the 26-week readout and potentially past that. So the 13 week is going to be a very strong indicator of where the trend is going, and we do expect more hair growth from there. And in terms of what we see as a win, it's what I mentioned in the presentation. We believe a TPP that delivers 2 to 3 years of durability with the efficacy of the upper end of oral Minoxidil, we see that as a home run. But if you look at the stump-tailed macaque data, that's well north of a hair transplant of 80-plus hairs per square centimeter. And so we do think that the upside to what the home run would be potentially a hair transplant, but you don't need that to have a strong, viable product here.

Maybe I'll just add to that. Like, it's important to step back and look at the landscape. Patients are very dissatisfied with their treatment options. I think that's been reported only 9% of patients are satisfied with the options they have today. And that's because they give very limited efficacy, but also very variable efficacy. A lot of patients don't even respond to Minoxidil. And then a lot of those treatments have side effects that you really don't want.

So this market is wide open. And what we're bringing to market here is a brand-new category that delivers efficacy, durability and convenience. Imagine the 3 doses over 6 months and being able to sort of set and forget, and then you get 2 to 3 years of efficacy without having to do anything.

Is -- are the patients that go into the MAD portion, are they allowed to go on background finasteride or Minoxidil?

No, they are not. And there's a 4-month washout period for those that are on Minoxidil or finasteride. So you have that washout period and they're not allowed to take any additional medications.

Okay. Just on pricing, I think this is one of the key question around how we think about the market opportunity, right? This is an interesting indication where you start to see a lot of translation from the GLP space. This is one of the out-of-pocket indication. So how do you think about pricing? I know -- I'm sure you've done some consumer work here. Where do you think a potential profile like this could land?

I loved that you asked the question, and you know I can't give you a price until the day we launch, but I can say we tested some pricing in the consumer survey and it tests very well. That's how we get to some of those big market numbers in terms of the TAM. The point is patients are dissatisfied. They're willing to pay for convenience and performance and durability. And so I think the pricing capability could be anywhere from multiple years of PRP all the way up to hair transplant depending on where the efficacy is.

And it's really interesting with the GLP-1s, we're entering this like new interesting era of like what I call it, total vitality, consumers are wanting weight loss. They're wanting their hair. They're wanting their wrinkles removed and they're willing to pay out of pocket for this. And it also goes along the lines of shifting towards preventative care. The consumer wants to take drugs now that will keep them healthy instead of sick care once -- finding drugs once they have a disease. And so I think this is going to continue to be a cash pay market and people are willing to pay for this. I mean you look at supplements out there. I mean, you look at the Chinese peptides that people are taking that aren't approved. People are wanting to keep themselves healthy. They want that total vitality. And we think that this fits into exactly what the consumer wants.

Maybe just on the endometriosis side. We have seen some data on that indication proving that the MOA will work there. What do you expect there to see? I guess, will there be any translation coming from read-through, coming from the upcoming MAD data later this year. How much do you see as a read-through from AGA from alopecia to endometriosis?

Yes. Look, the safety readout further derisk both programs. So there's that element from the SAD study that's ongoing. But I don't think we'll see a lot of translation from the AGA side because endometriosis is a very specific disease. But to your prior question, what do we expect to see relative to what HMI saw? We expect to see much better efficacy and that's for a couple of reasons. The molecule we have is much better designed and it will have a longer half life, and we can go to a much higher dose. They're very limited on the dose they can give to 240-milligram based on the safety work that Bayer did. So we will be able to test the dose response. And you know this, if you look into their trial results, there was a dose response there, and they capped out.

So that's another area where we should be able to see more efficacy. And then the third point I'll make is we're very happy to see that result, but I think we also recognize that their trial was not designed very well. We will run a very well-designed trial, and we will execute it.

Okay. Any questions?

Can you guys give an overview of -- back on the origin sort of the technology and infrastructure and some of your partners, just looking on your website, I see you list some of the names, but I'm just Kind of curious as to who you're working with there for the model and the build-out and the ongoing use?

I can talk a little bit about some of the tech partnerships that we have. We recently, about a year ago, closed a partnership with AMD where they made a $20 million investment, and we are working with them to scale up their compute in protein design, both on the training and the inference side, which has been great to be able to work with them on that. And Zack can talk a little bit about the pharma partnerships that we have.

Yes. I mean what we're seeing in the pharma partnerships is they all want to work on these challenging targets, I mean, which makes perfect sense, and that's where we want to work. So Origin not only really enables our next-generation pipeline but it's really enabling these partnerships. And I'll give you an example. The models we're working on just prior to Origin were successful already in designing against an ion channel with 1 of our partners and we did put some press out around that in July. And that's fantastic work, a very difficult target, not addressable before by an antibody. So that's the kind of things we're doing with our partners is defining those types of projects where we can create something truly differentiated.

Great. Well, that's a lot of time we have. Thank you so much for your time. Thank you.

Thank you.

Good morning, everyone. Thank you for joining our deep dive today into ABS-201. At Absci, our mission is to use generative AI to create better biologics for patients who don't have good enough options today. We talk a lot about our platform, our lab-in-the-loop, and our ability to create better biologics faster. But today isn't just about the platform in the abstract, today is about the results. ABS-201, which we believe could be a paradigm-changing therapeutic for androgenic alopecia.

Now historically, the biopharma industry has dismissed hair loss as just cosmetic. But when you speak to patients, you realize that characterization is deeply flawed. For tens of millions of people, both men and women, this is not about vanity. It's about identity. It's about mental health and the profound loss of confidence that impacts their daily lives.

Despite this massive unmet medical need, the standard of care has remained stagnant for decades, we're relying on old mechanisms that often come with difficult trade-offs. This is why we're so excited about ABS-201, by leveraging our AI drug creation platform, we have unlocked the prolactin receptor pathway in a way that we believe offers a differentiated, best-in-class profile. We have an incredible agenda for you today. It follows the journey from the patient to the antibody to the market.

First, you'll hear from Mr. Rossi, who will lay the groundwork in the patient reality and the psychosocial impact of hair loss. Then we'll move into the science. Andreas will discuss his long history with the mechanism and why he's so excited to finally see this brought forward in the clinical trials. Professor Ralf Paus, a world expert on hair biology, will walk you through the mechanism of action and the compelling ex vivo data we've generated. Next, Denis and Dr. Sinclair will detail our clinical trial design. Dr. Sinclair's experience with the prolactin receptor mechanism is unparalleled. He will explain why he believes this trial is set up for success. Finally, Dr. Goldberg, Mike Jafar and Zach Jonasson will define the target product profile necessary to change the treatment landscape. They will walk us through the significant commercial opportunity that lies ahead.

We believe ABS-201 is more than just an asset. It is proof of what happens when you combine deep biological insight with the speed and precision of generative AI. But before we get into the data, I want to ensure we start where every drug development journey should start, with the patient. We'll play a short video that captures the reality of living with AGA. After that, I'll hand it over to Dr. Rossi. Thank you for being here. Let's watch.

[Presentation]

Hi, I'm Dr. Rossi. I'm a board-certified dermatologist and dermatologic surgeon. I work at Memorial Sloan Kettering in New York City. And there's not a day that goes by that I don't talk about hair loss with my patients. Hair loss for many patients is not just a cosmetic issue. It's actually a medical problem that affects them psychosocially, emotionally and then their daily activities of living. We view hair as something cultural, something that's religious, something that people identify with. Growing up with hairdressing parents and being in a hair salon my whole life, I really know that firsthand, how meticulous people are with their hair.

And so hair loss for me is not just something cosmetic. It's a disease that dermatologists want to tackle, they want to treat, and they want to improve their patient's quality of life. It's akin to obesity. For many years, people didn't think obesity was a disease. They thought it was more a cosmetic -- basically a cosmetic issue, but it's not. We know it's a disease. We know it represents something that's going on inside the body as well. And I view hair loss as that. I try to get to a root cause analysis of why this patient is losing their hair and how we can better treat them holistically.

And there's different causes of hair losses, different types of hair loss. But we do know above all that it really affects patients psychosocially, and not only is it something that's going on physically, but emotionally, it can really take a toll on patients. And even young patients and female patients. And we've seen an uptick of female patients coming in for this. And this is driven by awareness. Back in the day, we didn't have so much awareness of female pattern hair loss. And now that more women are talking about it or describing it, it's really helped to bring this to the forefront, especially for women.

And hair loss does affect everyone. We know all ages, males, females, as you heard from Landon and Kelly, two different time points in their life, both affected by androgenic alopecia. What's really amazing is that I'm seeing patients that are highly motivated to tackle their hair loss. And this includes young men who sort of know that they have it coming down the genetic pipeline. They see their parents with hair loss, and they know they really need to address this early. As well as now females, which is amazing because they're talking more about hair loss, even though there's a lack of FDA-approved medications for it. They're talking more about it in the chat rooms and they're bringing it up in their consultation. They really want to address their hair thinning and their hair loss, especially around the 30s and 40s. It's really critical for them.

And this is something that we want to give options to patients, right? We don't want to just say, hey, there's this only medication that you can take. But if we had more medications that we could actually use in these populations, that were safe, efficacious, but also durable because we know we will have to be treating them for quite some time.

And I'm really excited about the future of hair loss and for myself to treat hair loss, that's because ABS-201 represents a completely novel mechanism of action that we can use to help actually tackle hair loss and androgenic alopecia. It comes at hair loss in a completely new perspective than anything we've had before. And to hear more about the science of ABS-201, the prolactin story, the mechanism of blocking the prolactin receptor. We're going to hear from Andreas Busch, who's going to go over all that amazing research.

I'm Andreas Busch, I'm the Chief Innovation Officer at Absci. Previously, I've been for many years in the industry, being responsible for research and development at Bayer and at Shire. In these times, we have brought numerous projects towards clinical development and approval. I think I would probably account for more than 10 compounds being approved in my past. And I have to say very few projects present themselves with such an excitement and potential as the prolactin receptor antibody which we're going to talk today about in our workshop.

It was at Bayer where we started work on prolactin. Prolactin, as the name says, was obviously first discovered for its role in lactation, pro lactation. But what was also very obvious is that prolactin plays multiple roles in very different diverse pathophysiological events in human biology. We identified a role in endometriosis, but it was already at that time known that also prolactin could play a role in hair growth.

So we found that prolactin was responsible in a dual manner in endometriosis. On the one hand, it was clearly playing a role in [indiscernible] in the way women perceived pain in endometriosis. On the other hand, it was at least also in part responsible for the proliferation of endometrial cells which is, of course, the cause of the lesions and the lesion size. As a consequence, our thought was that inhibition of prolactin in endometriosis would have a dual mechanism too, which is, of course, reduced the lesion would, therefore, be disease-modifying and of course, also reduces the pain, which is the #1 problem women really perceive in endometriosis.

We obviously then developed an antibody against prolactin to study this antibody in disease models. And not to our surprise, it really nicely affected the proliferation of endometriosis in animal models, but much to our surprise, there was a more striking and obvious result which we got, which is the shaved animals, which we had to shave for surgery for endometriosis models, had a very rapid and significant hair growth. The hair really grew like hell in those mice treated with the antibody, thereby validating and confirming the previously-mentioned observation that projecting could play a role in hair growth.

After the very compelling results in mice, we wanted to take that result one step further, we became aware of a naturally-occurring androgenic alopecia model in stump-tailed macaques and again, believe me or not, what is a bigger dream of a pharmacologist than a naturally-occurring disease model in a nonhuman primate. So we went into that primate. I commissioned a study, and the result was just striking, both in male as well as in female nonhuman primates, we saw a sustained hair growth and even further, we saw re-pigmentation of the hair, which at that point in those nonhuman primates had already turned gray.

The experimental design of this macaques study was very well thought through. We treated the animals for 6 months. we dosed in a way that we assumed that we can see 90% occupancy of the prolactin receptors. And we followed up after 6 months of dosing these animals for several years. What we saw was, as already mentioned before, significant hair growth. In some regions, we saw doubling the hair. But we didn't just see significant hair growth, but we saw re-pigmentation of the already gray hair of those macaques. Not only that we saw that after 6 months, we saw this in the follow-up period of up to 4 years in a sustained manner. So that certainly gave us very significant confidence that hair loss is indeed dramatically affected by prolactin and the inhibition of prolactin in this androgenic alopecia setting can cause hair regrowth.

Together with the compelling efficacy results in nonhuman primates, we, of course, were interested in the safety profile of the prolactin receptor antibody. We did the relevant pre-IND safety studies without any significant findings, which we were, of course, very pleased about. But probably even more important, we meanwhile got aware of genetic studies in females in which a complete knockout of the prolactin receptor was shown. And this complete knockout of the prolactin receptor antibody caused nothing in that women except a problem with lactation, but no other health concerns, which, of course, gives us, again, additional confidence in the safety of prolactin receptor antagonism.

So despite those compelling results on the efficacy and safety of prolactin receptor antibody in hair loss, we at the time did not further follow up on development in hair loss for numerous reasons. A, hair loss was not in our strategic focus. A indication like hair loss was considered not appropriately treated with biologics or injections, that was considered an application which should be reserved to other indications.

So similar to other indications, a learning curve had to be taken. This learning curve, which we saw in the industry was taken by GLP-1 agonists, I believe, where in obesity, the application of injectable peptides resulted in a complete new market situation and a situation where patients understood the value of peptide injections. They were very much willing to pay out of their pocket for this indication. And therefore, we see that, of course, a safe and efficacious biologic in an indication such as hair loss is something very viable and something very marketable.

Beside being convinced about the mechanism being a tangible one for hair loss, we also saw the shortcomings of this original antibody. We saw that the half-life was not the half-life we wanted to see. The solubility was not the solubility we wanted to see for an overall commercially-attractive antibody in hair loss.

And when I arrived at Absci, Sean, I very quickly discussed whether this would be an attractive mechanism to, a, show that our platform, our AI platform works for generating an optimized antibody where we can simultaneously optimize several parameters of an antibody and make this prolactin receptor antibody commercially viable. We started this task a little more than 2 years ago, and we came up with an antibody, which now does provide a half-life which we believe will enable us to apply the antibody maybe every 2 to 3 months only. We do think that we have an antibody with a formulation which can be applied subcutaneously, also very important for that indication. Taking all of that together, we do believe that we now have generated with our platform, a commercially highly-attractive antibody.

I was for a very long time, a believer in AI and the potential of AI in the entire value chain of R&D processes. Having said that, it is extremely gratifying now to see that we are bringing an AI-optimized antibody into the clinic that we will see that indeed the power of AI does translate to a clear benefit of the patient.

I talked about the multiple roles of prolactin in human biology, both in pathophysiological settings as well as in physiological settings, of course, one of the pioneers in the role of prolactin in hair growth is Professor Paus. Not only is Professor Paus, an expert in hair follicle biology. He will now work together with us to further characterize the effectiveness and mechanism of ABS-201 on hair follicle biology. With this, it's my privilege in order to hand over to Professor Paus. Over to you.

My name is Ralf Paus. I'm a Research Professor of Dermatology at the University of Miami Millar School of Medicine and have worked for a long time on hair research. In addition, we have investigated neurohormones of human skin. And in both areas, we have done some pioneering studies.

And this is where the hair follicle enters the picture. This tiny but miraculous mini organ that makes hair shafts, for example, on your scalp. This organ is so special because it not only is highly responsive to numerous hormones which control its growth and hair shaft production and hair pigmentation, but it even makes these hormones themselves.

And the discovery that we made about 20 years ago is that one of these hormones that is hardly ever talked about in hair research is prolactin. Prolactin is most famous for being the key hormone that controls milk production, that's where the name comes from, prolactin, but we now know that this hormone does multiple other things. It is controlling growth. It has immunoregulatory functions. And about 20 years ago, we found that not only do human scalp hair follicles respond to stimulation with this hormone, in fact, they were inhibited when we micro dissected and organ cultured them by prolactin, but they even made prolactin themselves.

And this is where ABS-201 comes in the prolactin receptor-blocking antibody developed by Absci. The company had read this old study and thought, well, could we perhaps promote human hair growth by blocking the receptor for this neurohormone in order to keep the hair follicle longer in its growth phase, in anagen and thereby reduce the daily hair shaft shedding and get longer-lasting effects than you would get with normal drugs with a short half-life. And we used a system that we have been using for many years to study the effects of all sorts of hormones and neurohormones on human scalp hair follicles.

What you can do is you can micro-dissect these little organs, and then you throw them into a culture medium and crazily enough, they still grow as if they were on the living human scalp. And then in this assay, as shown here on this slide, you ask the question. Is my test substance, in this case, for example, prolactin or the prolactin receptor antibody, is that pushing the growing follicle, the anagen follicle and you start with 100% anagen follicles in your culture, is that pushing the engine for faster into the regression phase, catagen? Or is it retaining it long in anagen? And if it retains longer in anagen, that means you will have less air loss.

So what we are really looking for in this assay is on the right-hand part of the slide, the transition of anagen follicles into catagen, in this hair cycle. But in this case, we studied it not in isolated micro-dissected hair follicles, but we took the entire human scalp skin. And specifically, we used so-called temporofrontal scalp skin. That is the scalp skin where androgenic alopecia first becomes manifest in males.

