Good morning. Welcome to the Arrhenia Pharmaceuticals' fourth quarter and full year 2025 conference call. Please be advised that a Q&A session will follow Arrhenia's prepared remarks, and we ask you to please ask one question and one follow-up, then return to the queue. I will now turn the call over to Peter Greenleaf, President and Chief Executive Officer of Arrhenia. Peter, please go ahead.

Good morning. We want to thank you all for joining us today to discuss Arrhenia's fourth quarter and full year 2025 update. Joining me on the call today are Joe Miller, our Chief Financial Officer, and Dr. Greg Keenan, our Chief Medical Officer. On today's call, we will report fourth quarter and full year 2025 financial results and provide an update on recent business progress. During today's call, we may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and actual results may differ materially. We are pleased to have delivered strong Leukkina sales in 2025, growing at a rate of 25% year-over-year. And for 2026, we expect net product sales of $305 million to $315 million, up 12% to 16% compared to 2025. And with that introduction, I'd like to now turn the call over to Joe to review our financial results. Joe?

Thank you, Peter. Total revenue for the fourth quarter of 2025 was $77.1 million, up 29%, compared to $59.9 million for the same period of 2024. Net product sales of LoopKindness for the fourth quarter of 2025 were $74.2 million, up 29%, compared to $57.6 million in 2024. Net income for the fourth quarter of 2025 was $210.8 million, up 14,957 percent from $1.4 million in 2024. In the fourth quarter of 2025, the company recorded an income tax benefit of $175.1 million, primarily due to the release of its valuation allowance on deferred tax assets that the company now expects to realize. Net income before income taxes for the fourth quarter of 2025 was $35.7 million, up 2,875% from $1.2 million in 2024. Deluded earnings per share for the fourth quarter of 2025 was $1.53, up 15,200% from $0.01 in 2024. Lastly, cash flows from operating activities for the fourth quarter of 2025 were $45.7 million, up 52% from $30.1 million in 2024. Total revenue for the year ended December 31, 2025 was $283.1 million, up 20% compared to the $235.1 million for the same period of 2024. As a reminder, the 2024 period included a milestone payment of $10 million associated with LoopKindness regulatory approval in Japan. Excluding the one-time milestone, total revenue increased by 26% over the same period in 2024. Net product sales of LoopKindness for the year-ended December 31, 2025 were $271.3 million, up 25% from $216.2 million in 2024. Net income for the year end of December 31, 2025 was $287.2 million, up 4,852% from $5.8 million in 2024. For the year end of December 31, 2025, the company recorded an income tax benefit of $173 million, primarily due to the release of its valuation allowance on deferred tax assets that the company now expects to realize. Net income before income taxes for the year end of December 31, 2025 was $114.2 million, up 1,443% from $7.4 million in 2024. Deluded earnings per share for the year end of December 31, 2025 was $2.07, up 5,075% from 4 cents in 2024. Lastly, cash flows from operating activities for the year ended December 31, 2025 were $135.7 million, up 206% from $44.4 million in 2024. As of December 31, 2025, the company had cash, cash equivalents, restricted cash, and investments of $398 million, compared to $358.5 million at December 31, 2024. For the year ended December 31, 2025, the company repurchased 12.2 million common shares for $98.2 million, and fully diluted shares outstanding will reduce from $149.8 million to $139.7 million. As a result of LoopKindness continued momentum, we are pleased to announce our 2026 guidance. We expect total revenue of $315 million to $325 million, up 11% to 15% compared to 2025. We expect next product sales of $305 million to $315 million, up 12% to 16% compared to 2025. Now, I would like to turn the call back over to Peter for some business updates.

Thanks, Joe. Turning now to AeroTintercept, we are very excited about the potential of this novel biologic in the treatment of a wide range of autoimmune diseases. As we've previously discussed, eritinercept is a dual BAF-APRIL inhibitor that was well-tolerated at all dose levels tested in a Phase I single-ascending dose study. Single doses of eritinercept led to robust and long-lasting reductions in immunoglobulin supportive of once-monthly dosing. IRINIA has initiated a clinical study of ARIC Intercept in one autoimmune disease and plans to initiate a clinical study in an additional autoimmune disease in the first half of 2026. So, in summary, we continue to drive growth in our commercial lupkinis business while at the same time advancing the clinical development of ARIC Intercept. We want to thank you for joining us on today's call and we look forward to taking your questions Now, let me ask the operator to open up the line for Q&A. Operator?

