Ethos Technologies Inc.

Good afternoon, ladies and gentlemen, and welcome to the Atire Pharma third quarter 2021 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. And to ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. And as a reminder, this conference is being recorded for replay purposes. It is now my pleasure to hand the conference call over to Ashley Dunstan, ATIR's Director of Investor Relations and Corporate Communications. Ms. Dunstan, you may begin.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us today to discuss ATIR's third quarter 2021 operating results and corporate updates. We are joined today by Dr. Sanjay Shukla, our president and CEO, and Ms. Jill Broadfoot, our CFO. On the call, Sanjay will provide an update on our corporate strategy, including our clinical program for ATYR 1923 and our research and discovery programs in NeuroPillin 2, including our preclinical program for ATYR 2810. Jill will review the financial results and our current financial positioning before handing it back to Sanjay to open the call up for any questions. Before we begin, I would like to remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward looking statements. Please see the forward looking statement disclaimer in the company's press release issued this afternoon as well as the risk factors in the company's SEC filings and included in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made, as facts and circumstances underlying these forward-looking statements may change. Except as required by law, a tire pharma disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. I will now turn the call over to Sanjay.

Thank you, Ashley. Good afternoon, everyone, and thank you for joining us for our third quarter 2021 results conference call. The third quarter was a major inflection point for ATYR in which we demonstrated clinical proof of concept for ATYR 1923 or 1923, and that our novel tRNA synthetase biology platform has the potential to treat serious diseases. The positive results reported from our Phase 1b-2a study of 1923 and pulmonary sarcoidosis, our initial interstitial lung disease or ILD indication, suggest that 1923 could be a transformative therapy for patients by reducing steroid burden while also improving lung function and measures of sarcoidosis symptoms. Since we reported these findings, We've had the opportunity to share them with many of the groups that played a key role in supporting us to get to this point, including the principal investigators, Cure and Pharmaceutical, our partner for ILD in Japan, the Foundation for Sarcoidosis Research, with whom we collaborated to conduct this study, and even some sarcoidosis patients. And in each case, the feedback has been outstanding. This enthusiasm reinforces our confidence in the strength of the data and we are more excited than ever to proceed with the development of 1923. We look forward to advancing 1923 to a registrational trial in pulmonary sarcoidosis next year, which will bring us one step closer to delivering a potential new treatment to sarcoidosis patients with clinically meaningful outcomes. As we begin, I will summarize a few highlights since we last spoke in August. We announced positive results from a Phase 1b-2a multiple ascending dose placebo-controlled study of 1923 in 37 patients with pulmonary sarcoidosis. 1923 was safe and well-tolerated at all doses with no drug-related serious adverse events or signals of immunogenicity. Additionally, the study demonstrated consistent dose response for 1923 on key efficacy endpoints and improvements compared to placebo, including measures of steroid reduction, lung function, sarcoidosis symptom measures and inflammatory biomarkers. Furthermore, the clinical proof of concept data support the expansion of the development of 1923 in other forms of ILD, such as connective tissue disease-related ILD and chronic hypersensitivity pneumonitis. We announced a presentation of preclinical research at the 2021 Society for Immunotherapy Cancer Annual Meeting, demonstrating the effects of APYR 2810, or 2810, our lead antineuropilin antibody and IND candidate on tumor-associated macrophages. These data advance the understanding of 2810's mechanism of action and the process by which it may inhibit tumor progression and disrupt immune invasion. These findings will help support the clinical development of 2810, including a planned phase one study in cancer next year. We appointed industry veteran Dr. Robert Ashworth as vice president of regulatory affairs. And finally, we raised net proceeds of $80.6 million through the issuance of 10.8 million shares of common stock in September 2021 from a public offering. We're thrilled with all that we had accomplished thus far in 2021. We're working diligently to finish the year strong and set ourselves up for a highly productive year in 2022. Let's begin with our clinical program for 1923. 1923 is a potential first-in-class immunomodulator for severe inflammatory lung disease. 