And why did we take the entire scalp skin and not micro-dissected hair follicle as we had done 20 years before? We did that because we know that many cells in the skin have receptors for prolactin and can respond to it. And we wanted to see how this antibody is impacting on hair follicles that are living in the real tissue environment that they see in the living human body.

And what you do then is you take photos, you see this on the right-hand side of skin biopsies that you get from volunteers, and you see what is changing in the hair shaft production over 6 days. And then you take sections of these tissue fragments, and you look at them under the microscope and you assess most and -- foremost, what is happening with the health cycle, is -- are these hair follicles staying longer in anagen? Or do they go faster into catagen? That's the key question you have. And then you can look at all sorts of additional markets that get you a better idea of what exactly is happening.

The first thing you need, of course, to check in this system is does this antibody even do what is claimed that it does. And if you want to show that your antibody, in this case, is blocking signaling through the prolactin receptor, you have to show that Phosphorylated-STAT5, one of the signals that transmit a signal after stimulation of the receptor by prolactin is up-regulated. And you see this in the green bar on the right-hand side, that's exactly what happens. If you stimulate scalp skin with prolactin, then you get an up-regulation of this signal. And if you do this in the presence of the blocking antibody, this is [ abrogated. ] That was good news. So we know this antibody is really active. It does what it's supposed to do at the level of the prolactin receptor.

And this perhaps is the most important slide that we initially -- the most important result that we initially got. So we looked, was there any effect on hair shaft production? And as expected from our older studies in micro-dissected hair follicles, if we stimulated entire scalp skin, male scalp skin with prolactin, hair shaft production over 6 days was reduced. And the follicles, the number of follicles that stayed longer in anagen, in the growth phase. You see this by photo-documenting that the hair shaft gets longer, was actually increased, not only when you co-cultivated prolactin with the production receptor antibody, but even by the prolactin receptor antibody itself. That's the bar on the -- second bar from the left in the center.

So that this antibody alone has already hair growth-promoting activities suggest that it is actually inhibiting prolactin in that is locally made in the hair follicle, just as we had published many years ago. And I was particularly interested to see this result and quite gratified because when we had first published this, there was lots of disbelief in the field that this actually is real.

But this is all macroscopic data that we see. So what you can almost see with a naked eye. But the real litmus test is to use histological microscopic markers to prove that these follicles are really longer in anagen and can -- that the antibody against the prolactin receptor can antagonize the push towards catagen that prolactin gives the follicles. That's exactly what you see on this slide.

So again, the antibody alone, the second bar from the left, keeps hair follicles longer in its growth stage. If you only give prolactin, they move into catagen. And if you give prolactin and the antibody, you again, have an anagen-prolonging effect. And then you can look at this more fine-tuned and you can see what is the effect on cell proliferation and cell death, apoptosis, and the actual hair shaft factory, which is the so-called anagen hair bulge, the anagen hair matrix. And no surprise, what you see here is some -- is a phenomenon that perfectly supports what we had seen in terms of the hair cycle changes. Proliferation in the hair matrix is stimulated by this antibody against the prolactin and receptor and cell death, apoptosis is reduced. And note on the graph on the right-hand side, the blue bar, the impressive cell death protection effect of just prolactin antibody -- prolactin receptor antibody itself.

When we initially started with his work, and we discussed how to set up these experiments, I reminded our colleagues that 5 years after our initial paper, we had found in female scalp hair follicles, if you blocked the productive receptor with a drug that may not have been as selective as this new prolactin receptor antibody, the stem cells did not like it and went into apoptosis. Therefore, we were nervous to see what would happen here in male scalp hair follicles in the stem cell compartment, the so-called bulge.

And lo and behold, the stem cells loved it. The apoptosis actually went down when they were stimulated with this prolactin receptor-blocking antibody. And in the presence of prolactin, the stem cells even proliferated, divided more than in the vehicle control group.

That was an excellent news and is particularly interesting in a context of androgenic alopecia because androgenic alopecia has two driving factors. One, probably critical driving factor is that the follicle gets smaller and smaller due to missing inductive signals from the so-called dermal papilla at the base of the hair follicle. But the other contributing factor is that the capacity of hair follicles to generate daughter cells from these stem cells is diminished. So we looked at that, too.

And interestingly, if you just give prolactin, that's the green bar on the left-hand side of the slide, the number and the expression of these cells, that are daughter cells that are directly produced from these stem cells, gets reduced. And if you give the prolactin receptor-blocking antibody, this can be completely reversed. That is fascinating from an androgenic alopecia perspective because so far, we have no drugs that can really do that. So it appears that just blocking signaling through this one neurohormone receptor can restore the capacity of hair follicle stem cells to make daughter cells and thus keep the organ in its desired large size.

But that's not all. When I first saw this slide, I said, what is this antibody not doing? So it's actually improving the production of the key growth -- stimulating growth factors that the hair follicle makes itself. If you dump prolactin on male scalp skin, the green bars, then the production of key growth factor called Insulin-like Growth Factor 1, IGF1, goes down. And even that of another important growth factor, FGF7, Fibroblast Growth Factor 7, goes down. And that can be completely counteracted by adding the production receptor antibody. But even better, Insulin-like Growth Factor 1, the one growth factor that in human hair follicle keeps the follicle longest in its growth phase, is stimulated just by the antibody alone. That means that just blocking the prolactin receptor with this antibody increases the capacity of the hair follicle to produce growth factors itself with which it maintains and promotes its own growth.

Yes. And finally, we had shown before that you see this here again on the left-hand side of the slide that hair shaft production is stimulated by adding this antibody. And if you see this microscopically, you would expect that also the production of hair shaft keratins, proteins that make the hair shaft, is up-regulated and that's what you see in the graph on the center -- in the immunofluorescence microscopy images on the right that, that's exactly what happens.

So the antibody has the capacity to prolong the growth phase of the hair cycle and thereby reduce the daily hair shaft shedding that dermatologist call Telogen effluvium. But it, moreover, also promotes hair follicle stem cells themselves and specifically their capacity to produce new daughter cells and to maintain this. This would antagonize the androgenic alopecia-associated hair follicle miniaturization process.

And if this were not enough, the antibody also stimulates the follicle to make more potent growth factors itself and to increase hair shaft production. They're very impressive. I did not expect that when we started this. In reality, I was fairly skeptical that any of this would happen, but it did. And we repeated this in three donors and that's about the time point when you feel confident about your own data.

So in summary, we are looking here at an antibody that really blocks signaling through the prolactin receptor directly in human scalp hair follicles in intact human scalp, so in the target organ that we want to treat clinically. And it does this on multiple levels. It's on the one hand, keeps the follicle longer in anagen. On the other hand, it stimulates the production of growth factors that the follicle needs to remain in anagen. And finally, it even stimulates stem cells and their capacity to generate new daughter cells and also promotes hair shaft production. That is single neurohormone receptor antibody could do all of this is highly unusual. I did not expect it, and I'm quite impressed by this.

Until now, we discussed our data from organ cultured male scalp skin. But now it's time to talk about clinical trial data, where we go from ex vivo to in vivo. And this will be introduced by Denis followed by Professor Rod Sinclair from Melbourne.

Hi. My name is Denis Akkad. I'm VP of Research at Absci and Program Lead for ABS-201. Within my role, SVP of Research at Absci, I'm ensuring that the antibodies, which the talented AI and wet lab scientists create, have a seamless transition into the clinical development. Prior to joining Absci, which was an amazing opportunity in my career, I worked for a decade in big pharma across multiple indications. Spanning from heart, lung, kidney and endometriosis in women's health. My background is a trained biochemist with a PhD in neuroscience and also training as laboratory geneticist.

As you have heard from Andreas, the prolactin receptor ABS-201 is one of those rare occasions as a geneticist, where you really have these cases where human mutation guide you with regard to the safety profile, but also with the efficacy when we're looking into the mode of action. And I'm very excited to announce that we have dosed our first participant in our HEADLINE trial. The Phase I/IIa study aims not only to look into safety and tolerability as the main readout but also, we anticipate to have our interim efficacy readout in the second half of 2026.

At Absci, we always go big. This is why we have designed the ABS-201 HEADLINE trial in a way where we not only combine safety and tolerability, but also efficacy in a really fast way. So how do we do that? So basically, what we have thought about is how can we combine the preclinical readouts, which we have from the monkey study and the ex vivo study in a really nice clinical trial design. And I'll walk you through that, how we have outlined it.

The HEADLINE trial is a double-blinded placebo-controlled trial, which aims to enroll up to 227 participants with and without androgenic alopecia across single-ascending dose and multiple-ascending dose cohorts. Within the SAD portion of our clinical trial, where we are looking into up to four single-ascending doses in healthy volunteers, we will mostly assess safety and tolerability, but also immunogenicity and what is most important, pharmacokinetic profile. So how long is the half-life of the antibody.

We will then transition in the multiple-ascending dose portion of the trial, which has been designed in a way to be statistically powered to show hair growth efficacy throughout this treatment duration. What do I mean with that? When we're speaking about treatment [ desiration, ] what you have heard earlier from Andreas is that within this naturally-occurring androgenetic alopecia stump-tailed macaque model, those monkeys were treated for up to 6 months, and we are aiming to do so for the healthy volunteers.

So this means that the healthy participants are dosed over 26 weeks. And we will do a hair regrowth assessment at baseline at 13-week and then a 26-week and then look at the hair regrowth progression over time. Based on the engineered long half life of our antibody, we will follow up the participants for nearly a year. And within this follow-up period, we will further interrogate the durability effect of the hair regrowth.

The hair growth assessment is measured by taking global images from the healthy volunteers. But also what Professor Paus showed you, microscopic images of the scalp area where target area hair count, target area hair width and target area hair darkening is measured, in order to get from this quantified variables, regulatory-approved measures for efficacy assessment.

Aside of this quantifiable measurements, we will also have patient-reported outcome measures which are very important because it's one thing if you have really a numeric improvement, but it's really most important that the participant themselves feels or sees that there is improvement on the hair regrowth in order to have afterwards a quality of life improvement.

Of course, the next question is, when are we going to have our interims readout? As mentioned earlier, we are treating our participants with androgenetic alopecia over a period of 6 months. mimicking not only what we have seen in the stump-tailed macaque study, but also reflecting standard practice in hair growth trials. Within this 6-month period, we will have a baseline assessment and then an assessment of 13-week and then 26-week.

Now when are we expecting the first interims readout across all three multiple-ascending those trials? That will be as early as Q3, Q4 in 2026 and the '26 readout as early as beginning of 2027. These readouts are important and will guide us in our registrational trials moving forward down the line. The described Phase I/IIa HEADLINE trial will take place in Australia within the multisite setup. And we're super excited that one of the PIs will be Professional Rodney Sinclair, who is a world-renowned expert in androgenetic alopecia, and will talk to you more about ABS-201 and the HEADLINE trial.

My name is Rod Sinclair. I'm the Professor of Dermatology at the University of Melbourne and I've held that post for close to 20 years now. And over the years, hair loss has been my passion. I wrote my doctorate thesis on androgenetic alopecia in women. I've written multiple textbooks on hair loss. I've written the chapters on hair loss in Rook's Textbook of Dermatology and Bolognia's Dermatology textbook, which are the key textbooks that are used by dermatologists around the world in their training. And so they've learned a lot about hair loss through those chapters.

I've now published over 1,000 peer review articles that average over the last 10 years at about one a week. And we've done a lot of work in androgenetic alopecia. So I was involved in the publication of the first genes for male pattern baldness, which was the androgen receptor, and we did that through gene association studies. We also identified genetic linkage in female pattern hair loss with aromatase gene and the estrogen receptor gene. We have been involved in understanding the patterning of hair loss through epigenetic silencing of the androgen receptor on the occipital scalp. And we've also developed the main clinical grading scales used for female pattern hair loss known eponymously as the Sinclair Scale.

So my clinic here in Melbourne is one of the largest dermatology centers in the Southern Hemisphere. We have over 20 specialist dermatologists. We see over 70,000 patients per year, but we also integrate clinical research into our clinical practice. So we have one entire floor of our building devoted to clinical trials. We've done over the past 15 years, over 300 industry-sponsored clinical trials for pretty much all the major pharmaceutical players, and that goes from Phase I through to Phase IV. And in androgenetic alopecia alone, we've probably done at least six Phase III clinical trials, developing products for androgenetic alopecia.

So I've been interested in prolactin for over 25 years because one of my other roles has been as President of the Australasian Hair and Wool Research Society, which is a group that brings together scientists who do basic fundamental research on all mammals because, of course, the defining feature of mammals is hair, and bring them together with the clinicians, the dermatologists who are treating hair loss. And that's the sister society of the American Hair Research Society, which you might be familiar with.

But the work that I was introduced to through my role in Australian (sic) [ Australasian ] Hair and Wool Research Society centered around the way in which prolactin regulates the hair cycle in the possum. So the possum, of course, has seasonal molting. They have a winter coat and a summer coat and their transition from the winter coat to the summer coat is regulated by prolactin.

And what you've probably just recently seen in the fundamental research data presented by Professor Paus is that prolactin is a hormone that has many more functions than simply inducing lactation. So certainly, it's named because of its effect on women in their pregnancy in terms of activating their breasts to start to stimulate lactation. So it's a prolactin -- pro-lactation hormone. But just because it's named for one thing doesn't mean it doesn't do many other things. And the demonstration of prolactin is manufactured in the hair follicles, the demonstration that prolactin has receptors in the hair follicles is testimony to the fact that this hormone is involved in regulation of the hair cycle, doing things the people who were thinking of it as purely a lactation hormone hadn't previously turned their mind to. And it turns out that it's actually a really important hormone in the regulation of hair growth.

I think a lot of people have oversimplified the causation of male pattern baldness. Many people have simplified the causation to be activation of testosterone into dihydrotestosterone, dihydrotestosterone binding to androgen receptors in the hair bulb, that leads to miniaturization of the hair follicle and hey, presto, you go bald.

What we've been able to show is that the mechanism is actually much more complex. Before you start to miniaturize the hair follicle, you shorten the duration of the hair follicle growth cycle. And that is something that involves the cyclical regeneration of the hair follicles. So what most people are aware of is that if you pluck a hair, new hair grows out of the same follicle, what many people haven't realized is that if you don't pluck a hair, a new hair grows out of that same follicle and just pushes the old one out. And of course, the best example of that is that if you suddenly decided to start shaving your armpits, you see that the hairs are growing every day. But if you don't shave your armpits, they only grow so long and then the next hair started to grow, and it just pushes the old one out, which is, of course, a good thing, otherwise, we would have hairs poking out our sleeve.

So that regulation of the hair cycle is the first thing to change in the onset of male pattern baldness and that precedes the DHT-mediated miniaturization of the hair follicle in the hair bulb. And that shortening of the anagen duration is triggered by events happening at the top of the hair follicle near where the arrector pili or the goosebump muscle inserts into the hair follicle.

And the other thing that we've shown even more recently is that before you get miniaturization, you get disruption of the attachment of the muscle to the hair follicle. So in fact, that miniaturization of the hair bulb through DHT is actually a secondary and a late event in androgenetic alopecia. It's probably permissive and it probably affects the patterning of the baldness, but it's not -- it's overstating it to say that the DHT binding to the androgen receptor is the cause. And so we want to see the upstream events that cause the baldness. We're interested in the hair cycle changes, and that's where the hormones that regulate the hair cycle, such as prolactin, suddenly start to come into play. And that's where the focus, where the smart money is starting to look now.

What has started in Melbourne this week and will continue over the next 12 months is the HEADLINE trial, which is the Absci Phase I, Phase IIa clinical trial testing their novel monoclonal antibody in healthy volunteers with and without androgenetic alopecia. So the initial study is being conducted in the residential Phase I clinical trial center, which is about 2 kilometers down the road to the south.

And what we'll be involved in, where I'm going to be the principal investigator, is the Phase IIa study, investigating people with androgenetic alopecia. And this is a highly-regulated, highly-controlled clinical trial, all the endpoints have been clearly established and the endpoint center around high-quality photography. This is something that we've done before. It's something we've got great experience in. And I think I can honestly say we produce the highest-quality clinical photographs available for clinical research.

The recruitment is always a challenge in any clinical trial, but this is something that we've done before. And in fact, we've just closed recruitment on a trial with 140 participants for sublingual minoxidil in an androgenetic alopecia clinical trial. And so we're very confident that we can recruit the lion's share of participants for the next study. But of course, there are multiple sites and a competitive recruitment process. And the aim for everybody involved is to complete the recruitment as rigorously and as fast as possible with, of course, no compromise on the quality of the participants.

So the question on everybody's lips is, what gives me, as a dermatologist, confidence that this trial can produce a meaningful benefit for our patients. Well, the first step is I think we're moving upstream in the mechanism of baldness. We're moving away from being fixated on the hair bulb and the miniaturization of the follicle to some of the earlier events through the regulation of the hair cycle. We know from the animal models in, first of all, the possum that prolactin is involved in the relation of the hair cycle. We have seen experimental studies in the macaque monkey, and the macaque monkey is probably the only animal model that reliably predicts treatment effects in androgenetic alopecia.