Certainly. We will now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. As a reminder, we ask you to ask one question and one follow-up to return to the queue. If you'd like to remove yourself from the queue, please press star 2. When you press star 1, a confirmation tone will indicate your line is in the question One moment, please, while we pull for questions. Our first question is coming from Maury Raykrol from Jeopardy. Your live is now live.

Good morning. This is Farzin on for Maury. Thank you for taking our questions. So your issued guidance for 2026 seems somewhat conservative given the 4Q run rate. So what are some of the specifics informing the commercial outlook and as it relates to what you're seeing in the first two months of this year?

President, on the first part, I don't think I got the first part of your question. Can you repeat it, what you're looking for there? I think you want to understand what's underlying the growth for the company for the year?

Right, like what's underlying assumptions for the 2026 guidance, and then what are you seeing in the first two months of the year to inform that?

Well, I think first off, you know, our strategy for the commercial business as leucinus continues to be similar to what we've done, you know, for the last probably six to 12 months, and that's to continue to stand on the, you know, the incredible data that we have in terms of the efficacy of the product and the treatment of lupus nephritis and the reduction of proteinuria as early as three and six months that we've seen, leveraging the expanded data set that we had with the extension study we did with the Aurora trial, which gives longer-term data, the biopsy study. And then last year, the introduction of the ACR and ULAR guidelines that actually did a really nice job, not just promoting novel products like lupkinis, but more importantly, more aggressively using diagnostics to identify proteinuria earlier in patients suffering from lupus to identify lupus nephritis. So our strategy hinges on really trying to change the whole treatment paradigm, the diagnostic paradigm, and then the early treatment aggressively of proteinuria. And we believe our drug does that better than the drugs that have historically been used to treat the disease and what's been seen to date with even the novel newly approved or novel drugs that have produced data. As for the question about the first two months of the year, we're not really giving any steer for the quarter, but nothing's out of ordinary for what we've seen historically. We've tried to put emphasis on the best predictor for what we're seeing going forward has been past history. So, we would refer you to Q1 of 2025 to look for any friends in the business.

Correct. Makes sense. And then a follow-up is on the, you recently terminated the phase three and the open level studies in the vocal study and the vocal extension, the pediatric study, and it mentioned like part DSMB recommendations. So, can you clarify whether DSMB is asking to stop, or is FDA refocused on the drug in any way?

Do you want to take that, Greg? Yeah, thanks for the questions, Greg Keenan here. So, the vocal study in its current form was one where, due to technical issues working with the clinicians, it proved to be very, very difficult to recruit patients for that particular study. So, we made a decision based on what we saw at that point that we terminate the study and plan to have negotiations soon with the FDA for further plans for meeting our pediatric commitments in lupus nephritis?

Yeah, I think just one thing to add in addition to that is we have data from the work that we've done up to this point. We have in-market data that we know from treatment of patients both on the adolescent and the pediatric side in the current market. So there's data that we can actually provide to the agency, and we look forward to a conversation with the agency about, one, meeting the commitment that we had to the agency, and two, what that would mean for how physicians should be guided in the treatment of pediatric patients. Last point here, remember that this disease is primarily a disease of women in the middle part of their life. It's not really a prominent pediatric condition. So while we had the commitment with the agency, this is not the burden of this disease in pediatric patients is quite small, and thereby the business opportunity being probably even smaller than that. Next question.

Thank you. Next question is coming from Joseph Schwartz from Learing Partners. Your line is now live.

Hey, guys. This is Will Soheikidon for Joseph Schwartz. Congrats on the quarter, and thanks for taking our questions. So just to start for us, I think previously you guys got into a development update for ART Intercept in early 2026, so can we still expect this update, and could you please provide some additional context for what this might entail? I understand that for competitive reasons, you're keeping the indications of focus close to the vest, but what about the overall study design and the size, just so we can have some visibility to the potential data disclosures, and is this a Phase 1B or Phase 2, and I have a quick follow-up. Thank you.

Well, thanks for the question. You know, we're obviously, from the last couple of calls, it should be obvious that we're excited about the therapeutic potential for BAPF-April inhibition across a wide range of these B-cell-mediated autoimmune diseases. As we mentioned on this call, we initiated a clinical study of eritinorceptin, one autoimmune disease, and we plan, obviously, as we said, to initiate another in an autoimmune disease in the first half of 2026. At that time, we'll disclose the indications for each study in the second quarter of 2026. So look for more from us. And I can't say whether we're going to get into trial design, et cetera, at that, you know, up until that point. But more to come by the second quarter of 2026.

