Attovia Therapeutics, Inc. (ATTO) September 16, 2026 Conference Transcript

Hi, good morning, everyone. Welcome to this session of the Morgan Stanley Global Healthcare Conference. I'm Judah Fromer, one of us has been biotech analysts. We're very excited to have Tao Fu, President and CEO from Atovia, with us. Let me just get through a quick disclosure, Tao, before we get started. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morgansanley.com forward slash research disclosures. All right, so with that out of the way, Atovia had an exciting IPO in August. Congrats to the team on that. Before we dive in, can maybe give the audience a quick intro with a bit of background on how the team came together and the company formation?

Sure.

Well, Judah, thanks for having me here.

It's a real pleasure. So Atovia was founded just a little bit over a few years ago in June of 2023 and really with a simple thesis of trying to change the paradigm for immune media disease treatment with our auto body platform based biologics. So we started with a small group of highly experienced drug developers and scientists with early backing from Fraser Life Sciences and VanBio. And really, there's two shared beliefs between the teams, our investors, that first, the auto body platform can really have the potential to deliver breakthrough efficacy for INI treatment. And having a small and highly focused and integrated team can deliver exceptional speed. So that's what we have done over the last three years. So we moved our lead program, Auto 1310, from concept to clinical proof concept in patients. We have built a sustainable pipeline of near-development stage multi-specifics and also completed an up-sized IPO. So we're very proud of that speed and execution, but we also think it's very repeatable. Right.

It's been busy. So I want to spend a little more time on the platform. Maybe just walk us through the capabilities of the platform, how candidates are screened and developed, what advantage does the autobody platform provide over other approaches to antibody or biologic development?

Yeah, so the autobodies are a bipartiotopic modality, which means it has two VHH or an antibody binding arms, and each of them binds to a separate epitope on the same protein target, and they're connected by a linker. So our proprietary linker technology basically enables each of the VHH arms to interact ultimately with the target. So autobody-based therapeutics have several unique attributes which make them ideally suited for complex biologics. I can give you a few examples. So the bipartite binding hold give you ultra-high affinity and often best-in-class potency. So auto-1310, as an example, those highly potent monospecific against IL-31 ligand, and autobodies are highly modular, so they're like Lego pieces. They can be put together in multispecific formats and retain potency against individual targets, so we can also easily extend the half-life, so great for building multispecifics. We can also tune the affinity of our binders to create truly conditional end-gates by specific, So we can use high affinity to target a specific cell type and then lower affinity to activate the effector function when the drug is in the tissue. So, so far, you know, we have done over 15 campaigns and we have 100% success rate against all the targets we selected.

Great. And like you said, this modular nature of the platform, the building blocks are nanobody pairs. So maybe talk about the rationale for using nanobody binders over other formats. What have we learned about nanobodies from other programs?

Yeah, so, you know, nanobodies are really validated commercially, right? So there are multiple FDA-approved products. There are multiple products containing nanobodies in late-stage clinical development with success. So it's very validated. It also, it's very small. and it's very flexible, highly engineerable, so it gives us the binding domain that's ideally for a bipartite binder, but also it has generally low immunogenicity risk in humans. So I think our experience with auto 1310 so far is we have seen low immunogenicity.

Okay, great. So maybe moving to that lead candidate 1310, it's a biologic targeting IL-31, like you said, you're about to move into phase two for chronic itch. But before we get to some of the data and development plans, maybe frame the opportunity in chronic itch for us. It encompasses a lot of different conditions, but broadly, what's the unmet need? What's the rationale for targeting IL-31?

Yeah, so chronic itch or pruritus is a major but underappreciated disease burden. So it really spans through dermatological to systemic conditions. These patients really suffer from persistent debilitating itch that, you know, ranging from, you know, skin damage to loss of sleep, depression, and sometimes suicidal ideation. So it's a major disease burden. It also is highly prevalent. So we have over 15 million patients in the U.S. being impacted, and just between high HAD and CPUO, the two indications we're trying to take 1310 to late stage development, we have over 10 million patients, right? So IO31 has been now widely recognized by the medical community to be the primary driver of itch, right? Sometimes it's called the itch cytokine, and it was really found to be elevated in a variety of these chronic itch conditions.

We really think it's the best target for itch.

Okay.

Excellent. And, you know, kind of the precedent product here is going to be Nemluvio, which investors will be, you know, familiar with, which targets the IL-31 receptor. ETO-1310 targets the IL-31 ligand, like you said. So what might be the potential advantages of targeting the ligand as opposed to the receptor?