And I think there's some tantalizing interest from the macaque monkey, where there was a suggestion that even after the trial finished and the dosing had stopped that there was some ongoing benefit. Now whether that happens in humans or not, we'll have to just wait and see. But I think there's a lot of excitement in the patient world around this mechanism of approach to the treatment of androgenetic alopecia. And there's a lot of excitement in the medical world to see how we can impact androgenetic alopecia, looking at a variety of different targets beyond the historical target of the 5alpha-reductase, the DHT, where the finasteride and related molecules we're focused on.

I was the principal investigator in the Phase Ib open-label study for Hope with their molecule HMI-115. And this was an intravenous study. And for Hope, my impression was that this study was a bit of an afterthought, and their main focus was around endometriosis, and they were interested in androgenetic alopecia as perhaps a secondary market. And based on their Phase I dosing, the doses that were selected for the androgenetic alopecia trial were probably a little bit too low. And the reason I say that is that the receptor occupancy with the biologic therapy in the animal studies with the macaque monkey, and of course, as I've said before, the macaque monkey is the most reliable animal model for investigating androgenetic alopecia, but the receptor occupancy in the macaque monkey studies was north of 90%. And whereas the receptor occupancy that was achieved in the HMI-115 Hope Medicine study, was probably somewhere between about 60% and 80%, but probably south of 70%.

In contrast, Absci have done some significant modifications directed by AI, and they've led to better tissue distribution, better pharmacokinetics and specifically a longer half-life, which is going to be attractive to the patients interested in pursuing this treatment. And we anticipate it's going to achieve greater than 90% receptor occupancy in the humans because of the dose they've selected. And as a consequence of that dose that achieves higher receptor occupancy in the humans, we anticipate we're going to get more hair growth than Hope achieved.

And so I will finish off here, and I'm going to pass you over to Professor David Goldberg, who is going to describe to you the significant unmet need for a hair loss treatment that really shifts the dial amongst our patients. This is something that everybody has been waiting for and David Goldberg is the man to tell you about it.

I'm Dr. David Goldberg. I am the Director of Clinical Research and Cos-Med Dermatology for the Schweiger Dermatology Group. We are somewhat less than 200 offices from coast to coast, in Midwest, Eastern Seaboard, Florida. I also run two fellowship programs in cosmetic dermatology through the American Society for Dermatologic Surgery. I practice cosmetic dermatology. We've done a lot of research in the area of hair going all the way back to the 1980s and '90s with topical minoxidil. We've done some of the studies on platelet-rich plasma for hair. We've done some of the studies on low-level light. We're currently involved in a trial for oral minoxidil through the FDA. I run meetings. I just ran a meeting this past weekend, called New Frontiers in Cosmetic Medicine, where we talked about the current prolactin studies, and we do a lot of research as well.

So the current standard of care for androgenic alopecia, frankly, is not very high. As I mentioned, I was involved in the topical minoxidil studies, it's known as Rogaine now. Everybody comes in on that. That's not a prescription. The numbers of people seeking treatment for hair thinning are staggering. If you look at men, it's by the time they're 35, people are complaining. Women, by the time they're 40. Women, actually, by the time they're 65, 80% of them complain of hair loss.

And yet, what do we do for them? We have them on topical minoxidil. That doesn't do a lot. We start talking about platelet-rich plasma and low-level light, in order to do that, they have to have their arms -- drawn blood. That's painful. It can lead to black and blue. We then take that blood. We spin it down in a centrifuge. And then we reinjected into their scalps. That's a painful procedure. They have to come into the office, it's done once a month. And although we do a series of usually four or five treatments, it really is in perpetuity, so they're constantly coming in.

On some of the men and some of the women, we give them what's called oral minoxidil now. It's not even FDA approved for hair loss. It's FDA approved for blood pressure. The dosages are really made for blood pressure, they're not made for hair thinning. Some people have problems with dizziness, dropping of blood pressure.

Some of the men, we give oral finasteride. That blocks testosterone, the hormone that leads to hair thinning, both in men and women. And the problem with that in men is some of them get erectile dysfunction. There is so much talk now on social media about suicidal thought patterns in men who are taking that drug. You get a sense that the treatment approach right now is just not optimal. And we currently don't have an ideal treatment for hair thinning. I mean that's just pretty obvious. If you look at surveys out there, less than 10% of people are happy with the current treatments we have.

And so what we want in a new hair treatment for hair thinning and hair loss is something that is convenient, doesn't have to be done that often. And it's got to be durable. Durable means they don't have to necessarily have an injection every week. They don't have to come into the office every month. Something that ideally, they can do at home. Maybe they'll start every week, but ultimately, maybe every 2 months, every 3 months, something along that line. And we now are on the cusp of a drug that potentially can do that. And this is such an exciting arena right now that I'm going to be discussing this at the end of January at a meeting called IMCAS Paris. It's the largest cosmetic dermatology, plastic surgery meeting in the world. There are some 20,000 people there. They all want to learn about this new product, this new approach, this prolactin receptor inhibition. It's a very exciting area.

So ABS-201 clearly is a game changer. One, it's a totally new mechanism. The fact that these hair follicles have these receptors and then ABS-201 now can block those receptors and convert resting and nongrowing, non-pigmented hairs into thick, terminal growing, darkened hairs is revolutionary.

So as I mentioned before, we currently are involved in FDA studies for a longer-lasting minoxidil products, allowing the higher doses to be given, hopefully safer than is what currently available on the market. But in the end, that doesn't work the way ABS-201 works. The way minoxidil works is it dilates blood vessels in the area of hair, it gives them more nutrition. But it's not a direct impact on the hair. That's number one. Number two, that's going to require compliance. People have to take pills twice a day.

What's exciting about ABS-201 is how often people are going to need the drug. We're looking initially at maybe two to three injections over the first 6 months. But think about it this way, growing hairs. They're called anagen hairs. They last for a couple of years. And so if we get those injections, two to three, over 6 months, and then we're back in that growing hair stage, people are not going to do injection -- do injections very often at all.

With the excitement behind ABS-201, I cannot help us think about my own personal practice and where I am with Schweiger Dermatology. As I mentioned, we're talking about slightly under 200 practices coast to coast. We're the second largest dermatology group in the country. We have over 2 million patient visits every year. Roughly 10% of people coming in, come in for hair thinning. I can only imagine the commercial market we're going to have once ABS-201 comes onto the market.

So we recognize what role ABS-201 can play in our huge dermatology practice. But it would be nice to now hear something about the commercial development of this product. And with that, I'll pass it on to Mike and Zach.

Good morning, everyone. My name is Mike Jafar and excited to be here and appreciate the Absci team for inviting me. I've built my entire career and have been fortunate to be around great people and great brands in this cross-section of medicine and aesthetics, I've had a chance to scale, build from 0 to 1, acquire and just be part of an organization at the time called Allergan, now AbbVie that owned many of these assets like Botox and CoolSculpting and Juvederm. Also was the Chief Commercial Officer for a public company called Evolus who had a wonderful product and frankly, the first product to compete against BOTOX called Jeuveau. And took that company from a 0 to few hundred million in revenue as we scaled the company.

At the time that we spent at Allergan developing the LATISSE business, we started to learn a lot about hair, right? And hypertrichosis was a thing, and we started to talk to trichologists and dermatologists that really understood hair. What was really hard at the time was to find an asset that impacted so many people in America. And that drove this definition of the last frontier that we were always looking for, at least at my time in Allergan.

If you look at just hair loss in general, nearly 1/3 of Americans are impacted by this. And it has a massive psychological impact, clearly, it has a visible impact. It's one of the few things that impacts both men and women, kind of akin to weight loss. So just the idea to address this from a true scientific standpoint with a novelty product and a novelty target, I think, has such mass commercial appeal.

The limitation and why this category has been so hard has been driven by the lack of efficacy, frankly, and/or an experience that many don't want to go through. So if you look at just the consumer base today and what they're willing to do, clearly, they are willing to be on topical meds for the rest of their life, systemic products. They're interested in surgery. Some are flying to Turkey. I mean this is such a profound need in the marketplace.

But unfortunately, it all comes with massive drawbacks, whether it's systemic side effect or the experience of a hair transplant, the stigma behind surgery even despite going to the far -- the greatest lengths of surgery, you still have to maintain and be on these topical drugs that many people just don't want to be. So it's just been a high burden for, I'd say, decent or mediocre results at best, and the opportunity here is to reframe this.

If you look at what patients and clinicians are seeking for just better treatments, right, significant hair growth, durability, safety, especially around side effects and then conveniency. The idea of taking daily administration of drugs that may have an impact on sexual dysfunction and may have an impact on a host of things, systemically, it's just not appealing to the masses, which is why I feel like there is a greater cohort sitting on the sideline looking for something like Absci is a project that we'll discuss today.

So if you look at the ABS-201 target product profile, the opportunity to deliver a blockbuster drug, if the following tenets are mad, I think is the exciting part. Right now, we sit on oral minoxidil as the gold standard. So ABS-201 has to be greater than oral minoxidil when it comes to hair growth. Durability is critical. The idea of taking something and however it's administered, lasting for a few years, is clearly an unmet need and a driver of growth. Safety and efficacy is nonnegotiable, right? And then lastly, a subcutaneous injection once, twice, 3 times over the course of the year, lasting for 2 to 3 years would be ideal.

So if you look at the ABS-201 target product profile as it compares to what's out in the marketplace, minoxidil, finasteride, topicals, orals, PRP. It is the only target product profile that exists in the marketplace that allows you a few interactions with long-range durably. Taking a few thousand pills over the course of 3 years is not that exciting for people, right? Going in for PRP 4 to 5 times a year, every year and getting an injection upwards of 30 to 40 times on your scalp is not terribly appealing, which is why you see a massive drop-off rate when it comes to PRP.

So from an efficacy standpoint, here's what the market has come to, call it, trade-off. You got convenience and comfort on one side and then you have performance or, call it, outcomes and growth on the other side. Ideally, you want to be in the top right, super convenient, extremely comfortable interaction with any product with tremendous duration and/or outcome, right? That is the target product profile design. That's where you want to be. Unfortunately, the only option today for most consumers is either uncomfortable, high frequency or minimal outcome.

I feel like my time at Allergan, we always used to say body contouring was the next frontier and then came along. CoolSculpting now Ozempic. But in the background, the last frontier truly was hair, and it's so wonderful to be part of this project with Sean and Zach and the Absci team. So thank you for having me.

I'm Zach Jonasson. I'm the CFO and Chief Business Officer at Absci. Today, I'm excited to share some results from our market research. We started this process by interviewing both clinicians as well as patients and then commissioned a consumer research survey in the fall of this year. This survey included 610 participants about evenly split between males and females. They were all U.S. adults 25 to 59 years old with an income exceeding $75,000 a year, including some disposable income. And all of the participants were experiencing and bothered by hair loss or hair thinning.

The objectives of this survey were to assess attitudes about hair loss. As well as survey the psychosocial impacts of hair loss. We also looked at consumer sentiments around current standard of care and we explored interest in the ABS-201 target product profile, including willingness to pay premium for such a TPP.

So we're going to share a few results from this study. To level set, we ask patients about the impacts of their hair loss on their psychological well-being. What we found is 80% of men and 81% of women registered strong negative psychological impacts from their hair loss, principally feeling less confident, feeling like they looked less attractive and also feeling like they looked older than their actual age and generally feeling self-conscious in social situations. These results correspond to the patient testimony as you heard earlier today from Kelly and Landon. And are a strong motivator for why these patients seek treatments.

We also asked respondents about their interest level in the ABS-201 target product profile. And here, we see a vast majority of both males and women were highly interested. In fact, 87% of men surveyed said they were extremely or very likely to ask a health care professional about procuring the ABS-201 product, if it were available. Similarly, 69% of women so that they were extremely or very likely to seek out ABS-201 from a health care professional.

We also wanted to evaluate the interest level of patients who are currently taking a standard of care therapy in ABS-201. And here, the results are even more exciting. Patients that are on a current standard of care therapy were even more interested in contacting a health care professional about ABS-201. For example, 90% men currently taking topical minoxidil, said they were extremely or very likely to contact a health care professional about ABS-201. 92% of men currently taking oral minoxidil, said they were likely or very likely or extremely likely to contact an HCP about ABS-201. And finally, 97% of men undergoing in-office procedures, such as PRP or hair transplantation, said they were extremely or very likely to contact an HCP about ABS-201.

Similarly, with women, we see 76% of women who are currently taking topical minoxidil, said that they were extremely or very likely to contact a health care professional about ABS-201. That number goes to 89% of women who are taking oral minoxidil. And finally, 88% of women who are undergoing in-office procedures, such as PRP or hair transplantation, said they were extremely or very likely to contact a health care professional about procuring ABS-201.

Now these results underscore two important points. First, the standard of care isn't cutting it. patients are dissatisfied with current treatment options. And secondly, the strong interest in the TPP that ABS-201 offers.

We further asked respondents about their interest in using ABS-201 as first-line therapy. And here, the results are very exciting. 37% of men said they would try ABS-201 as their first course of therapy to treat AGA and 36% of women said they would try it as a first line.

The key takeaways from our consumer research, including the survey we just discussed, are number one, we confirm the significant unmet need that exists today, which is driven by the psychological impacts from hair loss. Number two, the overall high level of interest in ABS-201 and the potential for it to become first-line therapy for a significant share of both male and female AGA consumers. And number three, although we did not discuss the results from the questions pertaining to pricing in our survey, we found that there was a significant share of men and women respondents who are willing to pay a premium for the ABS-201 target product profile.

Using data from our consumer survey as well as demographic data, we were able to construct a classic patient treatment funnel. Here at the top of the funnel, we start with the total estimated AGA population in the U.S. of 80 million. We then cut the funnel according to income. Here we're looking at the AGA population that would have an income greater than $75,000 a year, and b, within the age bracket 17 to 69 years old. That brings the funnel to an estimated 39 million.

Then we further cut the funnel according to the AGA population that is concerned and motivated about treating their hair loss. That brings the funnel to an estimated 26 million U.S. consumers. The next cut of the funnel considers the interest level in the target product profile of ABS-201 based on our consumer market research survey. This brings the funnel to an estimated 22 million to 24 million AGA consumers.

The final cut of the funnel is constrained to AGA consumers with the highest interest in the TPP and willing to pay premium pricing based on our survey. This brings the funnel to an estimated 15 million to 18 million patients. Now if we assume 2 to 3 years of durability of the ABS-201 treatment, this would imply 5 million to 9 million patients are treated each year. At that level of treatment, we estimate a total available market in the U.S. of greater than $25 billion and a potential TAM of greater than $40 billion globally.

We're also pleased to see that the go-to-market channels are already in place. 80% of consumers that seek hair treatments already go to our target market channels, principally dermatologists, med spas and plastic surgeons. So as we think about a potential FDA approval in 2029 or 2030, we believe we're well positioned to ramp into this market. There are currently over 30,000 of these locations when you consider dermatologists, med spas and plastic surgeon offices across the U.S. alone.

More broadly, we believe we have a strong strategy to capture and expand the ABS-201 total available market. We're starting from a position of strength. There's a massive, motivated patient population with high unmet need and with high interest in the ABS-201 TPP based on our survey results. There's also a robust practitioner market channel already in place, encompassing the derm offices, plastic surgeons and med spas. And as we think about going forward, once the product is approved, we'll be focused on creating viral awareness and direct patient engagement. We'll also be looking to leverage our first-mover advantage to create an iconic brand to further protect and grow our market share.

Finally, longer term, we look to expand the market by going direct-to-consumer. We're excited to leverage both the strategy and the market infrastructure built by the GLP-1 players. And when we look at that playbook, post-market, we'll be focused on creating viral awareness of ABS-201 that can drive more patients to clinicians, hence driving more demand and more revenue. We will also be looking to build direct patient engagement, which can enable further expansion of the market in a direct-to-consumer fashion.

Altogether, we're very excited to advance ABS-201 through clinical development towards approval. We believe this therapy can be category-defining and address the significant unmet need that exists in the AGA population today. And with that, I'm happy to turn it back over to Sean.

Thank you, Mike and Zach, and a huge thank you to Dr. Rossi, Professor Paus, Professor Sinclair and Dr. Goldberg for sharing their time and expertise with us today.

I want to close by connecting the dots on what we've heard over the past hour. We started the session grounded in the reality of the patient experience, and I want to sincerely thank Kelly and Landon for being so open with their personal stories. Hearing Landon, an elite athlete and a soccer legend and icon, talk about his hair loss experience and how that's impacted him really drives home the point that Dr. Rossi made earlier today that this is not just a cosmetic issue. It deeply is tied to identity and our mental well-being, regardless of who you are or what you've achieved.

From that foundation, we went deep into the science. We saw the biology with Professor Paus and Professor Sinclair validating the prolactin receptor mechanism as a master switch of hair regrowth. We saw how ABS-201 is uniquely engineered to unlock that pathway. And finally, Dr. Goldberg, Mike and Zach made the commercial reality clear. The bar for success is defined and the market opportunity is effectively uncapped for a drug that delivers durable efficacy with a clean safety profile.