1923 is a novel FC fusion protein based on the naturally occurring splice variant of the lung-enriched tRNA synthetase Harris fragment that downregulates aberrant immune responses in inflammatory disease states. 1923 has been shown preclinically to downregulate inflammatory cytokine and chemokine signaling and reduce inflammation and fibrosis. Neurofilin 2, or NRP2, is upregulated on key immune cells, known to play a role in inflammation, and is enriched in inflamed lung tissue. 1923 binds selectively to NRP2 and therefore has the potential to normalize the immune system, serving to resolve inflammation and prevent progressive fibrosis, thereby stabilizing lung function and alleviating morbidity and mortality. We're developing 1923 as a potential treatment for patients with ILD, a group of rare immune-mediated disorders that can cause progressive fibrosis of the lung. Our initial ILD indication for 1923 is pulmonary sarcoidosis, a disease that is characterized by the formation of granulomas or clumps of immune cells in the lungs. The formation of these granulomas is driven by persistent, aberrant inflammation. If left untreated, it can lead to irreversible scarring or fibrosis and diminished lung function, which may lead to respiratory failure or the need for a lung transplant. We estimate that there are approximately 200,000 patients with pulmonary sarcoidosis in the U.S. alone, although estimates do vary. About half of all patients will require some form of systemic therapy, and 30% of all patients will have chronic progressive disease despite available treatment. The current standard of care typically includes treating the inflammation with corticosteroids and other immunosuppressive therapies, which can help manage inflammation and alleviate symptoms such as cough and shortness of breath. However, they have no demonstrated efficacy on disease progression and can result in serious long-term toxicity. Additionally, many patients do not respond to currently available treatments. There's a substantial need for a safer, more effective treatment that could reduce or replace the requirement for chronic corticosteroids or other immunosuppressive therapy and prevent disease progression. In September, we reported positive results from our proof-of-concept study for 1923 and pulmonary sarcoidosis. We want to take a few minutes to recap these outstanding findings. In doing so, we will also incorporate some of the commentary and feedback received from recent meetings held with our studies Principal Investigators, or PIs, where we presented the results to obtain important insight regarding what they viewed to be the most impactful takeaways. The Phase 1b-2a study was a randomized, double-blind, placebo-controlled, multiple ascending dose clinical trial consisting of three cohorts testing doses of one, three, and five milligrams per kilogram of 1923, or placebo, dosed intravenously every month for six months The study enrolled 37 histologically confirmed pulmonary sarcoidosis patients. These patients had active and symptomatic disease at baseline and were stably managed on a dose of corticosteroid treatment of greater than or equal to 10 milligrams per day. The primary objective was to evaluate the safety, tolerability, immunogenicity, and pharmacokinetic profile of multiple doses of 1923 compared to placebo. Secondary objectives included assessment of the potential steroid-sparing effects of 1923, in addition to other exploratory assessments of efficacy, including lung function by evaluating forced vital capacity, or SVC, serum biomarkers, health-related quality of life scales, and PET imaging. Because it was a small study, it was not powered for statistical significance. The trial included a forced steroid paper where patients daily steroid dose was tapered to 5 milligrams from a stable dose of anywhere between 10 to 25 milligrams of prednisone by week 8. And the study aimed to keep patients at a dose of 5 milligrams until study completion. If the patient's symptoms got worse, the PI had the option to increase the patient's dose of steroid, largely based on clinical symptom worsening. If the patient's symptoms remained stable at week 16, the PI could attempt to titrate the patient completely off steroids, At the end of the study, we assessed steroid reduction in the 1923 versus placebo arms. Now let's recap some of the key findings. To begin, the study met its primary safety endpoint. Monthly dosing of 1923 was determined to be safe and well-tolerated at all doses. There were no drug-related serious adverse events and no signal of immunogenicity. These findings are consistent with previous studies of 1923 in patients and healthy volunteers. And they reinforce 1923's favorable safety profile, a key part of 1923's value proposition, considering current treatments typically have serious side effects and long-term toxicity for pulmonary sarcoidosis and other ILBs. In terms of the efficacy endpoints, perhaps one of the most remarkable findings was the improvement in lung function observed in patients who were treated with 1923 compared to placebo. Lung function