Yeah, I think neemolizumab is a great analog for us. It's clearly validated the role of IL-31 pathway in itch. and we believe 13 times by targeting the ligand have several advantages. So specifically to a question about the ligand versus receptor, so neumolizumab actually suffers from this known reverse dose efficacy issue. Basically, their highest dose performed worse on efficacy than the lower doses in three separate phase two trials. And Dr. Brian Kim published on this, you know, basically the hypothesis is because IL-31 receptor dimerized with OSMR beta for IL-31 to signal. So if you hit IL-31 receptor really hard with nemolizumab, you release the free pool of OSMR beta, which have an alternative binding partner called GP130. And that's an alternative pro-inflammatory pathway. So this paradoxical loop basically contributes to starting to lose efficacy. And obviously, if you target the ligand, you are completely free and clear from that pathway. We also believe we can potentially achieve faster itch relief, and there is the validation from a canine drug called Cytopoint. Basically, it's a highly effective anti-IL-31 molecule antibody, And if you inject cytopoint into dogs, sometimes you get itch relief in minutes to hours. It's a very fast onset. So we're also hoping to see that in humans with 1310.

Are there any other aspects of molecular design for 1310 that could differentiate versus Nemluvia besides the particular target?

Yeah, I think there's a couple in addition to the reverse dose issue we just talked about for our 31 receptor. you know, we're using the autobody, the bipodic binding mode, which give us really almost no off rate, and we can achieve higher potency with that binder. And, you know, our PK and target engagement data so far also suggests we have, you know, full suppression of vial 31 for at least 12 weeks, which support quarterly dosing. and NEMO, as you know, is primarily a monthly injection drug.

Yeah, excellent. And you've reported some Phase I data for 1310 in healthy volunteers and patients. Maybe tell us about the design of your Phase I study. Give us kind of the highlights on what's been reported thus far. What was behind your decision to include placebo patients in this lab?

Yeah, so the Phase I study really has three parts. You know, in Healthy Volunteers, we have single ascending dose IV and sub-Q, and also MAD, sub-Q only. And the part three is really in, it's a randomized placebo-controlled study for both chronic paritis or CPUO and the high HAD population. and participants are follow-up for 12 to 16 weeks, but we give only one single subcutaneous dose. So the clinical profile we have seen so far has been very encouraging. So really, you know, excellent safety, you know, great target engagement. We've been able to show full suppression of our 31 to support the quarterly dosing, and we have encouraging, you know, clinical signals from both patient cohorts, very fast and deep, each relief for both populations and specifically for AD, we're also seeing pretty rapid and meaningful, you know, lesion improvements in terms of both EZ and IgA. Right.

Great. Maybe just a little bit more on the target engagement data supporting that potential for quarterly dosing. Maybe just discuss the data we've seen.

Yeah. So we have an ultra-sensitive assay for IL-31. So in Healthy Volunteer, we are being able to show that we have full suppression of free IL-31 at the 95% level for at least 12 weeks. And the early patient experience we have so far is also consistent with us. And we have other ways to really triage this. For example, we can look at IC90 levels based on our animal models, the effective dose, and the QPS, QSP modeling based on cytopoint efficacy. All these data points consistently point to we can actually achieve quarterly dosing. Okay, great.

And like you said, you saw encouraging responses in both patients with chronic pruritus and atopic dermatitis. And I know it's a single dose and a short study, but maybe frame the magnitude and the kinetics of those responses versus approved biologics, if you can.

Yeah, we have seen very deep and, you know, rapid each relief with, I would say, one single unoptimized dose really compared quite favorable to the benchmarks we have. You know, for CPUO, our pooled PPRS-4 responder rate for 1310 is about 65% at week four. That's versus about 18% for duplemab in the part three of their phase three study at similar time point. And for high HAD, our PPRS-4 responder rate is about 44% at week four. which versus neemolizumab is about 28%. They're shown in their phase three study. And that's also in the high itch group. That is same as our study. So I think we basically showed really two active doses in two indications that compare pretty favorable to benchmarks from the itch standpoint. And as I mentioned earlier, in the ADE cohort, we also showed pretty meaningful and fast, easy reduction for lesion.

Excellent. And we'll dive into this a bit more later, but I guess just maybe up front, in what ways do the data provide kind of positive read-through to the platform, other candidates that are behind 1310, maybe just from a high level, address that?