For Absci, ABS-201 represents exactly what we set out to do as a company. We used our generative AI platform to identify a high-value biological target and designed a best-in-class biologic to address it faster and more precisely than traditional methods allow. We are incredibly excited that we have started the trial this month and already have enrolled our first cohort with the protocol, Dr. Sinclair and Denis outlined, we have a streamlined, efficient path to a proof of concept. We anticipate showing an interim efficacy readout in the second half of next year. We look forward to updating you as we progress through the clinic and ultimately to sharing the data, we believe will transform the standard of care for patients like Kelly and Landon and millions of others.

Thank you for joining us today, and thank you for your continued support of Absci.

[Operator Instructions] Our first question comes from Vamil Divan with Guggenheim.

Sorry about that. Can you hear me now?

Yes, we can hear you, Vamil.

Okay. Sorry about that. So I just had a couple of questions more on sort of the commercial side of things. And you mentioned the sort of pay for performance that people are willing to pay for. And I'm curious, just given the nature of this product, and I guess you'd be paying upfront and then getting the benefit over time, would there be -- are you thinking about some sort of almost like a value-based pricing where people pay upfront and then sort of depending on how they respond is kind of what they're paying? I'm just trying to get a sense because I'm assuming it'll be a relatively large upfront cost that people would be having to put up for that.

And then the other question I had was just around some of the market research, which was very helpful, so I appreciate you sharing that. I know there was like a little bit of a difference, I think, very strong interest from men and women. But for men, it's like 90%. For women, I think the interest in talking to the doctor, but it was around 70%. So a little bit of a difference. I'm just curious there anything you saw in the research that's showing differences in how men and women are reacting to the potential target profile here?

Thank you, Vamil. I think one of the things that came as no surprise to us as we had talked with KOLs were just the immense impact that this has on both men and women. Men and women look at it slightly differently. One of the things that women really care a lot about is seeing the hair in the drain when they shower versus men, it's losing the hair in the front area of the scalp as well as just wanting to be able to regrow that.

And in regards to the commercial side of things, I'll hand that over to Zach and Mike to get that perspective on that. Zach, do you want to start off?

Sure. Thanks, Sean. So Vamil, one other point. When you dig into the numbers of male versus female in the consumer research study, one thing that's important to point out is if you look at women that are actually already taking a standard-of-care treatment, those numbers are very similar to men with respect to their interest level in ABS-201. And we also see very similar level of excitement about using ABS-201 if it were available as first line. So we think the survey data is tremendously strong, supporting the TPP and how well we see this is going to be in the marketplace.

As to your question about financing plans and how you might structure payment for ABS-201, I think it's too early for us to really go through that. I will say we do believe longer term, there will be ways to do financing plans around this and spread-out payments for patients. But in our survey, we really didn't test those assumptions and whether that would further expand interest. We really presented it as a -- in the pricing portions as an upfront cost. And I think patients were able to compare that to what it would cost for other standard of care and also compare with the efficacy and durability would be relative to other standard of care.

Mike, If you would like to comment as well?

Yes, happy to complement this. Keep in mind that the consumer today, if they're going in for CO2, and the physicians on the phone can speak to this, or body contouring, they're paying for something that has prolonged effect, not immediate effect. And so I think the mindset of the consumer to exchange money for a procedure and then watch the effect happen over time is not a foreign concept in our category. It happens daily.

If anything, you would probably ask for a refund after a CO2 treatment because the first 3 to 4 weeks are frankly -- the experience is not optimal. Same thing with body contouring, when managing the body contouring CoolSculpting business, you would take several thousands of dollars, and you would tell the consumer that the effect will happen over time. So -- but the mindset of the consumer is already there.

Sean, if I can comment at this point?

Yes, absolutely. Go for it, Dr. Goldberg.

So Vamil, you and I have talked about this a little bit as well before. Two things. One, patients coming in for PRP injections, which is really our standard of care now, forget about the fact that they have to get the phlebotomy of their arm and injected multiple times in their scalp and it's a pain in the neck for them. They're paying, I mean, in the Midwest, maybe $1,000 a treatment. I'm in New York and New Jersey. It's $2,000, sometimes $3,000 a treatment. They're paying good, good money right now for a treatment that does very, very little. And so it's not hard to extrapolate from that to figure that they're going to pay for this.

The other comment I want to make is I -- listening to some of the data out there, for someone like me who runs a very strong FDA research program on multiple treatments for hair, some 30 -- I think the numbers I heard 37%, 38% of people, if offered ABS-201, would jump to it. And I find that number remarkably high because this is a drug that's not on the market at all. We have so much trouble getting people into any of our studies because it's new. And our success rate, some of the other things we do, getting people in the studies is really under 10%. So the fact that 37%, 38% of people, given the option to use ABS-201, would use it, tells you how difficult this market is right now.

Our next question comes from Brendan Smith with TD Cowen.

Can you hear me? This is Jacqui on for Brendan. As much as I'd love to ask Landon Donavan a question or two, I'll just stick with just one for you guys. And I know you've mentioned that there's plenty of room for multiple players within the AGA space. And given the size and the unmet need, and you've demonstrated that great today.

That said, I'd be remiss to not bring up Cosmo Pharma's recent Phase III data, which demonstrated significant improvements in their hair growth over placebo. Obviously, these are very different MOAs. And you've also spoken to the DHT and androgen receptor targets today as well. But assuming clascoterone does make it to market, could you walk us through what the patient split might be? Which patient types are more likely to choose ABS-201 over a topical solution? And sort of what the dynamics may be around that competitive lineup?

Yes, it's a great question. If you look at the Cosmo data, I'll hand it over to both Denis and the KOLs on the line to speak to this, but the percent increase was to baseline. And if you compare that to minoxidil, it's right in line with minoxidil. So it doesn't seem like there is much of a benefit compared to current standard of care. But Denis and Professor Sinclair, Dr. Goldberg and Dr. Rossi, please feel free to chime in as well.

Sean, happy to do so. As Sean mentioned, it seems to be rather a safer option as finasteride from a topical administration and this 500% or 300% sounds initially very, very significant. But it's -- if you average it with high variability across the trial of approximately a threefold, which compares to minoxidil effect. So -- but basically, we see that, as Sean outlined also as potential complementary. If any of the KOLs want to chime in...

Dr. Sinclair.

I'd just to add to that, I think what clascoterone seems to be comparable to is the topical minoxidil rather than oral minoxidil [indiscernible] that's [ weak ]. From a price comparative point of view, it's not something I would be investing -- have legs. We'll have to wait and see the actual [indiscernible] describing it as a [indiscernible]

Yes. The Cosmo data, I mean, if you look at it, the idea behind this is to have a topical form of finasteride if you will, without the potential side effects. But it really looks as an alternative to topical minoxidil. I look at it as an adjunctive treatment. I think there will be other adjunctive treatments as well, but I don't see this in the same place as ABS-201.

And we know from other topicals that compliance is such a limiting factor of daily use and such, and patients are just not great with compliance on topicals. And for most of us, we're treating hair in a multi-modality fashion. So while we have our systemic medications, we also supplement with topicals if the patient is even willing to do topicals.

Dr. Sinclair, do we have you back online, you were cutting in and out there?

Yes. I think it jumped on the WiFi. So I think I'm back now. I can hear you and hopefully...

Perfect. Do you maybe just want to repeat what you said? I think you were cutting in and out there.

So what I was saying is that my interpretation of the clascoterone data is that it was a comparison to the topical minoxidil, not the oral minoxidil. The way they've presented the data as a percentage increase isn't really comparable to other forms. It should be presented as an absolute hair count change. And so I'm very skeptical that clascoterone is going to be an effective treatment. And it certainly wouldn't be something I would personally invest in. I think it's going to have hairs on it, so to speak.

Our next question comes from Gil Blum with Needham.

Can you hear me?

Yes, we can hear you, Gil.

So just a couple of quick ones from us. Considering there is a study was conducted in endometriosis, is there any anecdotal evidence from that study of hair regrowth in the women treated?

And maybe a more general question as to the study data cadence, will we have any reports out of the SAD portion of the study ahead of the larger data set in the second half?

Right, Gil, I can answer that first question. So we do plan to have a safety readout on the SAD prior to the 13-week efficacy readout in the second half. So be on the lookout for that. And with regards to the first question, Denis and Andreas, I'll hand that over to you.

Yes. Happy to take the question. So unfortunately, there is no information on the androgenetic phenotype in women reported in the endometrial trial. We were also looking forward to see some anecdotal outcome, but we will have to wait for our trials to see an effect.

Our next question comes from Brian Cheng with JPMorgan.

Can you hear me?

Yes. Loud and clear, Brian.

A couple from us. Just want to pick your brain a bit on the setup for the Phase I/IIa trial. What do you want to see across the three doses in the MAD portion that you've selected for hair counts and also hair width? And then we have a quick follow-up.

Yes, it's a great question. So the PPP slide that Zach went over, what we're looking to achieve is at the higher end of oral minoxidil, potentially up to what you see in a hair transplant. We see that as ultimately being a win in terms of total area hair count. And Denis, please feel free and as well as Dr. Sinclair to give you a perspective on this as well.

Yes, absolutely. Maybe also tying it back to the topic, which Rodney touched upon about with receptor occupancy. So the doses have been selected in a way that we can see a dose response relationship to really then define for the later clinical development, the efficacious dose we want to then further test into the bigger cohorts.

Rodney, do you want to add something to that?

So I suppose as a comparison, oral finasteride grows around about 20 hairs per centimeter and minoxidil foam grows about 16 hair per centimeter, the lotion is a little bit more than that. But oral minoxidil is looking to grow around about 30 to 40 hairs per centimeter. Hair transplant somewhere between about 25 and 30 hairs per centimeter, you can't pack them much closer than that. So I think we want to be in the range of north of 30 but ideally north of 40 hairs per centimeter. then you'd have a very, very strong market comparison.

And then the other thing, of course, is there's the hint in the macaque monkey studies of longevity of the response. If you can actually demonstrate that with studies, and that will take a little bit longer, of course, if you can actually generate a sustained response after they've completed the dosing then that's also going to make it attractive for people who want to move away from having to take a daily...

And then if I can just add one more. Just on the subcu versus IV dose formulation here, how should we think of the subcu dose range in relationship to the IV doses that you have selected?

That's a really great question. So the IV dose is mainly to establish really safety and tolerability where you have really 100% bioavailability. So you really establish this fundamental foundation for your clinical development. And with regard to the subcu dosing there, this is also the later intended commercial route of administration where we will see also the profile of bioavailability after subcu administration. And then together with the PK profile, which we obtained we can then determine at which dose we see really the best hair growth efficacy in combination also with the dosing interval down the line.

And we are currently at 200 mgs per ml and that will be the commercial subcu formulation. So that will be tested in the MAD. And what we saw in the NHP was greater than 90% bioavailability for that subcu formulation.

Our next question comes from Debanjana Chatterjee at Jones Research.

Do you guys hear me? So can you please confirm if the ex-vivo experiments were performed on hair follicles from healthy male donors. And if so, how do you think the findings would translate into like patients with established AGA? And I have a commercial follow-up.

Yes, absolutely. Professor Paus, do you want to answer that?

Yes. Actually, that's a brilliant question. So when we do these scalp skin organ cultures, they have to be done in an anonymized fashion. And so we are not allowed to know anything about the skin other than where it is from, age and sex, but it was all from the temporofrontal region.

And if you look carefully at the gentleman here in this Zoom call, they all have androgenetic alopecia in the frontal temporo region. So the likelihood that the three donors we investigated all had that too was extremely high. But you're absolutely right, we can't 100% guarantee this. So in theory, they were healthy because we are not allowed to know whether they had AGA. Does that answer your question?

Yes. And maybe thinking about the commercial...

And professor, I was just going to add one other piece. We didn't share this data, but I think it would be good for you to speak to it is actually in each of those patients, what we saw from a prolactin receptor profile and what that looked like.

Yes. So there were also individual differences in the prolactin receptor expression profile, which is to be expected. Basically, every hormone receptor that you look at show individual variations. And yet despite these substantial prolactin receptor expression differences between these three donors we looked at, we had significant and reproducible responses throughout these three donors.

Now three donors, there's nothing compared to the hundreds of patients that are now going into clinical trial, right? But that's what you can do at the preclinical level. But since we have run these preclinical trials for a very long time, if we find such reproducible results within three different donors, for us, this is very, very encouraging. And remember that what we are looking at is the human target organ itself. It's not some mouse model, not some monkey. We are looking at real frontotemporal human scalp skin. And to see such reproduce data is actually at the level of preclinical research, highly encouraging.

Great. And are there any additional hair loss conditions where you think modulating the prolactin signal could offer therapeutic benefit outside of AGA?

Go for it, Denis.

That's another great question. Of course, we are also exploring the space where this mechanism could hold true. Another area could be, of course, alopecia areata based on also Professor Paus mentioned. The role on prolactin on immune modulation. So we are conducting preclinical studies and will, of course, explore different indications, but also dermatology areas, maybe Anthony or Mike want to share some thoughts there, too. But I just wanted also to briefly mention that with the donors, even if one of the donors or two of the donors might not have AGA, they are really promising because that also shows you that this mechanism works in healthy skin and will likely most work even better when prolactin is a driver of the phenotype.

Dr. Paus, do you want to mention the skin -- yes, go.

Yes. So additional indications in skin, if you remember the stem cell data, we showed, so as you know, there are very nasty hair loss disorders, which actually increasing in incidence and prevalence, particularly frontal fibrosing alopecia. And these hair loss disorders are caused by depletion of hair follicle epithelial stem cells.

So if you now have a new antibody that protects these hair follicle epithelial stem cells from cell death and keeps them in a better position to produce daughter cells as this antibody seems to be doing, you might actually have a new therapy that could be at least used as an adjuvant therapy in this very nasty form of hair loss, frontal fibrosing alopecia. Many patients affected, to whom we have fairly little to offer these days.

If I might chime in also, another indication is going to be Telogen effluvium.

Absolutely. Because that's what our data support, right, that anagen gets prolonged. Anything that prolongs anagen will be a wonderful treatment to suppress Telogen effluvium. If the durability of the effect is as long as initial data seem to suggest then that will be wonderful news. So with one or two shots of the antibody, you could have a very long-lasting Telogen effluvium reduction. And that is often the first symptom that brings the patient to the dermatologists that they find this increased hair shaft shedding. And increased hair shaft shedding, that is Telogen effluvium.

If I can extrapolate that one step further. We're seeing so many people now in the GLP-1 agonist coming in also with hair loss. And whether that's a Telogen effluvium or what exactly is going on there, I don't think we know. But to me, I know as this drug comes to market, when those people start coming in, complaining about volume loss, lack skin, they're often complaining about hair thinning as well, and they're going to go right on this injection.

Very true. 10% to 20% actually of these patients on the drug are complaining about Telogen effluvium, yes.

And like frontal fibrosing, there are other scarring alopecias that are -- really have a paucity of any treatments available. So it would be amazing to actually try this in that -- in those.

The next question comes from Morgan Gryga with Morgan Stanley.

I'm calling in for Sean Laaman. So we've seen in preclinical studies for ABS-201 potential re-pigmentation effects too. How could that present potential upside for ABS-201 in this market?

Yes. It's a great question. And actually, that's a piece of data that was not shown, but we did generate, which was a very promising. Professor Paus, do you want to talk a little bit about the melanin data that we got from the ex vivo?

Well, so the verdict on that is still out what the pigmentation effect in a hair cycle independent manner is, but there seems to be a stimulation of the hair follicle pigmentary unit. One thing one needs to keep in mind whenever a gray or white hair follicle gets re-pigmented that can only happen in anagen, during the growth phase.

So it's an absolute prerequisite for any kind of re-pigmentation of gray hair that the follicle stays longer in anagen and reactivates its pigmentary unit. And the initial data that we have from these preclinical trials would suggest that even that the antibody might be able to do, but we have to shore up this evidence to be more certain about that.

Our next question comes from Charles Wallace at H.C. Wainwright.

And a little bit of color, if I may, on the HEADLINE Phase IIa design, regarding later clinical development, would you need to do an additional -- or what additional trials would you need to do? Would you go into a Phase IIb or directly into a Phase III? And then also, is there a precedence to keep males and females in separate cohorts or even separate studies?

Yes, it's a great question. So in this current study that we're doing, we do have females in the SAD to enable the Phase II study that will start in Q4 in endometriosis. And we do have optional cohorts in the MAD that we're planning on filling. And the depending on how the trial goes, our plan would be to have a registrational trial after this.

Denis, I don't know if you have anything -- Denis or Zach, do you have anything else to add regarding the plan there?

Sure. Happy to expand on what you already perfectly alluded to is that if everything goes well, especially when we're looking at the male participants, the additional pieces which are then missing is a long-term safety database. And so you could envision directly proceeding in a combined Phase II/III study design to have an accelerated clinical development setting.

Great. And then a follow-up, if I may. So on the proof-of-concept data that's coming out, what differences should we expect to see between the 13 weeks and at 26 weeks? And then also on this, would we get any idea of the potential re-pigmentation from these readouts?