is an important measure of disease in this patient population. The granulomas that form in the lungs of these patients can cause their lungs to become fibrotic, meaning they become stiff and make it more difficult to breathe. FVC is a measure of the volume of air exhaled over one full breath and is an objective measure of lung function in patients with ILD. The greater the FVC, the better the lung function. By decreasing steroid use, it might be expected that FPC would decline. In the placebo and 1 milligram per kilogram treatment groups, FPC remained stable or slightly declined. But in the higher dose treatment groups, patients had an improvement of 2.8% in the 3 milligram per kilogram treatment group and 3.3% in the 5 milligram per kilogram group, indicating that patients had their steroid dose substantially decreased, received 1923, and their lung function greatly improved compared to placebo. The PIs view these results as very important findings. From their perspective, improvement of 2.5% is considered clinically meaningful and comparable to what other studies in interstitial lung disease have shown. In addition, an amount of improvement is substantial might be expected in a year. So the degree and speed of these FPC percentage improvements demonstrated with 1923, particularly in the context of steroid taper and a short six-month study, were very impressive findings to these clinicians. As we mentioned, steroid reduction was one of the key assessments of efficacy included in the study. All patients enrolled were stably managed on steroids, and baseline steroid use was mostly balanced across treatment groups, with the mean daily steroid dose ranging from 11 to 14 milligrams per day. across the 1923 and placebo groups. Some patients were also taking background immunomodulators which were permitted in the study. While there was a slightly higher use of immunomodulators in the placebo group, it did not impact our analysis. Most patients were able to taper to five milligrams of steroids successfully. Nearly all of the patients in the 1923 treatment groups were able to taper to five milligrams while only 75% of the patients on placebo were able to do so. When you look at the average daily dose, we saw a relative reduction, an overall reduction of steroid use in all of the 1923 groups compared to placebo. Notably, we saw some impressive activity in the five milligram per kilogram treatment group, where throughout the duration of the trial, there was a 22% relative reduction of steroid dose compared to placebo, demonstrating these patients disease could be managed with lower steroid doses by receiving 1923. And when you look at the change from baseline overall for steroid dose, patients were able to reduce their steroids by 58 percent from what they were on when they entered the study on average. To put that in context, many PIs have stated that for patients receiving baseline steroid doses of around 15 milligrams per day, an overall reduction of 50 percent or greater would be highly impactful to patients if you also saw concomitant symptom improvement. Upon reviewing the findings, the PIs were very pleased to see an overall reduction greater than 50%, and one that was maintained throughout the post-taper period. Finally, we had three patients who were able to completely taper off steroids, all in the five milligram per kilogram treatment group. This was an outstanding finding. and sets up 1923 as a potential transformative steroid replacement therapy. To add to this, what we heard from the PIs is that there were additional patients who were well maintained at five milligrams of steroid, and in their opinion, could have possibly tapered down further to zero milligrams. In some instances, patients did not want to try to taper to zero milligrams, citing that they felt great at five milligrams. We're very pleased with the findings of steroid reduction, which on their own show a dose response and a measure of drug activity. But it is the steroid reduction combined with improvements in other efficacy endpoints like lung function and clinical symptoms which confirm the potential 1923 to be a very impactful therapy. Perhaps what made the biggest impression on the PIs were the clinically meaningful symptom improvements. These include quality of life assessments used for sarcoidosis symptoms determined to measure how patients felt at baseline compared to the end of the study. There were several validated symptom measures that were used in the study, including those for dyspnea or shortness of breath, cough, fatigue, and sarcoidosis symptoms. We assessed the findings compared to a defined minimal clinically important difference for each of these indices. And overall, if the patient's symptoms improved, remained stable or worsened. The findings showed dose-dependent, clinically meaningful symptom improvement in the 1923 treatment groups compared to placebo. While patient symptom scores remained mostly stable in the one milligram per kilogram treatment group compared to placebo, we saw a clinically