Yeah, I think all the 1310 data is the first human validation of our platform. So we're basically able to demonstrate that an autobody-based therapeutics can be dosed subcutaneously. We can have very strong and durable suppression of the target, favorable PK and safety and immunogenicity profile. And broadly speaking, basically the design principle or the criteria we have for the Audible by the base of therapeutics pre-clinically translated into human pharmacology and create encouraging clinical activities, that really bodes well for our platform.

Okay, excellent. And like you said, you're going to report full Phase I-B results for 1310 in the fourth quarter. Can you tell us what data we're going to be getting? What do you hope to see in that update? It's a single dose again, so where should investors be careful not to read too much into the data that you'll share?

So the Q4 update will include the full follow-up for the two patient cohorts for up to 12 to 16 weeks. So 16 weeks visit is an optional visit. So the data will include, you know, obviously safety, you know, target engagement. You know, we want to see whether the targeting engagement is durable. You have the full time course of the clinical responses for both populations and obviously the completed assessment of immunogenicity. So what we're hoping to see is, you know, whether the early clinical signal is sustained, whether we have durable target engagement to continue to support quarterly dosing, and also the favorable safety and low immunogenicity we observed so far kind of carry through to the full follow-up period. I do want the investor to remember this is a relatively small phase one study, and the primary objective of the study is to assess safety, PKPD, and the initial clinical signals. It really doesn't define the dosing regimen or even the duration. We also allow rescue therapy after week four. Therefore, the available, and it's one single dose, so the available week four data we already have really is the most important data set for this trial, which we already demonstrated we have two active doses in two different populations. So I think the right way to use the full Phase I-B data is really to confirm our biological thesis, but also inform our Phase II dose and regimen selection. I think I would also like to mention in our Phase II studies, we also plan to give multiple doses in the induction phase. We can maximize efficacy before we start maintenance.

Yeah. Okay. So speaking of the phase two, so you'll be advancing 1310 into phase two studies in, like we said, chronic pruritus of unemersion CPUO and high atopic dermatitis in the first half of next year. So there are no approved therapies in CPUO and not many development precedents. I guess with that in mind, how are you approaching the design of the CPUO phase two and any learnings from other studies that you're planning on incorporating?

Yeah, CPU is a real and now widely recognized disease, and as you point out, there's no FDA-approved therapy, so we really believe the trial design and execution matter, and CPU is diagnosed by exclusion, and it can have meaningful placebo responses, so our phase two design is really trying to mitigate those risks. So, you know, we're planning to conduct a very large 300-patients global study that will be the largest study to date for this indication. Two active dosing strategies and one large placebo group.

So given the large effective size we see in our Phase I-B, we really kind of overpowered the study to really maximize our chance to win. Okay, that makes sense. and you've engaged with FDA on the Phase II design, submitted the protocol to the agency. Maybe talk about any feedback you got from the agency, any surprises within that feedback, or maybe just elements of the conversation.

Yeah, we have very constructive dialogue with the FDA, and really their feedback is broadly consistent with our Phase II design. So because, you know, CPU is, you know, obviously no approved therapy, FDA provide meaningful feedback on inclusion-exclusion criteria, study endpoints, and how do you characterize a dose response. So we have submitted our protocol to the FDA after incorporating all those feedbacks. I would also say that we have learnings from other later-stage CPU studies, like the DUPI study. There will be regulatory pathways. ways they established, which could benefit our program.

Okay, excellent. And then just touching on the phase two in atopic dermatitis, so maybe just elaborate on the decision to pursue development in mild to moderate patients with high itch specifically.

Yeah, so I think our thesis there is that the disease burden for AD is not fully captured by lesion severity. So there is this distinctive clinical phenotype where a patient can have more moderate lesion. It's an easy score in the 7 to 16 range, but they have very severe itch. It's a very large and underserved segment where I think systemic therapy, specifically focused on itch like 1310 with also infrequent dosing, could be very attractive compared to, you know, branded topicals because there's no biologics approved in that segment. It also gives us a very differentiated development pathway versus sort of the more, a lot more crowded, moderate to severe, easily above 16-dupe market. On the more severe spectrum, we do think IL-31 pathway could play an important role, either as a standalone therapy for certain high-itch patients or in combination with other drugs. But we have also a bispecific, which incorporates both 13 and 31 to address itch and inflammation simultaneously.

And maybe just to follow up on that, I guess, what you've heard in terms of NEMO utilization and efficacy within that mild to moderate high-itch population.

It is not approved for that. NEMO has a label for either 16 and above. There might be some off-label use, but for us, this is a true expansion opportunity.