Denis and then Dr. Sinclair.

Yes, sure. Happy to give a first stab at it and hand it over to Rod. So basically, when you look at classical hair regrowth trial, each mechanism has a different rate of how the hair grows, some are steady, some plateau. So of course, we anticipate, as you have seen from the NHP data that we have a continuous growth, but we are looking forward to see initial differences at 13 weeks, which can then early guide our next clinical steps. But of course, we anticipate that at 26 week, the amount of hair has grown and will then even be bigger than compared to placebo. But Rod, maybe you have also an additional perspective.

Sure. I think that the trajectory of growth is going to be very similar to what we've seen with minoxidil. So with the finasteride where you work from the bottom up from the hair bulb, up the hair follicle, the peak improvement in hair count was about 12 months, whereas with minoxidil, the peak improvement in hair count was around about 16 weeks, and a lot of the minoxidil trials have been focused on 16 weeks.

I know Veradermics recently released their Phase II data, and they showed about -- I think it was about 30 hairs per centimeter at 2 months and 40 hairs at 4 months. That's similar to what we've seen with the sublingual minoxidil data, which is not yet publicly available. And so I think that's the sort of trajectory that we would be hoping to see with the prolactin.

With regards to hair color, this is probably the first time that we're looking at hair re-pigmentation through a clinical trial. We originally did studies in twins in gray hair. And it was very hard to do because when we were just looking at people from a distance like through the Zoom, the perception of graying of the hair is very much influenced by hair length. And so I know that if I let my hair grow longer, it goes a bit dark and then I get a haircut, it suddenly goes all gray.

And so now we're doing the hair colors with phototrichogram. So we're going to get a much more accurate reading and it's going to happen much quicker. And I think this is probably, to my knowledge, one of the first studies we're actually investigating hair color. We've seen with minoxidil some very soft observations that it delays graying, but it's not as significant in terms of reversing graying. And I can say that from personal experience, having been on oral minoxidil for over 12 years and I've gone very gray. So minoxidil doesn't do it. We'll be interested to see whether that the Absci molecule does.

Great. Yes. I know my mom would be one of your first customers if that's the case.

The big customer for gray hair is Southeast Asia. So whilst it's universal amongst women on this planet that they don't like gray hair, gray hair is very largely tolerated by men in Western societies. But in Southeast Asia, gray hair has got very low acceptability. And so all the men in Southeast Asia, that's a huge market.

And in the Arab countries as well.

Maybe it's noteworthy that we are all excited about re-pigmentation. However, this is not baked into our case. I think we should point that out at this point.

Our last question will come from Anna Li with Truist.

Can you guys hear me?

Yes.

This is Anna on for Kripa. For Dr. Sinclair, one question. Besides the dose selection, could you also talk about any key trial design differences between the HMI-115 Hope trial and the HEADLINE trial? And I have a follow-up.

So the Hope trial was an intravenous study. This is subcutaneous. This is sort of staged in two phases. The Hope study was an open-label study. So all the patients received active medication. This is a subcutaneous study. There's different dosing cohorts, there's men and human, I suppose the Hope study also had male -- men and women as well. But this is a much larger study.

In terms of the primary endpoint of the study, still centers around target area hair count. Secondary endpoints are target area hair width and global photography and patient-reported outcome measures. But everything really centers around the target area hair count in pretty much all the hair studies. All the others are nice to haves rather than must-haves. We really want to see significant improvement in the target hair count of [indiscernible] hairs.

Yes. And to expand on what Rodney mentioned also, we have also included in our target area hair darkening, although, as rightfully Andreas mentioned, we have not baked it into the case, and we are still looking into this phenomena too. And then we are exploring way higher doses, for example, in the clinical trial to really address this receptor occupancy and efficacy topic than the Hope Medicine studied it. So we really believe that with the current clinical design, we will be able to bring the best out of this mechanism.

And any expectations for kind of that safety SAD readout besides kind of looking at half-life, any potential safety concerns? I know there's like some theoretical concerns of prolactin suppression with like immune bone loss, anything like that?

Denis, do you want to speak to that and Dr. Sinclair after that.

Yes. Sure, happy to do so. So as you have heard from Andreas initially, so this mechanism is really one spectacular where we have the human genetics showing really a favorable safety profile. So the affected individuals are healthy. We also have phenomenal toxicology data so far from a preclinical toxicology. So where you have really to test high doses of the drug in NHPs. And then you also have the precedence of anti-prolactin in receptor inhibition in clinical trials, where also at very high doses, the participants showed no adverse events.

So all taken together, we are pretty confident moving forward. Nevertheless, we have -- always, of course, the safety of the participant is our highest priority, and we will record any observations throughout the clinical trial. And also, Rodney will have a close eye on the participants here.

Yes. I think that -- and from memory, the molecule doesn't cross the blood-brain barrier, so that you've got no central effects. And that's going to mean that there's going to be less interaction with the natural functioning of prolactin and its regulation. But like any clinical study, there is a whole stratified program going through the Phase I, II and III, where any side effects will be closely monitored. There's nothing -- there's no red flags at this stage. But certainly, it's the same with any new module that there's a process to go through. And there's no guarantees until you've finished the process.

This concludes the Q&A section of the call. I would now like to turn the call back to the Absci team for closing remarks.

Well, first off, I just want to thank everyone for joining. I hope that this was educational from both a scientific perspective as well as a commercial perspective and want to thank the wonderful KOLs that joined today and gave their perspective for joining and look forward to sharing the clinical data along the way, both with the SAD and then the upcoming MAD POC 13-week.

This concludes today's call...

And with that we will conclude the call.

Thank you for joining us. You may now disconnect.

It's my pleasure to now introduce Sean McClain, CEO; and Zach Jonasson, CFO of Absci Corporation. Just a reminder, there will be a 20-minutes presentation following with 5 minutes Q&A. Thank you.

Thank you. I'm Sean McClain, the Founder and CEO of Absci. We are a generative design company focused on using AI to really tackle some of the hardest problems in drug discovery, being able to go after some of these undruggable targets that have known biology that traditional approaches have been struggling to ultimately drug. Now if you look at AI drug discovery over the past few years, there's been a lot of companies that have been emerging. And they talk about new model improvements and ultimately, what the efficiencies of these models are. But at the end of the day, we really need to see the translation in the clinic.

And in the next 24 months, we're going to see how that translation looks with 2 of Absci's assets, ABS-201 in AGA as well as endometriosis. We'll have 2 Phase II readouts in the next 24 months. If you look at our team, we're not just AI scientists, but we're multilingual. We have an AI team, a disease biology team as well as a bunch of drug hunters that ultimately work together to leverage this technology to ultimately go after diseases that have been difficult to address in the past. Additionally, we have a data flywheel where we're constantly learning. We're able to take data from our 77,000 square foot automated wet lab and be able to use that data to ultimately train our models and rapidly learn. So in a 6-week time period, we can go from data in the wet lab to training our models and continuing to learn what AI architectures are ultimately best for generative design.

And this has led to us being able to have really big breakthroughs in de novo design of antibodies. In particular, we've been able to address some really hard and challenging targets such as ion channels. In a partnership with Almirall, we've been able to actually block an ion channel that has been difficult to drug for the past 30 years. Additionally, we've been able to drug the HIV Caldera region in partnership with Caltech. And again, as I said at the beginning, we are seeing exciting translation of this technology with ABS-201. We have very exciting catalysts in the next 24 months, 2 Phase II readouts, one in androgenic alopecia. This is common odness and then additionally in endometriosis.

So if we look at Absci's strategy, we are looking to apply our de novo design technology to tackle hard challenging targets that have yet to be drugged that have known biology. Again, these are GPCRs, ion channels. And how the model works is you take a target of interest, you identify the epitope you want the antibody to bind to and you're able then to generate the CDRs that can bind to that particular epitope of interest. And so now our scientists are actually able to start to test hypotheses that have -- they have been unable to attain previously. And this is where we can specifically engineer in agonism versus antagonism and turning on or off a particular pathway or, let's say, creating switches where you can bind in the tumor microenvironment, but not bind in healthy tissue.

These are all ways that we are leveraging our AI platform to really create differentiated assets. And then we, as a team, figure out which of these we want to partner and then which we want to ultimately take forward ourselves. And in particular, we see a really big opportunity with ABS-201, and this is going to say wholly owned by Absci. And then the rest of the assets, we do look to partner. At the end of the day, it's the team that has gotten us to where we're at. We have incredible AI scientists and wet lab and disease biologists that work together to ultimately get these cutting-edge therapies to patients where we call ourselves unlimiters really being able to achieve the impossible roughly 140 unlimiters strong.

We have a 77,000 square foot campus in Vancouver, Washington, where we're able to leverage that wet lab capability, not only for generating data for training our models, but also being able to do all of the disease biology validation for the particular targets we're going after. And currently, we -- as of Q3, we have $150 million on the balance sheet, and that gets us runway into the first part of '28. I'd like to think of this industry as a team sport. We all need each other to ultimately get these breakthrough therapies to patients. We partner with large pharma in disease areas that we are not focused in on to ultimately co-develop assets together. We've had partnerships with AstraZeneca, Merck. And then additionally, we have data and compute partnerships with NVIDIA and AMD. AMD is actually one of our top shareholders. They recently made a $20 million investment in Absci, and we're using that partnership to really drive innovation within our AI models.

So today, I'll be going through one particular asset, ABS-201. This is an anti-prolactin receptor antibody. And the 2 indications that we are pursuing with this is androgenic alopecia as well as endometriosis. And as I stated previously, within the next 24 months, we'll have Phase II readouts on both these indications. Now diving into ABS-201 in androgenic alopecia. So hair is really important to individuals. If you talk to patients that are losing their hair, it is very personal. It's about their identity. It's about confidence. When patients are losing their hair, they lose their confidence. They end up becoming -- a lot of them are depressed. And by regaining their hair, they're not just getting vanity back, but they're really getting identity.

And this is a condition and a disease that has been underfunded and underlooked for quite some time. And we see this as a really exciting opportunity. The patient population is extremely large. 80 million Americans alone suffer from androgenic alopecia. And the standard of care is extremely poor. The patients are ultimately not getting the efficacy they want as well as the durability. If you look at Minoxidil, Minoxidil only works on roughly 50% of patients. And the topical isn't very efficacious. And the -- an oral, you have to take that for life or you will lose your hair.

There is no regenerative aspect with Minoxidil. And so this is where we see a huge opportunity for ABS-201 because we see actual durable hair regrowth with ABS-201, and it is truly regenerative, and we'll be diving into what that looks like on the following slides. So diving into the actual mechanism of action for the prolactin receptor. So if we step back and just look at the hair follicle growth cycle, it has 3 stages. First is the antigen phase. This is the active growth phase. And you stay in this phase based on your genetics for anywhere from 2 to 6 years. And then you go into the pathogen phase where you get apoptosis and regression and then ultimately, the telogen phase where you have shedding. And what happens over time is individuals, as they age, they end up building more prolactin locally on the scalp.

And this drives the follicle into the catagen state, and it continues to stay there due to the high levels of prolactin. And so by blocking the receptor, you're able to ultimately shunt the follicle back into the antigen state. And we'll be sharing exciting ex vivo data at our KOL Summit on December 11, where we actually are able to show by blocking the prolactin receptor, you're actually able to restimulate the follicle stem cells and actually see the stem cell or the hair shaft growth as well as melanin production as well. So we believe that -- and you'll see on the next slide here that this should lead to very efficacious hair growth, but also durable hair regrowth.

So this target was actually discovered by our Chief Innovation Officer, Andreas Busch, when he was at Bayer. They were actually looking at the prolactin receptor for endometriosis. And when they dosed with the drug, they ended up finding out that the mice that were on drug regrew their hair faster than the control arm, which led them to actually investigate prolactin in AGA and hair growth. And they did a study in the stumptailed macaques state that really got him excited and got us excited as well. And so what you're seeing here is the parts of the stumptailed macaques. These stumptailed macaques naturally go bald and the treatment was over 28 weeks. And then after 28 weeks, treatment stopped and the monkeys were monitored for up to 4 years.

And so you can see when the treatment started, they were completely balled and they had grey hair. And by -- after 28 weeks of treatment, they have most of their hair regrown. And not only is it regrown, it's repigmented as well. So they've gone from their grey hair to their naturally colored hair. And what really blew us away and got us really excited was the durability. So post treatment for up to 4 years, they continue to regrow their hair, which then ties back really nicely to the mechanism of action. Once you're in that antigen state, you stay there for anywhere from 2 to 6 years.

And so we believe that this will be actually a condition or disease-modifying drug where you essentially have post treatment and you could get durability for 2 to 3 years by blocking the prolactin receptor. Additionally, we took ABS-201 and wanted to show the superiority versus standard of care, which is Minoxidil. And so this is a mouse shaving study. These mice are naturally in the telogen phase. And we then dosed these mice with both ABS-201 as well as Minoxidil. And you can see that the -- with ABS-201, very rapidly, you're able to see that the hair follicle is shunted into the antigen phase and you get really pretty instantaneous hair regrowth compared to Minoxidil, again, nicely validating the mechanism of action here.

All right. Great. So the efficacy is there, durability, what about safety? Are there any issues? If we're going direct to consumer, we really need to make sure that this is a safe mechanism and a safe drug. So there is a really great human genetic data out there that where a few families were actually studied where they had loss of function mutations of the prolactin receptor. And these individuals were completely healthy. The only issue that the women had was the inability to lactate. And so we do see this pathway given this human genetic data as a very safe mechanism.

So playing out the AGA story here. We'll end with the upcoming catalysts. So December of this year, we will start our Phase I/IIa study. And this study will start with a SAD component, which will have healthy participants. And then we will quickly go into the MAD study, where we will be looking at healthy volunteers that have androgenetic alopecia. And then the second half of next year, we'll have the first efficacy interim readout looking at the hair regrowth. So we're really excited to start this trial in December. We've actually accelerated our time lines from previous guidance, and we'll have, again, that efficacy readout in the second half of next year. All right. So diving into endometriosis. The other major indication we can go after with the prolactin receptor is endometriosis.

Endometriosis and women's health in general has been underlooked, underserved, underfunded and there hasn't really been much innovation. But yet this is a disease that is prevalent in so many women. 1 out of 10 women have endometriosis and this ends up leading to pelvic and menstruation pain for these women. It's a completely debilitating disease. And the standard of care is extremely poor. It's off-the-shelf pain medication, and there are some hormonal treatments such as GnRH.

But these hormonal treatments really have pretty poor side effects. And so there's not a lot of women that ultimately take these hormonal treatments. And so the opportunity for innovation in this space is huge. And we are really excited about the prolactin receptor as not only being able to treat the pain, but actually be disease modifying. So let's just take a look at how prolactin is involved in endometriosis. So what ends up happening very similar to AGA instead of building prolactin locally in the scalp, women develop prolactin within the lesion. And this prolactin is actually what drives the overall growth of the lesion as well as sensitizes the neurons, which ends up leading to the pain that they -- the pelvic pain that they experience as well as the pain during menstruation. And so by being able to block the prolactin receptor, you can actually shut down the pain as well as reduce the overall lesion development.

And so this is -- there's some -- there's 2 pieces of fundamental preclinical research that got us really excited about this mechanism and was able to show both the reduction in overall pain as well as decreasing the lesion formation. The first major work is here on the left. A group was able to show by blocking the prolactin receptor in mice, they were able to dramatically decrease the overall pain that was experienced within these mice. And then additionally, there's another study that was able to show that by blocking again, the prolactin receptor, you're able to decrease the lesion size and actually bring the disease state back to a normal level.

We then took ABS-201 and wanted to compare it to standard of care, the GnRHs within a mouse pain model. And we were able to show that we could indeed reduce overall pain by blocking the prolactin receptor as well as we were able to show a decrease in the inflammation cytokines as seen here on the right. So as I mentioned, this is a large addressable market, 1 in 10 women have endometriosis. There are currently no non-hormonal treatments out there for women to, again, reduce overall pain and lesion formation. And we believe based on the preclinical data and some clinical data on HMI-115 that we actually believe that this could be a disease-modifying treatment. And if this truly is disease modifying, we do believe that, that actually will increase the diagnostic rate of these women that have endometriosis.

And based on all of that, we do see potential peak sales of greater than $5 billion. Again, that is due to the fact that there is an extreme -- there is very low or poor standard of care, and it's a very large unmet medical need. And to summarize, we, again, have a very exciting 24 months coming up. We have ABS-101 that we just dropped up in our Phase I. We're looking to out-license that particular asset in IBD. Additionally, we do anticipate signing one or more new partnerships with a large pharma either this year or next.

And then additionally, we have 2 Phase II readouts coming in the next 24 months in AGA and Indo. And with that, I'll open it up to questions.

AI platform, do you guys also have -- is this your own platform? And then second question would be, do you have molecular dynamics that you can see that you can test.

Yes, absolutely. So this is our own model that we have developed in-house. And generally the molecular dynamics is a great question. So we are obviously using structure-based data along with sequence and function data. But one of the things that we are seeing as an exciting area of development is actually using in the simulation to generate synthetic data. And so actually combining both the synthetic data along with the wet lab data that's generated is definitely a key part of our overall strategy.