Great. That's super helpful. Thanks, Peter. And then just one on loop kindness. I guess, you know, things have been going pretty well. I think, you know, raising guidance twice last year is a great indication that there's still some growing demand and momentum here. So, I guess, could you qualitatively just talk about what's going better than expected? Are patients staying on therapy longer? Are you adding more patients on commercial drug than expected? Are you seeing a better mix of insurers? I guess, what's the main driver of this continued strong performance as we head into 2026?

While we don't give individual commercial metrics anymore, what I can tell you, thank you for the question, is we are seeing growth across patients. We are seeing very solid and continued adherence to the product and persistency. And even the mix of our business, when looking at the average price per commercial patient per year, all continue to perform with a level of consistency. Again, why we've kind of steered to, if you look at the historical growth pattern of this product over the last three years, it's probably the best way to think about its growth pattern going forward. And if you do that, I think you'll see why we landed in the guidance range that we did.

Thank you. Our next question is coming from Arthur He from H.E. Wayne. Right, your line is now live.

Hey, good morning, Peter, and congrats on the quarter. So just to kind of follow up with the last question, so giving the guidance for the 2026, I'm just curious how much the growth is coming from the rheumatologist versus the nephrologist. And given we have the guidance, the new ACR guidance in hand for a while, do you believe we have reached a steady state of the guidance-driven prescribing? Or is there too early, like for the tails?

So let me break that question just in half. The first half was, are we seeing any break in terms of the trends on rheumatology prescribers as it relates to total revenue contribution versus nephrology? The answer to that is slightly. One of the things that is key to our mid to longer term strategy is to get earlier diagnosis and earlier treatment, which, by the way, I don't think is unique to Arinia. I think, you know, for the patients, for physicians, and for the future of this disease, we're strong believers that earlier treatment with drugs like leucinus are only going to have a short- and longer-term patient benefit and probably save more kidneys and more patients, extend more patients' lives over time. So rheumatology is key to that since these patients are SLE patients before they ever become diagnosed as lupus nephritis and catching them early and getting more aggressive treatment is really going to start in the rheumatologist's office. What I can tell you, because we aren't giving these specific metrics anymore, is we continue to see more prescribers in the room space. And while the business is pretty evenly broken between rheumatology and nephrology, it does favor the rheumatologist slightly, and that has been increasing over the last two years. The second part of your question was centered on why am I blanking now? Can you repeat it for me?

Yeah, I said, like, which meaning for the coming from the ACR guidance, the positive impact to the prescribing?

Well, I think it's, for me, it's, I would ask Greg to jump in here, too, if I miss anything. The guidelines emphasize earlier diagnosis, and we know there's a long way to go here. They recommend that every time a lupus patient comes in that they get a urinalysis and look for proteinuria as well as other indicators of the disease progression when they visit. What we do know is that doesn't happen every time they visit. And matter of fact, it probably happens less than 50% of the time that a patient visits an office. So if we can see that increase, we believe more proteinuria will be identified. when more proteinuria is identified, if, and this is the second part, it's identified, we see aggressive treatment. The guidelines say when you hit a certain target treatment level that the patient should then be treated. We also know from payer data and database data that's out there that that doesn't happen either. So more aggressive diagnosis, more aggressive treat to specific target of proteinuria. Lastly, the target of keeping a patient on drug for three to five years is clearly written in the guidelines. And we know that not just for leucinus, but for all drugs included, treating this more like a chronic progressive disease than an acute flare-up within the disease would all be a major progression for the treatment of the disease.

Yeah, no, I just agree with all those points. I think as clinicians become increasingly comfortable, confident in the new agents to include leukkinis, they're more consistently treating for longer periods of time. And so that's something we look forward to continuing to support in the rheumatology and nephrology communities.

Thanks, guys. Maybe just a quick one for Greg. So, speaking of the returner sector, Greg, could you remind us how the ADA situation for your drug when you see in the health form here?