And then maybe briefly just touch on development plans for 1310 and other pruritic indications. I think you recently received IND clearance for a study in cholestatic pruritus. What are kind of go-forward plans for this molecule beyond these two indications?

Yeah, so, you know, yes, we did receive IND clearance to study 1310 in China for a cholestatic pruritus associated with PPC and PSE patients, and we actually received this approval within 22 working days. You know, based on their new innovative therapy, you know, paradigm. You know, it is our first foray into the systemic itch outside of dermatology. If we're successful there, I think systemic itch conditions like cholestatic or CKD-related paritis could represent a very meaningful upside in addition to CPU and high HAD.

Okay, excellent. And I want to make sure we cover some of your preclinical programs, too. So maybe first starting with 2306, this is a bispecific targeting IL-31 and 13. These targets have obviously been individually validated for atopic dermatitis and proragonodularis. But if these targets are inhibited simultaneously, should we expect better outcomes? How distinct and complementary are these two pathways?

Yeah, we believe IL-13 and IL-31 are two complementary and non-overlapping pathways. You know, IL-13 obviously is the key driver for TH2 inflammation and skin lesions, where IL-31 is the primary driver of itch, but also, you know, impacts barrier dysfunction and neuroinflammation. IL-13 can have indirect effect on itch, but those effects tend to be slow and not complete. so really if you look at also the two pathways these are the only two clinically evaluated pathways that independently give you lesion control efficacy and they're also the only two commercially evaluated pathways to get approval by the FDA specifically for lesion control and as I mentioned 1310 we have demonstrated we have lesion efficacy potentially without TCS So the two pathways really kind of make a lot of sense to combine together. You know, hopefully that can help address both inflammation and itch simultaneously, but also give you very fast, deep, and durable responses. That's kind of the thesis we have, yeah.

And, you know, it's no secret that biospecific development landscape is becoming, you know, increasingly more crowded, you know, with, you know, I would say certain arms, certain aisle 31 targeting arms and then the aisle 413 pathway kind of being, you know, another target. But how might 2306 be differentiated from those other programs? And if you could include some commentary on differentiation versus aisle 4 targeting and the choice on aisle 13.

Yeah, I think our thought has always been the target selection within these two pathways are actually quite important and also nuanced. And first, IL-13 versus IL-4 receptor. You know, IL-13 targeting therapies like lebrachizumab or ZUMI has essentially similar or identical efficacy like DUPI. But by avoiding IL-4 receptor, it also avoids the risk of target immediate drug disposition or TMDD, which results in basically poor exposure and dosing frequency. So any IO4 receptor containing, you know, bispecific, for example, like the Bambusa BPT-001 molecule will suffer from TMDD, right? So you will likely have, you know, poor PK and, you know, will be struggling with commercially viable dosing. I believe the bambusa molecule is currently being studied in IV only once every couple of weeks. And then there's the IL-31 versus IL-31 receptor. So we talk about the reverse dose efficacy issue associated with IL-31 receptor. And if you think about it, that could be more problematic in a bi-specific format because if you limited dosing for the IL-31 receptor arm, you will likely impact the dosing on the IL-13. So I think the Xylab molecule target IL-31 receptor, and as we understand, it's also being studied in IV only right now.

Okay, interesting differentiation. And you'll be starting a Phase I healthy volunteer study for 2306 in the first half of next year. I think you said results kind of mid-2027. So what should we be looking for in terms of PKPD from that study?

I think we'll be looking for, you know, three things in that study. You know, we're looking for a favorable PK profile, and specifically the very long PK half-life we have been predicting based on our NHP half-life to really support quarterly or even longer dosing. And we're looking for robust target engagement for both pathways, so for both IL-13 and IL-31, and favorable safety and immunogenicity profile. I think if we can confirm all three things, our plan is to really move 2306 to a large dose-ranging phase 2 study directly and monitor severe atopic dermatitis. So we have a high-concentration sub-Q formulation ready to go for that study.

Okay, excellent. And I think investors have kind of been conditioned to look at biomarkers within these early AD studies. So maybe any benchmarks we should have in mind for STAT6 inhibition or torque reduction or any other biomarker you'd point to?

Yeah, I think for IL-13, probably the best marker for healthy volunteers is fossil STAT6. I think the data on TARC is pretty inconsistent if you look at the data from most of the approved TH2, you know, therapies. So I think phosphostopics is probably the most important. And obviously, we'll be looking at, you know, IL-31, you know, inhibition. And for us, you know, looking for that, you know, long, you know, PK half-life we're predicting based on our preclinical model. Okay.