meaningful improvement in nearly all symptom scores in the three milligram per kilogram treatment group. And in the eyes of our experts, drastic symptom improvement in the 5 milligram per kilogram treatment group. And these results are really what have our PIs excited. In their view, this is the only study in ILD to show substantial steroid reduction with meaningful symptom improvement. Physicians know firsthand the high cost of chronic steroid use in these patients. Steroids are known to have side effects that could greatly impact patients' quality of life as much as or even more so than the disease itself. Quality of life compared to current treatment options is of high priority to patients living with sarcoidosis. Many of the PIs have stated that they prefer to prescribe the lowest amount of steroid as needed, and in some cases, none, if at all possible. Yet, if they must do so, each and every milligram that can be reduced to prednisone in the near and long term is extremely beneficial. Finally, we'll comment on some of the biomarker findings. From a high-level takeaway, we saw that when removing steroid and adding 1923, patient biomarker levels were controlled in a dose-dependent manner compared to placebo. And this aligned to what we saw clinically in other studies. This includes the same inflammatory cytokines and key markers of sarcoidosis that we saw impacted by 1923 in our preclinical lung inflammation models, and a previous clinical study we conducted in patients with COVID-19 pneumonia. We expect to go into more detail of these findings at an upcoming medical conference. The results of this study support the advancement of 1923 to the next stage of clinical development, and we expect to initiate a registration trial in pulmonary sarcoidosis next year. We anticipate meeting with regulators, including the U.S. Food and Drug Administration, very shortly to discuss these data and subsequent clinical development and path to registration for 1923 for pulmonary sarcoidosis. As part of our regulatory efforts, we appointed Dr. Robert Ashworth as Vice President of Regulatory Affairs. Dr. Ashworth is an industry veteran with more than 35 years of regulatory and drug development expertise, including a track record of contributing to the FDA approval of more than 12 new drugs across a broad range of categories and disease indications. In addition to mapping out our regulatory strategy, since we reported the results, we've been preparing for next steps for 1923 in many other ways. As we mentioned, we conducted an investigator's meeting to present the findings and obtain valuable feedback that will contribute to trial design for the next study. We also presented the findings to our partner, Curin, to help determine the optimal ways in which they will be able to participate in the next study in addition to their development efforts of 1923 for ILD in Japan. While our current focus for 1923 is on pulmonary sarcoidosis and planning for the next study in that indication, the mechanism of action, translational work, and clinical data for 1923, combined with the overlapping disease pathology across ILDs, strongly suggest that 1923 could have potential in other ILB indications as well. There are more than 200 types of ILB that can cause fibrosis or scarring of lung tissue, primarily driven by aberrant immune response to an inhaled exposure or other insult. The four main types that make up roughly 80% of the population, these include connective tissue disease-related ILB, where lung manifestations are secondary to autoimmune diseases, such as systemic sclerosis, chronic hypersensitivity pneumonitis, which results from an exaggerated immune response to environmental antigens, and idiopathic pulmonary fibrosis, the prototypical fibrotic lung disease. We estimate there are over 500,000 patients currently living with ILD in the United States and over 3 million patients globally. Like sarcoidosis, all of these diseases have limited standard of care, with substantial morbidity and mortality. Outcomes for these patients remain poor despite current treatment options, with median survival as low as three years in certain cases. Scarring of the lung can occur in upwards of 20% of patients across all forms of ILD. Standard of care outside of IPF is treatment with immunomodulatory therapy, similar to those used in sarcoidosis. And like sarcoidosis, These treatments have limited clinical evidence of efficacy and are associated with significant long-term toxicity. When you think about some of these opportunities that we may be able to explore, we think we have a transformative therapy in 1923 with an addressable multi-billion dollar market. While we've been focused on advancing our 1923 clinical program, we've also progressed our preclinical pipeline which includes the development of anti-NRP2 antibodies for cancer and inflammation. We've discussed in detail the clinical proof of concept for 1923. What's also very exciting about this data is that it validated NRP2, 1923's binding partner, as a target. A broad