Right. So, we mentioned in one of the previous calls that we have seen anti-drug antibodies at low titers at doses from 25 milligrams and above. At this point, as I noted previously, we didn't see any impact on association with injection site reactions or changes in the pharmacokinetic or pharmacodynamic profile of those with positive ADAs relative to those that have not. I'll just remind that each ADA assay is bespoke. antibody. It's not uncommon for drugs to have ADA levels, and we're quite confident as we go into subsequent work in our clinical trial program that we'll be able to understand more of the impact of these things. At this point, we're very encouraged with what we see, and our confidence is high on this molecule.

Next question today is coming from Sahil Dengro from RBC.

Your line is Hi, this is Sahil for Dakhneem. Thank you so much for taking your questions. My question is related to the competitive landscape. So we have seen that GAZAIWA was recently approved in the LN indication. So first question is, have you seen any impact of the positioning of leukinase in the treatment landscape following that launch? And the related question is that, is the approval of GAZAIWA incorporated in your guidance? and how do you think it will impact loop kindness going forward? Thank you.

Well, your first question about near-term impact from the launch, our answer would be no. We continue to, you know, see the business performing consistently as it has historically. The question of how it will perform on a go-forward and has it represented our guidance, I think our guidance represents a lot of factors, including, you know, new competition and progression of implementation of the guidelines and a multitude of different factors. As it relates to Gaziva, we actually, and all new potential competitors, as I mentioned earlier, I do think there's major room that can be made, improvement that can be made, both in awareness building at the patient level, awareness building on the treatment guidelines and diagnostic guidelines for the treatment of lupus nephritis, identification and more aggressive treatment of the disease. And all of these things will grow the market significantly before you ever get into the question of what's the better treatment option. And there we believe we have an incredibly competitive profile because the guidelines emphasize rapid reduction in proteinuria as early as three to six months. And I would challenge those on the call to go back and all these drugs stand on their own merits and will be used by physicians based upon the labels that they get. But if you look closely at the data, in terms of rapid improvement and reduction in proteinuria, generally speaking, the novel competitors that we're seeing in the marketplace appear to not have the ability to reduce proteinuria levels to target treatment guideline levels as quickly as what we've seen with leukkinis. Greg, what would you add?

Just to put a punctuation on that point, in our pivotal trial, we saw a 50% reduction in proteinuria within one month's time from initiation of loop kinase in those that were studied. And we know that for hitting the primary endpoint, our study was designed to show the benefits at 12 months, that goals were achieved for the most part by six months' time. I'll remind you that with Gozaiva, the primary endpoint is at week 76, and it took that long to be able to get important clinical responses, complete renal response. It took a year and a half, so the speed with which it works is notable. I'll also emphasize, relative to Peter's point, Gozaiva and B-cell targeted agents are one axis of the immune system. Leuconus is the only indicated treatment for LN that targets the T cell and also has a podocyte protection effect. So these are complementary mechism's action. The speed with which Leuconus works is notable. And to Peter's point, the awareness with regard to aggressive treatment that will be created by additional important agents in this area will just improve the likelihood of getting better patient outcomes.

Great. This is very helpful. Thank you so much for taking the questions.

Thank you.

Thank you. Next question today is coming from David Martin from Bloomberg. Your line is now live.

Good morning and congratulations on the quarter. I realize lukinus was launched in the U.S. market first. Do you expect the other global markets will catch up to the U.S. as far as penetration in the lupus nephritis patient population?

Well, while I can't speak directly for Atsuka, our partner in Europe and in Japan, I can give you what we hear through them and what we understand about the market. And I think the short answer there, David, is no. Every country has individual pricing and reimbursement and guidelines as to how they implement the global guidelines to the treatment of the disease. Pricing in every market is different and historically has been lower than what we've seen in the U.S. and North America. So at least from our expectations standpoint and contribution to this company, as we've said historically, we don't see it as a major contributor for our, you know, balance of the overall loop kindness business. Now, that being said, it has been every year, you know, a good contributor to our growth and sustaining of the business. Just on a relative basis, it's not a large percentage. And we don't expect that it's going to see the same type of aggressive treatment, pricing, and or reimbursement that we see in the United States.

Okay, thanks. And second question, are docs, are you finding, are they combining BNT cell therapies or choosing one or the other?