That is a great question. I don't believe that has been studied, but that's definitely something I can follow up with the team on. Yes. So that is a great question. So that molecule, first off, the safety that was done or the Phase I safety study, they only went up to 280 milligrams, which we believe based on the data that they saw both in AGA as well as endometriosis, that they're severely underdosing and they're not reaching greater than 90% receptor occupancy. And so in order to do that, they'd have to repeat their Phase I study. And then additionally, they have a poor formulation and a poor half-life. And in order to be commercially viable in AGA, they'd have to have 24 doses to ultimately achieve the efficacy in the monkey versus we would have 2 to 3 doses over that 6-month period, which we see being commercially viable.

And so we do believe being able to actually get to that 90% receptor occupancy is ultimately going to be key for overall development. And so we do believe that we have a superior drug that has been developed compared to the HMI-115 molecule. So again, it has been studied with the human genetic data of the women that have had prolactin receptor knockout. They have been fertile and they have had children. They just have not been able to lactate. So I think that there is strong human genetic data that supports that this should not affect fertility within women.

I'm thinking about the alopecia program. You mentioned that the prolactin is localized mainly in the scalp.

Yes.

In your nonhuman primate data, are you seeing mostly just hair growth in the scalp? Or do you also have -- are you also seeing hair growth in other regions of the [indiscernible] .

So the hair growth was specific to the overall scalp. There wasn't hair growth seen elsewhere. And again, that's just driven by the fact that you -- again, over time, you see the prolactinemia on the scalp, but that doesn't necessarily occur elsewhere in the body. And then the other thing I'll mention is that you're not going to grow hair in unwanted places. It's essentially just restimulating follicles that have already been created. It's not creating new ones.

Great. Well, thank you all.

Thank you for standing by. My name is Rochelle, and I will be your operator today. At this time, I would like to welcome everyone to the Absci Q3 2025 Business Update. [Operator Instructions]

I will now turn the conference call over to Alex Khan, VP, Finance and Investor Relations. Please go ahead.

Thank you. Earlier today, Absci released financial and operating results for the quarter ended September 30, 2025. If you haven't received this news release or if you would like to be added to the company's distribution list, please send an e-mail to [email protected]. An archived webcast of this call will be available for replay on Absci's Investor Relations website at investors.absci.com for at least 90 days after this call.

Joining me today are Sean McClain, Absci's Founder and CEO; and Zach Jonasson, Chief Financial Officer and Chief Business Officer. Andreas Busch, Absci's Chief Innovation Officer, will also join for Q&A following prepared remarks.

Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the section titled Forward-Looking Statements in the press release Absci issued today and the documents and reports filed by Absci from time to time with the Securities and Exchange Commission.

Except as required by law, Absci disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements either because of new information, future events or otherwise.

This conference call contains time-sensitive information and is accurate only as of the live broadcast, November 12, 2025.

With that, I'll turn the call over to Sean.

Thanks, Alex. Good afternoon, everyone. Thank you for joining us for our Q3 business update call. Today, we'll be sharing updates about our pipeline, including interim Phase I results for ABS-101, acceleration of ABS-201 development in angiogenetic alopecia or AGA, and expansion of ABS-201 development in a second indication, endometriosis.

Interim results from first cohorts of our ongoing ABS-101 Phase I trial in healthy volunteers demonstrated extended half-life as compared to first-generation anti-TL1A competitor programs, but not versus next-generation programs. There was also no apparent impact of ADA on PK and overall safety profile was favorable with no serious adverse events reported to date. The Phase I trial is on track to complete in Q1 of 2026.

Our progress developing ABS-201 for androgenetic alopecia is ahead of plan as we expect to initiate a Phase 1/2a trial in December of this year with an interim proof-of-concept readout anticipated in the second half of 2026.

Additionally, we are excited to announce that we are developing ABS-201 in endometriosis and expect to initiate a Phase 2 proof-of-concept clinical trial in the fourth quarter of 2026. Preclinical and clinical data support the prolactin receptor mechanism in endometriosis, where we believe ABS-201 has the potential to be a safe, effective therapy for the estimated 10% of women globally who suffer from this debilitating disease. Our development plans for endometriosis are synergistic with our already planned ABS-201 Phase I/IIa clinical trial in AGA, which is on track to initiate next month.

Given the significantly greater opportunity for value creation, we have made the strategic decision to prioritize ABS-201 development in endometriosis. This is in addition to ABS-201's ongoing clinical development for angiogenetic alopecia. Therefore, we will seek a partner for ABS-101 and no longer pursue additional internal clinical development for this asset following the completion of the Phase I clinical trial.

The decision to reallocate our pipeline priorities reflects rigorous discipline we employ in allocating our capital and resources. We believe our strategy to advance ABS-201 through human proof-of-concept in both AGA and endometriosis will maximize the value created using our current balance sheet. Both indications are characterized by significant unmet medical need and poor standard of care.

There is biological and clinical rationale for the prolactin receptor mechanism in both indications. Our strategy leverages shared Phase I development, which enables faster, more efficient clinical trial development and both indications offer multibillion-dollar market opportunities.

Looking ahead, we're excited to execute on the dual development of ABS-201, leveraging its best-in-class profile, targeting 2 proof-of-concept readouts in the next 24 months, a Phase I/IIa proof-of-concept interim data readout in AGA in the second half of 2026, and a Phase II proof-of-concept interim data readout for endometriosis in the second half of 2027.

Taken together, this strategy represents our strongest value creation opportunity for patients and shareholders alike. Zach will speak in more detail on our strategy for endometriosis later in the call.

Turning now to our clinical development plans for ABS-201 in angiogenetic alopecia. We have accelerated our clinical development timeline and expect to dose our first participant next month in our Phase I/IIa study. On December 11th, we'll host a KOL seminar to discuss anticipated clinical development path, market opportunity and differentiated profile of the ABS-201 program.

We also plan to disclose additional human ex vivo data that further supports the mechanism of action underlying this program. We designed ABS-201 to unlock a potential new category of therapy for AGA, which we believe could offer efficacious, durable, convenient hair regrowth. This condition, better known as male and female pattern hair loss, affects approximately 80 million adults in the U.S. alone and has seen little therapeutic innovation in nearly 30 years.

In preclinical studies, ABS-201 has shown high potency, low immunogenicity, extended half-life and improved manufacturability. We believe it offers an alternative to current treatments such as minoxidil and finasteride, which have variable or limited efficacy, low compliance and in some cases, serious side effects.

Based on the body of evidence from in vitro and in vivo animal studies, we believe that a simple infrequent course of just 2 to 3 injections of ABS-201 could deliver durable multiyear hair regrowth. Today's standard of care treatments have limited efficacy and require frequent once or twice daily administration, leading to poor compliance. Our KOL network of leading dermatologists have indicated compliance for topical as well as oral minoxidil can be poor in practice, either because of side effects or inconvenience of lifelong daily administration.

A recent study showed that over 86% of AGA patients who try topical minoxidil discontinued treatment. Our own market research underscores that consumers [ valuable ] durable efficacy and prefer a treatment that works with infrequent administration. For these reasons, we believe ABS-201 has the potential to be a dominant new category of therapy, offering convenient durable hair regrowth.

Given this differentiated profile, the straightforward clinical development path and the massive multibillion-dollar market opportunity, we plan to develop ABS-201 through later-stage clinical development and potentially commercialization. As we advance development of ABS-201 for AGA, we're thrilled to welcome doctors, Rod Sinclair and David Goldberg, to our KOL Advisory Board.

Dr. Sinclair is a Professor of Dermatology at the University of Melbourne and the Director of Sinclair Dermatology. He is a world-renowned expert in hair loss with over 3 decades dedicated to research, clinical practice and patient advocacy. He has more than 1,000 publications, including contributions to major dermatology textbooks.

Dr. Goldberg brings nearly 40 years of clinical dermatology experience. He is a clinical professor of Dermatology at the Icahn School of Medicine at Mount Sinai and has led pivotal research studies in dermatology and hair loss, including the original minoxidil trials. Dr. Goldberg has published more than 200 academic papers, contributed to over 15 textbooks on hair restoration and dermatology and served on the boards of the American Academy of Dermatology and American Society of Dermatologic Surgery. We invite you to join our virtual seminar on December 11th, where Dr. Sinclair, Dr. Goldberg and other top KOLs will discuss the ABS-201 program.

We are also progressing several additional programs that we aim to partner prior to clinical development. ABS-301, this is a potential first-in-class antibody targeting an undisclosed immuno-oncology target identified through our reverse immunology platform. Early data suggests potential in squamous cell carcinoma and other indications. ABS-501, this is a potential best-in-class anti-HER2 antibody identified using our zero-shot de novo AI models. These AI design leads displayed novel epitope interactions, increased or equivalent potency to trastuzumab in preclinical disease models, efficacy against a trastuzumab-resistant xenograft tumor in a in vivo model and good developability. Beyond these, we have innovative early-stage programs in our pipeline that we plan to reveal at a later date.

With that, I'll now turn the call over to Zach to walk through our strategy, partnerships and outlook and to provide an update on our financials.

Thanks, Sean. As Sean mentioned, we continue to sharpen our strategic focus and in so doing, have made decisions recently about which internal programs to advance versus partner. Our decisions continue to be based on careful assessment of the potential risks and return for each program given our available resources.

Broadly, I'm happy to report that we continue to execute on our strategic objectives, including advancing ABS-101 through an interim Phase I readout, expediting the initiation of our ABS-201 Phase I/IIa trial for androgenetic alopecia by approximately 1 quarter, expanding ABS-201 development into endometriosis and progressing our portfolio of discovery partnership programs.

We also continue to expand our AI platform capabilities, which, in addition to enabling our own preclinical R&D programs focused on challenging targets has helped generate partnership interest in our platform. Accordingly, we continue to anticipate signing one or more drug creation partnerships, including with a large pharma company by year-end.

As Sean discussed earlier, we will be focused on partnering ABS-101 and do not currently plan to develop the program ourselves into Phase 2. We remain engaged with multiple potential large and mid-cap pharmaceutical companies regarding a potential partnership transaction, some of which are focused on first-in-class indications outside of IBD.

As discussed, we have decided to prioritize the clinical development of ABS-201 for 2 potential multibillion-dollar indications: androgenetic alopecia; and endometriosis, each characterized by high unmet need and poor standard of care. We see strong scientific and business rationale for developing ABS-201 in both of these indications.

Moreover, our planned Phase I/IIa clinical trial in AGA will provide safety, tolerability and PK assessments that will support Phase II clinical development in endometriosis. The Phase I/IIa proof-of-concept trial in AGA will be a randomized, double-blind, placebo-controlled study. The primary endpoints will be safety and tolerability. Secondary endpoints will include PK, PD, immunogenicity, target area hair count, target area width, target area darkening and pigmentation of hair as well as patient-reported outcome measures. The trial will enroll up to 227 healthy volunteers with or without AGA.

The single ascending dose or SAD portion of the trial will test approximately 4 to 6 IV dose groups for safety, tolerability, PK and PD. The SAD portion of the trial will be followed by approximately 3 to 4 subcutaneous multiple ascending dose groups in healthy volunteers with androgenetic alopecia. The MAD portion of this clinical trial is powered to demonstrate human proof-of-concept for the use of ABS-201 to treat androgenetic alopecia by stimulating significant hair regrowth.

We believe that this trial, if successful, will position the program for accelerated registrational trials. Ahead of initiating the Phase I/IIa trial, we are excited to share that we have generated additional ex vivo human data supporting the durable condition-modifying hair regrowth mechanism of ABS-201. Preliminary data from experiments using human scalp biopsies shows the ability of ABS-201 to transition hair follicles into the antigen growth phase and to counteract suppressive catagen effects of prolactin.

This study also shows ABS-201's ability to promote the proliferation of hair follicle stem cells as indicated by upregulation of corresponding markers as well as reduced hair follicle stem cell apoptosis. We look forward to sharing more about this study and its results at our upcoming KOL seminar on December 11th.

As Sean mentioned earlier, in addition to treating androgenetic alopecia, we believe ABS-201 will be effective in treating endometriosis, a second multibillion-dollar market opportunity characterized by high unmet patient need and poor standard of care. Endometriosis is an inflammatory disease defined by endometrial-like lesions found outside the uterine lining. Symptoms include pelvic pain, heavy bleeding, infertility and ovarian cysts. It is a chronic painful condition that significantly impacts the quality of life of these patients.

Moreover, there is currently no therapeutic or surgical care for this disease, which is prevalent in an estimated 10% of women worldwide, including an estimated 9 million women in the U.S. alone. During our R&D Day last year, we discussed how members of our R&D team initially discovered the prolactin receptor inhibition mechanism for hair regrowth during animal studies investigating prolactin inhibition as a treatment for endometriosis.

Based on additional preclinical research, including our own in vivo animal studies as well as recent human clinical proof-of-concept data reported for the HMI-115 program, we believe ABS-201 has significant potential to become a best-in-class, efficacious and safe therapeutic treatment for endometriosis. ABS-201 was designed using our AI platform to antagonize the prolactin receptor and thereby block prolactin signaling. Scientific data support the dual role of prolactin signaling in endometrial lesion formation as well as associated pain. Prolactin and prolactin receptors are overexpressed in the endometrium of patients with endometriosis.

Furthermore, while prolactin supports endometrium formation and individualization, dysregulated expression of prolactin and its receptor have been found in atopic endometrial lesions. Prolactin receptors are also present in sensory neurons and can sensitize these neurons, potentially leading to increased pain perception.

The prolactin pathway is distinct from sex hormone signaling -- further differentiating it from current therapeutic mechanisms of action for treating endometriosis. And preclinical data have shown that prolactin receptor antagonism suppresses postoperative pain in female mice and inhibits endometriosis interna formation.

A recent preclinical study in a homologous mouse model of endometriosis shows that ABS-201 treatment improves pain-related outcomes similarly to GnRH modulation. Mice treated with ABS-201 demonstrated greater locomotor activity and distance traveled as compared to placebo-treated mice, indicating reduced pain-like behavior. ABS-201 also significantly lowered inflammatory cytokines in the peritoneal fluid, which have been shown to be elevated in endometriosis patients.

These results support our development of ABS-201 as a potential therapy for endometriosis-associated pain. Additionally, recent positive top line results from a Phase II trial of HMI-115, a competitor anti-prolactin receptor antibody in endometriosis provided human proof-of-concept and derisking of the mechanism of action. We believe that ABS-201's profile exhibits best-in-class potential when compared to the HMI-115 antibody.

For example, ABS-201 exhibits superior PK and bioavailability in NHP studies, which we expect to translate to better efficacy in humans via sustained target engagement in relevant endometrial tissue. ABS-201 also has 3 to 4x longer half-life in NHPs as well as a higher concentration formulation, both of which should enable more convenient dosing for patients.

We plan to initiate Phase II clinical development of ABS-201 in endometriosis in Q4 of 2026 using the safety and tolerability data generated from the SAD portion of our Phase I/IIa [ angiogenetic ] alopecia study. Based on this time line, we expect to share an interim readout from the Phase II trial in endometriosis in the second half of 2027.

With respect to ABS-301 and ABS-501, our immuno-oncology and oncology programs, respectively, we continue to believe that these programs are better suited for development by a large pharmaceutical or biotech company. Accordingly, we intend to seek partners for these programs prior to clinical development.

We continue to utilize our growing AI platform capabilities to create an early-stage pipeline focused on indications characterized by high unmet medical need. Our unique ability to address difficult-to-drug target classes has enabled us to pursue new opportunities for creating novel and differentiated therapeutic programs in our internal pipeline as well as in our drug creation partnerships.

Turning now to our financials. Revenue in the third quarter was $400,000 as we continue to progress our partnered programs. Research and development expenses were $19.2 million for the 3 months ended September 30, 2025, as compared to $18 million for the prior year period. This increase was primarily driven by advancement of Absci's internal programs, including direct costs associated with external, preclinical and clinical development.

Selling, general and administrative expenses were $8.4 million for the 3 months ended September 30, 2025, as compared to $9.3 million for the prior year period. This decrease was primarily due to a decrease in personnel-related expenses.

Cash, cash equivalents and marketable securities as of September 30, 2025, were $152.5 million as compared to $117.5 million as of June 30, 2025. We believe our existing cash, cash equivalents and short-term investments will be sufficient to fund our operations into the first half of 2028. We see additional upside to this forecast based on potential nondilutive cash inflows that could come from new platform collaborations with large pharma and/or an asset transaction associated with any of our wholly owned programs, such as ABS-101.

As a reminder, we still anticipate signing one or more drug creation partnerships, including with a large pharma company before the end of this year. With our current balance sheet, we believe we are well positioned to execute on our strategy, including delivering potential proof-of-concept readouts for ABS-201 in both AGA and endometriosis. We are also resourced to progress our early-stage pipeline and to advance new partnership discussions related to our AI drug creation platform, wholly owned asset programs, or WOAP.

With that, I'll now turn it back to Sean.