Excellent. And I want to make sure we touch on your tri-specific 1091. So similar to our discussion on the other assets, maybe just talk about the target selection for this asset, you know, and what have we seen preclinically thus far for 1091?

Yeah, so 1091 is our global first-in-class tri-specific targeting TL1A, IL-23, P19, and integrant alpha for beta 7 in, you know, simultaneous in one single molecule, right? Sort of the trifecta. You know, we really think those three pathways are really distinctive complementary to each other. And it really, a molecule that can inhibit all three, give us the real potential to break through the efficacy ceiling of existing, you know, IBD treatment. So preclinically, we have shown we can highly, very potently inhibiting all three pathways at the same time without interference. and also in the YTFC-contained format that has very good developability. And our preclinical in vivo models also support that, you know, inhibiting all three pathways is actually a better activity than just one or two. So we obviously need to kind of confirm that in the clinic. But it's a really highly differentiated and, you know, unique molecule. which will allow us to test this hypothesis of whether we can break through the efficacy seal.

And maybe just a strategic question on this asset. How are you thinking about progressing development in IBD while also pursuing these dermatological indications? Do you think about partnering? Is this something that Etobia can do themselves or decide down the line with more data?

Yeah, I mean, 1091 is a very important internal value driver for us. I think in addition to the tri-specific concept, there are some very unique differentiating features like our TL1A binder, for example, is not only more potent than some of the monosal antibodies in phase three, but also avoid this high molecular weight aggregate issue, which could result in high ADA. So we think it's a very differentiated asset. It's a very important value driver for us. And our IPO gave us the full ability to really fund the study into clinical, early clinical proof of concept. But that being said, you know, we recognize IPD is complex. You know, it's going to be very costly to conduct large global studies. If there are partners that have deep development and commercial expertise, they could add value, right? So I think our strategy is really kind of maintain optionality. We'll continue to unlock the strategic value while we're evaluating different alternatives, and the goal is to deliver the best value for our shareholders.

And then maybe just quickly, with that upsized IPO, what is your cash runway fund in terms of operational activity that we've discussed?

Yeah, so the IPO, we raised over $300 million, and we still have about $115 million at the end of Q2. So, you know, combine the financial resources, we can fully fund our operating plan into 2030. And basically, it funds the two large Phase II studies for 1310 and all the other activities like cholecystic pruritus. We'll fund the 2306 program through a Phase II atoxidermatitis study and also fund 1091 through early clinical proof of concept as well. So I think we're in a very strong position. I think the strategic point is we actually have multiple near-term value inflection points for investors that are independent of each other.

Excellent. Okay, so maybe in the last couple of minutes we'll just tick through a mini-survey where we're asking all the management teams at the conference. So the first is on China's rise in biotech innovation. How are you thinking about your competitive position? Will this influence R&D or business development strategy potentially? Yeah, I think the Chinese competition is real, right?

But we kind of really see both as a threat and opportunity. internally for the pipeline we had I think so far we saw limited or non-existent competition for example the 1091 program we have not seen another tri-specific program that's advanced to our stage and we have certainly strategic interest from pharma on these programs so we know we're creating value there But our overall strategy with respect to China is to really raise our innovation bar, really trying to work on those concepts that are unique to our platform. I talk about the conditional bi-specifics, we haven't disclosed the targets, but both novel targets plus what our technology platform can uniquely do that's very difficult to be repeated. Really, that's our strategy.

And then just on AI, is there a way that Atovia is leveraging AI or thinking about the potential for AI to disrupt the broader industry?

Yeah, that is also real, okay? And I think so far for Atovia, we're trying to sort of incorporate AI into how we evaluate science and how our scientists, you know, doing science and think about maximize or optimize our workflow. For a core discovery, I think a lot of experts would agree that the true bottleneck is biology. That's where, you know, AI is kind of still have catch-up to do.

And then lastly, just on the regulatory side of things, maybe it's a bit early for you guys, but do you think about, you know, whether it's, you know, in evolving FDA, you know, pricing for drugs? Is there anything on the regulatory side that kind of garners particular focus from you?

I don't think it has a direct impact on Etopia because we're still relatively early stage. For example, MFN. You know, one thing we have done is, because of MFN, really trying to be conservative on our commercial forecast. Like for 1310, for example, we included U.S. revenue only and also making very conservative pricing assumptions. But that being said, we still get to like $11 billion peak sales, right?

So it's still pretty good. Thank you again, Tal. This was great. We appreciate you being here. Yeah, thank you for having me. Yeah, appreciate it.