I think it's a really good question and one that, you know, we plan to continue to think about and potentially explore moving forward. And I welcome Greg's comments here, but just one intro. If you think about it, there's a rationale to potentially combine B-cell and more T-cell mediated therapies that could potentially even reduce proteinuria faster. But faster and or more effectively. But in addition, what we see probably in the market more often is that, you know, a lupus patients more are being initiated or looked at as potential candidates for B-cell, novel B-cell therapies earlier in the treatment paradigm. And what needs to be considered is a lupus patient when they have controlled symptoms of their lupus, i.e. maybe fatigue or skin condition or tender and aching joints. If those are controlled, yet they have a breakthrough of proteinuria, we often get the question of how to initiate a drug like leucinus if they're already on a B cell and they don't want to take them off of that B cell. So point being, there are two reasons to potentially address this. One is to more effectively manage lupus nephritis. The other is, could you not stop one therapy to continue another, and is there a safe and efficacious reason for that? And we are seeing it, and we are discussing and planning internally to potentially look at how we might address this through research and development work in the combination of the two. Great. Yeah.

And so thanks, Peter. And the only thing I'd add, because it is logical to consider combining these, I'll point out that the targeted approach of specific B cell and T cell related targeting makes logical sense relative to nonspecific immunosuppression. think of MMF and higher doses of glucocorticoids. So an additional question we get is what's the possibility of reducing some of those other nonspecific agents? So relative to your question, the science and the academics in the field are very much posing this as a logical way to do much more targeted, efficient treatment of patients with lupus in general, but for lupus suppress specifically. So more work to be done there. It's a logical question, and we intend to think about that a lot more in the upcoming months.

Next question today is coming from Olivia Brayer from Cancer Fitzgerald. Your line is now live.

Hey, good morning, guys. Thank you for the question. On ERA 10 Intercept, what's the cadence of updates that we should expect from that program? I mean, it sounds like next quarter we'll get some more meat on the bone, but beyond that, when can we start to expect to see more meaningful updates and data behind the program? And then given that you are looking at two indications, is there one that you maybe have higher conviction in or feel like your program has a better chance in?

Thanks for the question, Olivia. So I would expect to hear more in second quarter 2026. I'll kind of leave it at that because we're not giving any future view as to what we're going to disclose or not disclose for that matter. And I would say we don't have a preferential indication in mind in terms of probability for success or one we feel more committed to. I will say what we're excited about the most here is the fact that this looks like, not just from our work, but from the work of everyone working on both a Bath-April combination or straight Bath or straight April, that these products can address a multitude of different autoimmune diseases, inflammatory conditions. And that's probably what we're the most excited about. And we're trying to take a very thoughtful, methodical approach to where we start, where we create a beachhead. And if we're successful there, we think there's great opportunity to potentially build from there. And I think that's been proven by those who are doing work here as well. So more to come. A little bit of a non-answer. I apologize for that. But it's not because we don't want to talk more about the details of our plan. We just want to be purposeful about how we roll it out.

Okay, understood. And then a follow-up on Gaziva. What are you guys hearing in terms of what Roche is doing to grow that market? And what's maybe been the initial feedback from physicians just around how they're thinking about sequencing therapies now that there are multiple options available?

Surprisingly, it's been a little bit quiet. it. I mean, much like Ben List, the focus appears to be on the larger piece of the population. For context purposes, you've got an SLE population that's, you know, hundreds of thousands of patients in the U.S. and an LN population, which is a subset of that SLE population, that's probably tens of thousands of patients. So if you think about it strategically and from a positioning standpoint, and I think as many are aware, because I've also produced their data in lupus and it looks like they'll have a good regulatory pathway in lupus as well, you'd probably want to position these products further upstream for earlier treatment in lupus with the potential to, and not that they've done research this way, avoid kidney complications down the road. We know that's how Benlista is currently positioned in the marketplace, and I would think it's highly likely that Gaziva is going to be positioned there as well. We don't have any specifics on marketing materials or how they're positioning it, lupus nephritis specifically, but Greg did give a good articulation earlier of where we see the competitive profile here, and we honestly and truly do believe that a rising tide lifts all boats here. More patients getting identified with nephritis, more patients getting aggressively treated with lupus, awareness building, treatment guideline adoption all grow this market for patients and for the drugs that are trying to be utilized here for those patients.

Thank you. We have reached end of our question and answer session. I'd like to turn the floor back over for any further closing comments.

No, I want to thank everybody for joining us on the call today. We look forward to further updates in the future, and have a great day.

Thank you. That does conclude today's teleconferencing webcast. You may just connect your line at this time and have a wonderful day. We thank you for your participation today.