Thanks, Zach. I want to thank our Absci team for their relentless drive, tenacity and belief in our mission to achieve the impossible. This is a pivotal moment for Absci. As you heard today, ABS-201 is moving into the clinic with real momentum. And we're expanding its potential beyond hair regrowth into endometriosis, a major disease area where innovation is long overdue. Together, these efforts underscore the potential of the prolactin receptor mechanism and demonstrate our commitment to translating generative AI protein design into clinical realities.

We've made deliberate choices to focus our resources where we see the greatest opportunity for transformational impact and value creation. By refining our focus on ABS-201, we're leaning into the data, the science and the market opportunity where Absci can lead.

Looking ahead, the momentum is unmistakable. The ABS-201 Phase I/IIa trial in AGA begins in just a few weeks, putting us on track for interim efficacy and proof-of-concept data in the second half of next year. We are expanding ABS-201 into endometriosis with a Phase II trial anticipated to initiate Q4 2026. We anticipate to close at least one new large pharma partnership this year. And I invite you to join our ABS-201 KOL event on December 11th. Details are on our IR website.

Absci is executing with precision and agility, translating AI designed biologics into real clinical impact. What truly excites me is the potential ahead. We are energized by what's next and confident in our path to deliver meaningful value for patients, partners and shareholders alike. Thank you for your continued support.

Operator, let's open the call for questions.

[Operator Instructions] Your first question comes from the line of Vamil Divan with Guggenheim Securities.

So I just have 2, if I could. One, I understand what you're saying around the TL1A program and looking to partner that. I'm wondering if you just -- if there's any more details you can share just in terms of what you saw in terms of the half-life or anything else in the trial?

And then second on just the endometriosis side, it's interesting news there. So looking forward to hearing and learning more about that. But I'm just curious right now if you can maybe just give some sense of the competitive landscape as you're thinking about sort of designing a Phase II trial in that indication or how that would look and how -- just generally how you design it and what's the right comparison to think about?

Yes, absolutely. Thanks, Vamil. Yes. So we took a really hard look at ABS-101. We were, in general, really happy with the safety profile that we saw. We were able to have a half-life that was extended past what we saw with first-gen competitors. But we fell short of second gen. And we were exploring some, I think, really exciting first-in-class indications we could have gone into. And we compared that to taking ABS-201 into endometriosis.

And just given the competitive landscape we were seeing in IBD, we saw it made a ton of sense to take the capital we'd be investing into ABS-101 Phase IIa study and reinvest that into ABS-201 in endometriosis. And we did this for a few reasons. One, there's a big unmet medical need here. The standard of care is really poor. There's not a lot of competition in this space. And additionally, the mechanism, the prolactin receptor is -- has been ultimately derisked with the HMI-115 data that came out showing proof-of-concept for this particular mechanism. So we see this as a derisked mechanism. And again, standard of care is pretty poor here. And we really believe that we have the opportunity to potentially deliver a disease-modifying treatment there.

And with that, I'll hand it over to Zach to talk a little bit more about the Phase II trial design for endometriosis.

Yes. Thanks, Sean. And just to echo a couple of points Sean made. We don't -- we see the endometriosis indication much less competitive than you see in Crohn's. And that certainly was a factor in our decision here. Moreover, the cost of these trials is a fraction of what a full Phase II proof-of-concept study in the IBD space would be.

So we think there's a significant ROI on resourcing this strategy for development in endometriosis. We will talk more about the specific trial design. But I think what we're really excited about here with the ABS-201 mechanism is that there's a potential not just to address pain, but also to be disease-modifying. And so we're currently engaged with our KOLs and have a draft study design that we'll share more about in the new year.

Your next question comes from the line of Brendan Smith with TD Cowen.

So maybe just a quick one first on actually just the profile for 101. And apologies if I missed it here. But can you confirm if any of the potential partners you had been in touch with prior to now have already seen the data or if that's kind of the plan over the next few weeks? I'm just wondering on initial feedback there. And then maybe quickly on 201. I know you've talked a bit about kind of endometriosis versus alopecia. But just wondering if there's ever -- if there's any -- maybe even at a high level, thoughts on market segmentation, just given 201's mechanism and any considerations on how you're thinking about enrollment for that?

Yes. Great. Thanks. So, to address the first question, since this data has just recently come in, we have not had the opportunity to share this data with our partners yet. We plan to share that with them in the coming weeks. And then additionally, as I mentioned previously, we have been exploring other first-in-class indications that we believe there's strong biological rationale for this and it actually expands the buyer universe for ABS-101. And we have been exploring that prior to this call and those discussions have been going quite well. And I'll hand it over to Zach to answer the second question.

Yes. Thanks, Brendan. We're -- As I mentioned, we'll release more details about the trial design for endometriosis. But I will comment that we will be looking to enroll patients that are confirmed to have endometriosis and that we'll be looking to enroll patients that have a significant amount of pain. And I think that was one of the challenges in the study with HMI-115. I think they had some enrollment issues around exclusion criteria, that we will be careful to address in our trial. And I think we've got some leading KOLs advising us here.

So we feel very confident and excited about moving that program forward. There's a very large unmet medical need there and I think a very large opportunity based on what we saw from the HMI trial, that was a nice proof-of-concept on the mechanism. As you know, the trial there in the high dose saw a statistically significant reduction in pain in dysmenorrhea. And so, I think that's a nice readout for us derisking the mechanism and the mechanism also looks safe in that trial setting. So, we feel very confident about bringing ABS-201 into development for that indication.

Yes. And I'd also like to just loop in Andreas Busch, our Chief Innovation Officer, into this question. He had experience at Bayer actually developing an antibody, which is now HMI-115 for endometriosis. And so Andreas, do you have anything else to add here?

Yes, sure. Thanks, Sean. I think it may be irrelevant to point out here that the drug innovation around prolactin receptor antibodies started around endometriosis and not hair loss. And the hair loss observation was actually that it is finding at the time. Again, it's very clear, very well validated that prolactin has dual mechanism in endometriosis, both in promoting and generating the lesions as well as in sensory neurons where it clearly affects the pain and the pain sensation.

And in preclinical experiments, it was nicely shown that prolactin antibodies in our experiments now at Absci as well as previously in Bayer's hands that it can indeed affect both pain as well as reducing the lesions, as Zach has indicated before.

I also want to point out that there is a significant unmet medical need based on the fact that there are not any non-hormonal treatments around in endometriosis. There is, of course, the approved GnRH antagonist treatment, which has the typical side effects of estrogen reduction. And there is a significant need of nonhormonal safe approaches in endometriosis. And this is what all data of prolactin receptor antibodies so far have shown by safety, both in preclinical experiments as well as in human genetics, where women with complete knockout of prolactin receptors have been shown to be perfectly healthy and even being very easily able to bear children. Zach, Sean?

Operator, can we have the next question?

Your next question comes from the line of Sean Laaman with Morgan Stanley.

Sean, just to gauge your confidence on the data that you do have of being able to partner 101 out. And what are you looking for in a partner?

Yes, absolutely. It's a great question. So what we're looking for in a partner is, one, the domain expertise in the particular indication that we're looking to go into and have the ability to actually develop it in that particular indication and ultimately be able to take it through approval. And so, again, I think we have a much bigger buyer universe with the different indications that we are looking at here. And we are excited to begin to engage with -- in those discussions.

I don't know, Zach, if you have anything else to add on the partnering front?

I would just add that, as Sean mentioned, we have done some work on a first-in-class indication for ABS-101. And we've had some engagement already on that indication. We'll be continuing those discussions as we move towards the end of the year and into early next year. But we feel pretty excited about the potential to partner this asset with a pharma that will be exploring first-in-class type indications.

Sure. And just on 201, just to sort of gauge your feeling on how easy the trial is going to be to recruit? I imagine it'd be a fairly [ facile ] process, but I could be wrong. And then just maybe sort of the cost to getting it to sort of proof-of-concept status? And how long do you anticipate a patient would need to be on drug to potentially reach the outcome that you're looking for?

Great. Zach, do you want to take the first 2 questions and then Andreas, I'll hand it over to you for the third?

Yes, absolutely. And just to clarify, when you asked the question, are you referring to endometriosis or AGA?

Sorry, alopecia, sorry.

Yes. Okay. Perfect. So, we feel very confident in the ability to recruit for that trial. We have multiple sites in Australia, including a major KOL, who'll be speaking at our KOL event on December 11th, who are heavily engaged in recruiting and are confident that we will recruit that trial on time. And for -- in terms of when we would expect to see efficacy, we're looking to have an interim readout that will be in the early part of the second half of next year. And that's going to look at a 12-week -- a 12 -- -- sorry, a 13-week time point where we'll -- not only we're going to be obviously measuring safety and tolerability to the SAD and we'll see that data well before the second half.

But in the second half for efficacy, we look at that 13-week readout. We expect to see significant hair growth in the terminal area hair count relative to baseline. We'll be doing additional measures of efficacy at the 20-week and the 24-week as well.

Your next question comes from the line of Gil Blum.

So maybe a quick one on TL1A. Just to understand the features here. So, the half-life wasn't as much as a second gen asset, but you mentioned that the ADAs didn't affect the PK. Where do you think that fits the asset as it relates to an indication? I mean, is this one of the reasons you're looking at alternative indications? And I have a follow-up.

Sean, you may be on mute. This is Zach. I can take that question. Look, we looked at the profile and a full disclosure. We're still waiting for data to come in on the highest dose patients before we have a final read on what the half-life looks like. But in our assessment, the molecule looks safe, well tolerated. We did not see an effect of ADA on PK as well. But we do think it has an additional advantage, which we'll be getting better measurements around, which is tissue distribution, which potentially could lead to better efficacy in a number of indications. And this is one of the areas that's gotten us focused on a couple of newer indications where the molecule could be first-in-class.

Okay. That's helpful. And as it relates to endometriosis, just to clarify, are we looking initially at a subcu dosing or also IV first?

Yes. Great question, Gil. I think our view -- go ahead, Sean.

Sorry, I got kicked off there for a minute. Yes, so the plan would be subcu in the Phase II, very similar to how we're planning on running the AGA trial. As we mentioned previously, we're at 200 mg per ml. And we'll do the SAD portion in IV and then go to the subcu in the MAD and then same with the endometriosis trial as well.

So you'll use subcu initially in endometriosis? I just want to make sure I understand.

Yes. In that Phase II trial, that is the plan to use subcu.

Okay. And maybe the last point, just to make sure -- so focus remains both on AGA and endo, not endo taking the lead here. Is that correct?

100%. I would say that they are co-leads. Our main focus this next year is to get the Phase II readout in AGA. And then the year following, it would be endometriosis. So the plan is still full steam ahead on AGA. Nothing has changed on that front at all.

And maybe it's important also to even add that, of course, the Phase II trial in endometriosis takes full advantage of Phase I trial in AGA.

Yes. This is Zach. To put a finer point on that. It's a very capital-efficient development plan since the Phase II trial in endometriosis will leverage all the safety data we generated in the Phase I/IIa trial in AGA.

Your next question comes from the line of Ryan Cheng with JPMorgan.

As we think about the timing of the interim alopecia data and also the start of the Phase II endometriosis trial next year, will you want to wait for the interim data from alopecia before you start the endometriosis trial? Just curious if there's any read-through between the 2 items.

So obviously, we're going to have to get the SAD safety portion before going into the Phase II study. But assuming the Phase I SAD data looks good from the AGA trial, we plan to march full steam ahead in terms of going into endometriosis. And we -- yes, we do not plan to wait to see the AGA readout before starting that Phase II.

Got it. And maybe just one quick one about what we have seen so far from HOPE Medicine's 115, specifically in endometriosis. How much read-through do you see from 115 to your 201 program so far? And how are you using the data that they have seen to your own advantage?

Absolutely. Zach, do you want to take that question? And Andreas?

Yes, absolutely. Yes, absolutely. We look at the trial design, was not the best. So there's definitely some learnings there. And you can be assured we will have a well-structured design trial that's adequately powered. But the key point that we take away from that trial that I think is very encouraging for proof-of-concept in endometriosis is the following.

One, the first point being they saw -- in their effect size they saw a dose response during treatment -- during the 12 weeks of treatment and a statistically significant response in pain for the high dose and this is in dysmenorrhea. So this would be the primary endpoint or one of the primary endpoints we would look at in our trial as well. So we find that to be very encouraging.

I think there's some learnings from, as I mentioned, the way they structured and designed the trial where we will be sure to power correctly and make sure we design for entrance requirement with a little more rigor. But we think it's, like I said, a very encouraging proof-of-concept that derisks the mechanism.

Your next question comes from the line of [ Devin Beckert ] with KeyBanc.

Just wondering if the ex vivo results you mentioned with 201 are better than expected or generally in line with what you thought? And then could 201 be expanded to additional indications?

Yes. Regarding the ex vivo data, obviously, when you're dealing with human biopsies, a lot of things can go wrong. And from what we saw just from the biomarkers, that were upregulated. The stem cell growth that we saw that was driving the hair shaft production as well as the melanin production for re-pigmentation.

All of that was really, really exciting to see and it validated the mechanism in a really fantastic way. And it lines up really nicely with what you're seeing in the stem cell [ Maca ] data as well as the mouse shaving study that we did. And so we think it just ties together everything really nicely. And this was in -- of 3 different patients. And you saw the same response across all 3 patients.

And so, we were -- yes, just really pleased with what we saw. And I think that gives us really strong confidence going into the Phase II study.

And I'll add to that, to your second question. We do see potential additional indications for 201. We're not ready to speak about those today. I think we're laser-focused on driving that program through the Phase I/IIa for endometria, for AGA as well as the Phase II for endometriosis.

[Operator Instructions] Your final question comes from the line of Kripa Devarakonda with Truist.

For the in vivo program with 201, can you remind me if you expect to be able to target all endometriosis patients or if there is any restriction or subgroups that you would expect to target? And I know it's really early. But when you think about drugs that are standard of care that have been commercialized in endometriosis, what do you see as the hurdles in the space as you take 201 forward?

Yes, that's a great question. Zach, I'll hand it over to you and then to Andreas.

Yes. Terrific question. I think a couple of points here. One is we're looking to address patients that are on -- potentially displace GnRH therapy. Those haven't -- that therapy has a sort of unwanted side effects for reduction in bone mineral density. It does show some efficacy. But we think trying to place a new option in the arsenal that's more effective, does not have a side effect profile like that could be game-changing for these patients. So that's our mission.

In terms of how we recruit and segment the trial, that's something we'll comment on later next year as we get closer to the start of the trial.

And Andreas, if you'd like to add something, please feel free.

Yes. I mean -- so these are 2 different aspects. So one is what do we believe where it will work versus what's the design of the trial. So from the scientific rationale, there is only reason to believe that the prolactin receptor antibody should work in every endometriosis patient, because we do know that in endometriosis patients, you do have an increased prolactin receptor as well as prolactin expression in the endometriosis lesions as well as in sensory neurons. Therefore, having an effect on both the reduction of lesions as well as on the pain aspect.

And this, of course, is going to be sex hormone independent effect, which is critical. So we can with all rational applied say that there shouldn't be any female patient with endometriosis, which should not be potentially treated with a prolactin receptor antibody.

That ends our Q&A session. I will now turn the call back over to Sean McClain, Founder and CEO, for closing remarks. Please go ahead.

Yes. I just want to first thank our team at Absci for all the hard work they put into not only getting 201 into AGA, but now expanding into endometriosis. And I want to thank all of our investors and analysts for all the support. We're really excited about what's ahead. And we have some exciting catalysts over the next 24 months. So look for another exciting year.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Good afternoon, everyone, and welcome to Morgan Stanley's Global Healthcare Conference. I'm Sean Laaman, Head of U.S. MidCap biotech equity research. Getting late in the day. But for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/research disclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. Right. For this session, we have Absci with the founder CEO and Director, Sean McClain, and CFO and Chief Business Officer, Zach Jonasson. But welcome gentlemen.

And maybe just to kick off proceeding, Sean, contextualize the discussion and give us a bit of a view on Absi.

Yes, definitely. So we're a generative design company really leveraging AI to be able to go after the hardest and most challenging problems that still exist being able to go after hard targets such as ion channels and GPCRs, the undruggable targets. We think of AI as being able to decrease time lines and decrease overall cost, but it also opens up kind of the fourth dimension, which is being able to unlock new novel biology where other technologies are unable to address.

And you see that in our partnerships with Merck and AstraZeneca and Almirall, but also in our own internal pipeline as well. We have a portfolio that's focused on I&I. The first asset is in the clinic. We'll have a Phase Ia readout in the coming months. And then additionally, we'll have another asset in the clinic either end of this year, beginning of next. This is ABS 201, and this is for androgenic alopecia targeting the prolactin receptor essentially think of hair regrowth and repigmentation, and we're excited to have a Phase II readout on that the second half of next year. And so I think a really exciting technology paired with, I think, some exciting readouts that we have coming over the next 12 months.

Wonderful. Thank you, Sean. Some macro questions. So with China's rise in biotech innovation, how are you thinking about Absci's competitive position here? And will this influence your R&D and be their strategy?