receptor screen for 1923 led us to this very selective receptor, and we believe it is a compelling therapeutic target in a number of diseases, disease areas in addition to inflammation, including oncology. As NRP2 is well established as playing a role in various disease states, we utilized our in-house antibody engineering capabilities to develop a panel of blocking antibodies to selectively target distinct domains of this untapped target, including those interacting with semaphorens, VEGF, and certain chemokines such as CCL21. When it comes to cancer, NRP2 is upregulated on a variety of solid tumors, and it's particularly enriched in highly aggressive tumors, with expression linked to worsened patient outcomes in several cancers, which may include drug resistance to current therapies, such as chemotherapy or targeted agents. NRP2 is also highly expressed on key immune cells implicated in regulating cancer progression, including tumor-associated macrophages. and myeloid derived suppressor cells, among others. Antibodies that can selectively block different aspects of NRP2 signaling pathways may have therapeutic potential in these aggressive cancers where NRP2 is implicated. One of the antibodies we developed, 2810, is a fully humanized monoclonal antibody that specifically and functionally blocks the interaction between NRP2 and VEGF. This is our lead anti-NRP2 antibody and IND candidate in preclinical development for cancer. The role of NRP2 and VEGF signaling in the tumor microenvironment and its potential importance in the progression of certain aggressive cancers is becoming increasingly validated. We have generated a body of compelling preclinical data in both human-derived and animal models demonstrating 2810's blocking ability and tumor inhibitory effects. We continue to investigate 2810's mechanism of action and the potential ways in which this novel antibody may confer some of the anti-tumor effects that we have seen. Recent data announced just this week at CITC adds to our growing body of knowledge of this antibody's mechanism of action. The research details the effects of 2810 on tumor-associated macrophages, or TAMs. differentiated from human triple negative breast cancer tumor cells. It is well known that TAMs suppress T-cell activity, cells that play an important role in mounting an immune response to kill cancer cells. TAMs also play an important role in the induction of epithelial mesenchymal transition, or EMT, a process that is of great importance in regulating tumor growth, progression, and metastatic cascade. as well as being implicated in tumor evasion of the immune system. Furthermore, these highly suppressive TAMs express high levels of NRP2. Treatment with 2810 was shown to decrease the suppressive capabilities of TAMs against T cells compared to untreated TAMs. Furthermore, TAMs treated with 2810 showed a decrease in ZEB1 gene expression, which is a master transcription factor regulating EMT. These results suggest that 2810 may be able to treat cancer by targeting tumor immune avoidance mechanisms as well as regulating EMT. These findings demonstrate for the first time modulation of key cells associated with suppressing T-cell mediated anti-tumor responses in the tumor microenvironment as a result of treatment with 2810. These data advance our understanding of 2810's mechanisms of action and the process by which it may inhibit tumor progression and disrupt immune invasion, suggesting the ways in which 2810 may be a potentially effective anti-cancer agent, and these findings will help support the clinical development of 2810, including, as I mentioned, a planned phase one study in cancer next year. Finally today, we want to emphasize the magnitude of what the recent clinical proof of concept for 1923 means for our tRNA synthetase biology platform, which is a foundation for ATAR science and our approach to drug development. We have shown that we can effectively take a tRNA synthetase and its biological pathway and translate it into an innovative therapy with the potential to improve outcomes for patients. In essence, we are well on our way to fulfilling our mission of creating a new class of medicine. Our first case, as evidenced from the data from 1923, comes from HARS, the synthetase driving our lead clinical program that has shown promise for pulmonary sarcoidosis, but has great potential for other ILDs as well. And through HARS, we have found a compelling and largely untapped novel target in NRP2, which also forms the backbone of our lead preclinical program with 2810 and two additional NRP2-targeting antibodies with implications for cancer and inflammations. As a reminder, there are 20 tRNA-synthetase gene families. ATAR's intellectual property portfolio covers protein derivatives from all of these, with over 300 protein compositions patented. The results for 1923 are a major step forward in unlocking the potential and promise of this novel biology platform. I will now turn it over to our Chief Financial Officer, Jill Brodsfoot, to review our financial results.