Yes, it definitely has influenced how we think about our own strategy moving forward. And you have to give China credit, I mean what they've been able to show that they can do over the last 5 years is really remarkable being able to develop high-quality assets in a very cost-effective way. And they're going after targets that are now really kind of taking this soft faller approach and it's really made us rethink how we're wanting to approach our own internal pipeline and how we're approaching it with large pharma and how we stay differentiated and how we continue to stay relevant and innovative. And that's really where we focused on these hard-to-drug targets, such as being able to create agonists towards GPCRs or blocking ion channels again, where others have struggled that's where we want to focus in on.

And we're focusing on biology that's been known, but again, hard to drug. And that's really been a driver for us over the last couple of years and kind of shifted our strategy based on what we're seeing in China. And I think that pressure to innovate actually I think, is really important for the U.S. biotech community as a whole. And I think we're actually going to see a lot of benefit come from that.

Wonderful. I am going to ask you this next macro question, but we're asking these questions at all companies. So it's a little circular to ask an AI biotech company, this AI question that as an AI tech enabled by technology company, can you describe the key ways your platform is leveraging AI and thinking about AI's future disruption potential.

Yes. AI is truly transforming how we're doing drug discovery. It's really shortening the time line. So if you look at our TL1A asset, we were able to get that in the clinic and roughly 24 months from starting on that program normally takes 5.5 years. We're seeing a decrease in the overall cost upwards of $30 million to $50 million, traditionally, even upwards of $100 million to get an asset into the clinic, and we are able to get our TL1A asset in the clinic for roughly $15 million and so you're seeing a decrease in both cost and time. But again, as I mentioned, one of the things that we're focused in on and we see as a big differentiator is this fourth dimension being able to unlock new novel biology with AI.

I think is where you're going to see a lot of value creation over the next few years. And then an area that I'm really excited about us at Absci aren't necessarily focused on it, but how can you use AI on the clinical development side as well in order to make sure that you're getting the right patient recruitment. You look on the right biomarkers and helping make sure that you're getting the right enrollment into your trials. And so you're already seeing the -- I think some of this early transformation, but we are in the early innings.

And one of the things that I can't emphasize enough is the importance of data. At Absci, we've always been a data-first company. We've generated data to train our models and validate it. And this has really created this learning loop that has allowed us to rapidly innovate and ultimately generate the best models, but whether you're generating it in-house or getting a consortium of data, what we've seen for ultimately building the best models is making sure you have the access to the right data.

I'll add 1 point to that, which is I think a lot of people maybe don't appreciate AI is something that's constantly evolving. It's not a static platform at all. And I think what's exciting for us as we look at how our platform has expanded and capability over the last 12 months, even in the last 6 months. So the example Sean was pointing out about these difficult targets that we've been able to address. Those are our last generation of models. We're already on to the next generation. And so for me, what's really exciting as you think about the future, that pace of capability expansion it's not linear. It's nonlinear. And we are definitely on that curve. The ingredients for that are the data that Sean mentioned as well as compute.

Exciting, exciting. What has been the most impact on a sale on the regulatory side, if it's FDA, MFN, tariffs?

Yes. We really haven't been impacted by any MFN or tariffs. We're not a manufacturing company. So -- and we've been doing our Phase I clinical work in Australia, where it's cheaper and faster. So we haven't been impacted by any of those initiatives. The other set of initiatives would refer the administration has been promoting or for advancing more rapid development through FDA. So obviating animal testing. We think that fits really nicely into the kind of things we're doing. I mean we work on poly specificity models and other models that address safety. So we think some of those initiatives are right in line with our objectives.

Wonderful. I guess on to the platform, you've built a proprietary AI drug discovery development platform. So what differentiates your architecture from other AI drug discovery and development systems?

Yes. It's really this what lab-in-the-loop. This ability to generate protein-protein interactions, essentially antibody functionality data that we can use to train our models but also using that same technology to inform how accurate the models are as well. And this has really allowed us to rapidly iterate on what model architectures are best suited for the problems we're looking to solve, what hyper parameters and then particularly, how you curate your data and what data is necessary. We have the 6-week cycle time, and we're constantly trying to push that down to the faster you can create that learning loop, the faster the actual innovation progresses.

And I think that, that's been just a very key differentiating feature. And I looked at where we're at with AI almost how the semiconductor industry has gone every 18 to 24 months, you have a new chip coming out and I think that's very similar to what you're seeing at the AI drug discovery space, and it's kind of what Zach was touching on. It's not static at all. it's ever evolving. And so again, the faster that you can iterate, the faster you can stay ahead of the competition. And ultimately, at the end of the day, it's about the product. How can you create differentiated products that ultimately are going to be first-in-class and best-in-class.

Sure. And being at the beginning of that sort of innovation, which is not linear and pace of discovery accelerates and you've got wet lab-in-the-loop. Do you get to a point where you've got enough data points to train a model that you no longer need the wet lab?

Yes, absolutely. I do believe that you're going to get to a point where you have a model that is static for solving a particular problem and you really just relying on the inference and you're on to solving the next problem. And I think the way we look at it at outside you can get to the point where you're able to predict an antibody to bind to an epitope of interest, well, the next step then is, okay, how do you predict the functionality, not just the epitopes. And so you're always kind of going on to the next problem, and that's where kind of this -- again, it goes back to this learning loop and the wet lab-in-the-loop and why it's so important. But yes, you will timely get to the point where you have static models, but again, then you're on to the next problem.

Sure. What are the biggest challenges in designing antibodies, which have historically been undruggable overall challenging to drug targets like ion channels and GPCRs.

Yes, absolutely. It's really the surface exposure. There's not much surface exposure of these ion channels and the GPCRs, which creates a difficult time for let's say, the immune system and an immunization campaign struggles with being able to hit these antibody or to hit these targets because there's just not much surface exposure. But with an AI model, it doesn't really matter how much of surface exposed. You just need some. And if you have an epitope, that is surface exposed, you can then generate an antibody towards that and so being able to block an ion or has always been a struggle. You can now with our models to be able to design deep CDR or long CDR loops that can bind deep within the crevice to block it or in the case of a GPCR, being able to generate an antibody that agonizes the GPCR very similar to how the ligand would.

And so these are some of the problems we're trying to solve and why I think some of the traditional approaches have failed.

Sure. And what are some of the smart features you've engineered into antibodies so far, such as pH-dependent binding or agonism antagonism?

Yes, absolutely. So we've been able to show that we can really engineer in a lot of different features. We are able to show on a particular oncology target where we could essentially get differential binding in the tumor microenvironment where it's more acidic but doesn't bind in the healthy tissue at neutral pH. And so that opens up a lot more targets that you can start to go after in oncology when you can have that differential binding. And then, yes, additionally, if you look at some of these GPCRs that are coming up in metabolism, a lot of these are peptides or the original ligand is a peptide and you can essentially mimic how that peptide is binding to the target to agonize it or if you want to block it, you can develop an antagonist towards it.

And so these are kind of some of the ways that we're using de novo design to start to engineer in the properties that we want versus kind of this trial and air process that drug discovery has always been.

Sure, sure. Okay. And maybe just to move away from the platform for a second and start running down the pipeline. So on 101, what are the key objectives for the upcoming Phase I interim healthy volunteer data with the readout is expected, I believe, in 2025 for your Tier 1 asset.

Yes. We're just right around the corner. We're really looking forward to the readout. The #1 thing will be safety, obviously, but we'll also be looking for the PK profile. We're expecting to be able to do at least once quarterly. We'll also be looking for PV and the target engagement. This will be in healthy volunteers. And we'll be looking finally to see if we get a good signal around the low AA rate, which is what we expect, given the epitope we selected.

Sure. Thank you. And I guess still on 101, compare it to other TL1A antibodies in terms of potency, durability and patient convenience or what are you hoping to achieve there?

Yes. I mean certainly, we've done head-to-head comparisons against the first-gen molecules. And there, I would say, we see advantages in potency, half-life for sure. Most of those are once every 2-week dosing. We also see some advantages in the ADA profile, which we think is going to be important for the final drug product here. And then I would say 1 thing that is maybe a little bit overlooked is we see really great bioavailability and tissue penetration and we do believe, long term, that could be something that translates to additional efficacy.

We also have monomer trimerous binding, which also could get at additional efficacy in certain patient types as well. We think the molecule is very well set up to compete against the first-gen, and we believe it's in a good position to compete against the next-gen molecules as well.

And can you describe your progress in partnership discussions and what you believe may be the value inflection points of the program, where do you foresee partnering to be optimal?

Yes. So we've got a lot of engagement with large pharma as well as Tier 2 pharma companies that are interested in the TL1A program. And we do believe with the breadth of indications that are now under investigation for that mechanism. We do believe there's a large partnership or buyer audience. So we've engaged with them. There are a couple of different points across the time line where we think it would make sense to potentially move into a transaction.

One of those is after this interim readout later this year. Another one will be when that Phase Ia/b closes, and we have the final readout there, which would coincide roughly when we'll have a bispecific package at TL1A with a novel arm who has the second arm which we understand from several of our discussions is of high interest to pharma, particularly having a first-in-class bispecific. And then thirdly, we're fully prepared, capitalized and in our forecast is to take this program through a 2a study as well in patients.

Moving on to 201 in androgenetic alopecia. So what makes 201 compelling molecule for the treatment of that disease.

Yes, absolutely. If you just look at the standard of care of minoxidil and finasteride and what you see there is patients being frustrated with having to take those either orally or topically daily so that convenience is a big factor. And patients at the end of the day, a lot of them aren't seeing the overall efficacy that they would like to see. Minoxidil is only efficacious in a certain patient population. And then women really don't have a great option either because they can't take finasteride and minoxidil gives them hair in unwanted areas. And so there really hasn't been a lot of innovation within hair regrowth in the last 20 years.

And what we're seeing with the mechanism of 201 going after the prolactin receptor is that if you block this receptor, what we're seeing in both mice as well as nonhuman primates is that you end up shunting the follicle back into the active growth phase and you actually start to get hair regrowth. And we've seen this hair regrowth in stump-tailed macaque and mice. And the stump-tailed macaque is really quite exciting. Essentially, these are monkey but naturally go bold. And when you block the prolactin receptor, they go from their bald gray hair to full head of hair and it being jet black, showing that you can essentially restimulate the follicle growth as well as achieving pigmentation as well.

And we actually have seen this translate into the clinic as well. Our Chief Innovation Officer, actually discovered this mechanism when he was CFO at Bayer. And they were actually looking at this particular mechanism in endometriosis. And it was a serendipitous fine that the prolactin receptor was involved in hair regrowth. And essentially, the way they discovered this was the mice that had the drug regrew their hair faster than the control arm, which led them to believe -- led them to discover that this is indeed involved in hair regrowth.

And they ended about licensing this molecule to a Chinese company. Hope Biomedicine and they took it into a Phase Ib. And they were able to show that they could get 14 hair per square centimeter and talking with the PI on that study, Dr. Rob Sinclair, he had mentioned to us that they had severely underdosed in that study ultimately getting receptor occupancy well below 90%. And that was also confirmed in our nonhuman primate study that we did with that molecule. And we've engineered the molecule to essentially be able to achieve greater than 90% receptor occupancy and only have to dose 2 to 3 times.

And so we do believe that this mechanism has been validated both on the preclinical side as well as the clinical side, and there's really a massive opportunity for this particular market in general. And so we're really excited about this. And I think one of the great things about this upcoming trial is that we will be in the clinic end of this year, beginning of next, and we're going to be doing a combined Phase I/IIa study and second half of next year, we will have a 12-week interim efficacy readout looking at the hair regrowth. And so we're roughly months away from a really exciting pivotal Phase II readout in this program.

Right? So with the molecule, we've got greater receptor occupancy and less frequent dosing with your platform, why couldn't you have done that with a human designing the molecule? What is your platform enabled you to do to come up with that molecule?

Yes, absolutely. Well, I would say humans actually tried to design the first molecule and the first molecule had lower receptor occupancy. And in order to get full receptor occupancy, you'd actually have to dose 24x versus the 2 to 3x that we've engineered. And essentially what we were able to do was increase the overall affinity and potency of this overall molecule. And then we also engineered in an extended half-life the molecule that was originally designed at a half-life of roughly 2 weeks and we were able to engineer ours to at least what it looks like will translate from NHP to humans. I think we're going to roughly have a once quarterly dosing. So 2 to 3 doses over a 6-month period. And this was all done with our AI platform.

And Sean, one other thing I'll mention, too, and this is true of all of our programs, redesigning the developability so you can formulate these molecules quite easily. The first-gen molecule that Bayer developed has got severe formulation conditions. It's not a very stable molecule. So we think that's roughly capped out at about 60 mg per ml, which is very low. We should be at a 200 mg per ml formulation, and we're on track for this trial.

And maybe just to talk about the market opportunity. We wrote something on this very recently. And what do you think the market opportunity is.

We've done some market research. We're doing a little bit more now, and we've also had, I think we've been really fortunate to have some great advisers, including the former Head of Commercial at Allergan as well as the former CEO and when we've looked at this, we've done patient surveys, KOL surveys, we think this is an enormous opportunity in the order of $10 billion, putting aside pigmentation. If we restore pigmentation, then I think that, that market would go up significantly from there.

This would be a cash pay market. And when we look at what the consumer needs here, what they really want is they want something it works. So in practice or out in the field, we're seeing that Minoxidil, for example, works in maybe 5% to 10% of patients. And then the results are pretty mediocre. So if we can deliver a robust efficacy with durability, that's what patients are looking for. They don't want daily use. They want something that they could do like once or 2 or 2 to 3 injections is perfectly feasible. And it looks to us like the price point could be quite significant, enabling gross margins, it would be north of 90%.

Wonderful. Wonderful. On the additional pipeline programs. Can you provide an update on earlier-stage programs like 301 and 501. What are the next steps for these programs.

Yes. Absolutely. So 301, we showed some really nice target validation data earlier this year, we are now transitioning into in vivo efficacy studies. And both with 301 as well as 501, we are looking to partner those. We do not want to take these into the clinic ourselves, we think that these are best in the hands of large pharma or pharma that focus in on oncology. And so we do not plan to invest the capital further to take these into the clinic. We do plan to out-license them. And then we have a whole host of other leads that are focused in on I&I and metabolism based targets that are earlier in the pipeline, which we haven't disclosed yet. And we do plan to nominate and disclose a new drug candidate later this year or beginning of next. And again, that is definitely kind of focused on the I&I similar to 101 and 201.

Wonderful. Is it the way to view your business over the longer term. You've got some proprietary pipeline programs ongoing. And for you, it's more about sort of validating molecules to get into the clinic, and then maybe the preference is over the long term, that's where it stops for you and then it's milestones and royalty from that point. But really, what you see your machine as is something that you essentially out-licensed to the pharma where they will approach you to optimize molecules for them?

Yes. I would say, in general, yes, with the exception of 201, we do think that we can take 201 deep into the clinic and even submitting a BLA on our own. This is an indication that is actually pretty cost effective to develop, and we have the domain expertise in-house to be able to run the necessary trials. And so we do think -- by taking this further, we do retain more optionality and ultimately create more shareholder value by keeping it and taking it deeper into the clinic, and it's something that we have very high conviction in.

And can you remind us the status of your partnership with Almirall and what are the next steps for the bispecific ion channel program?

Yes. As you probably saw in end of July, we announced that Almirall had selected a second target to work on with us, which is a bispecific program. And that was really based on our success on the first program, which was successfully designing a highly specific antibody to an ion channel. And so that program and the bispecific -- the new program, I should say, is underway now. And then the ion channel program is currently in optimization. So it's moved to the next phases of development.

And I think this just goes to show once you have success on one challenging target with the large pharma or pharma, they want to move on to the next. And I think that this, I think, really demonstrates the value of the AI platform and being able to go after these hard, challenging targets.

Sure. You've mentioned a potential large pharma partnership this year. What are the key attributes you look for in the partner.

Yes. I think ultimately, we want a partner that complements what we're doing. And if you look at a lot of the partnerships we've had to date, they've focused in areas that we're not focused in on. And this partnership is going to be focused on oncology. And so being able to leverage their therapeutic area expertise, their disease biology expertise in oncology and then leveraging our platform to design first-in-class, best-in-class assets. we see as a great strategy for diversifying our portfolio outside of our therapeutic area of focus.

Got you. Got you. And how do you think about solvency of data? So if you're partnering with a big pharma and you generate some insights at a molecule into the clinic. How do you separate the ownership of the data?

Yes. I mean just to take a step back. Some investors have asked us recently well, why do you even do partnerships? Why don't you just do your own program? And there's a couple of reasons why we do them and I'm going to get one of those is the data but one of the reasons is for diversification because as Sean mentioned, we're typically working with partners that have expertise and indications that we're not focused on.

And secondly, obviously, there's nondilutive capital, which is great. But the third reason is, in each of these programs, we generate data in-house, and we're able to keep that data and we keep the results of that data in terms of how we implement it to improve our models. So you can think of it this way, in all these partnerships, our partners are underwriting the development of the platform. And so there's good reason to keep looking to do partnerships in parallel with our own internal programs.

Sure. Wonderful it. With recent capital raises runway into 2028, how are you allocating resources across the various programs?

Yes, why don't you take it?