ACELYRIN Inc

NASDAQ:SLRN

Earnings Call Analysis

ACELYRIN Outlines Q2 Financials and Program Advances

ACELYRIN has shown significant progress in clinical, corporate, and financial areas. With an IPO generating $621 million and total funds of $823 million, ACELYRIN is well capitalized through critical milestones. R&D expenses rose to $30 million, while G&A expenses increased to $12.7 million due to expanded capabilities. The company experienced a net loss of $26 million in Q2 2023. The HS Phase 2b/3 study and PsA data have been accelerated with the former expected in Q3 2023, and the latter's top-line readout now set for Q1 2024.

Accelerated Clinical Trials Pave Way for Promising Therapeutics

The earnest pace of clinical trial enrollments brought forth an encouraging update. Part B of the Phase 2b/3 trial concluded enrollment expeditiously, brewing anticipation for top-line results in the third quarter of 2023, a significant stride ahead of schedule. Similarly, a Phase 2b/3 trial for treating psoriatic arthritis with izokibep has surmounted its enrollment phase briskly, promising to deliver top-line results in the first quarter of 2024, well ahead of the initial mid-2024 estimate.

Izokibep's Potential: A Beacon of Hope for Chronic Inflammatory Conditions

Izokibep, a frontrunner in the therapeutic arsenal, has shown remarkable potential in treating chronic inflammatory diseases, reflected by significant improvements across various disease manifestations. In psoriatic arthritis, izokibep's efficacy shone through with a majority of patients achieving marked improvements in arthritis and skin conditions, and an unprecedented rate of enthesitis resolution after 46 weeks. These results support the underscoring hypothesis that izokibep's high potency and diminutive molecular size could lead to meaningful benefits, painting a hopeful picture for patients afflicted with debilitating conditions like psoriatic arthritis and Hidradenitis Suppurativa (HS).

Expanding Horizons: Izokibep Set to Address Axial Spondyloarthritis

Eyeing a future filled with promise for axial spondyloarthritis sufferers, plans are afoot to launch a Phase 3 program with izokibep in 2024. With its proven track record in quelling enthesitis, a central symptom, izokibep's potential beckons a new dawn for therapeutic intervention in this sphere where significant needs remain unmet. Additionally, a nascent Phase 2b/3 trial has introduced izokibep as a potential game-changer for treating uveitis, a condition with limited therapeutic options, fueling hope for a breakthrough.

Lonigutamab: A New Contender for Thyroid Eye Disease Management

The recent addition of lonigutamab to the clinical portfolio has brought about a paradigm shift in the treatment perspective for Thyroid Eye Disease (TED). Outshining the efficacy of teprotumumab by up to 75-fold, lonigutamab could address the caveats of current intravenous therapy with its potent and patient-friendly subcutaneous administration. This not only promises enhanced safety and convenience but stands as a testament to the relentless pursuit of fulfilling unmet medical needs with innovative therapeutic approaches.

Earnings Call Transcript 2023-Q2

[Operator]

Good afternoon and welcome to the ACELYRIN, INC. Conference Call to discuss its Financial Results for the Second Quarter 2023 and Other Corporate Updates. This conference call is being recorded today, August 14, 2023.

I would now like to turn the conference call over to Tyler Marciniak, Vice President of Investor Relations, Communications, and Corporate Operations for ACELYRIN. Tyler?

[Tyler Marciniak]

Thank you. Good afternoon, everyone, and thank you for joining us. Before we begin, I'd like to remind the audience that this conference call will contain forward-looking statements such as those related to our development milestones, including progress of our clinical trials and anticipated data readout, our future financial and operating results and investments, the pipeline and program potential of izokibep, and our ability to commercialize our product candidates. These forward-looking statements involve risks and uncertainties that could cause our actual results and events to differ materially from those contained in such statements.

We urge you to review the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended June 30 filed with the SEC and also available through the Investor Relations section of our website at acelyrin.com, along with statements contained in today's press release and our slide presentation, which identifies certain factors that could cause our actual results, performance, and events to differ materially from those contained in such forward-looking statements. Additionally, these statements are based on information available to us today, August 14, 2023, and we undertake no obligation to update them as circumstances may change.

Joining us on today's call are Dr. Shao-Lee Lin, our Founder and Chief Executive Officer; Dr. Paul Peloso, our Chief Medical Officer; and Gil Labrucherie, our Interim Chief Financial Officer.

I will now turn the call over to Dr. Lin. Shao-Lee?

[Shao-Lee Lin, Founder and Chief Executive Officer]

Thank you, Tyler, and good afternoon, everyone, and thank you for joining us for ACELYRIN's first quarterly earnings call as a public company. ACELYRIN is a late-stage clinical biopharma company focused on identifying, acquiring, and accelerating the development and commercialization of transformative medicines. We are driven by our sense of urgency to bring life-changing therapies to patients globally, a core value that we refer to as Courageous Caring. And our initial focus is on the treatment of immunologic diseases, an area where our team brings industry-leading expertise.

We acquired our portfolio of product candidates with the intent to develop and commercialize novel therapies that we believe may provide the opportunity to offer clinically meaningful differentiated benefit for patients. Our strategy is to identify candidates we believe are diamonds in the rough where, based on molecular characteristics, our collective experience and expertise, and the evolving scientific and medical understanding, we can establish development plan that test whether or not our hypotheses are correct. And if so, then what the potential benefits could be for patients.

Since our founding in 2020, we have created a robust portfolio. This includes our lead program, izokibep, which is a small therapeutic protein whose high potency and small molecular size we believe can drive clinically meaningful differentiated benefit for patients across multiple indications, truly a potential pipeline and a program. Beyond izokibep, we're also advancing our earlier clinical-stage programs, lonigutamab and SLRN-517, initially being developed for thyroid eye disease and chronic urticaria, respectively.

We have previously shared some of the compelling data with izokibep across two indications: hidradenitis suppurativa and psoriatic arthritis. Each of these, and even more so, the both together, have supported our original hypothesis that the small size and high potency of izokibep could offer the potential for clinically meaningful differentiated therapeutics.

Later in the call, I look forward to sharing with you more context for our clinical progress, including new data related to improvements in draining tunnels from the open-label Part A of our Phase 2b/3 trial of izokibep in HS.

In addition to continuing to advance our leading immunology portfolio, we continue to build an exceptional team of experienced biopharma leaders with proven track records of building strong, innovative, and diverse teams across the healthcare industry. Most recently, we had the pleasure of welcoming veteran immunology sales and marketing leader, Ken Lock, to our team as Chief Commercial Officer. This is a key leadership position for us as we endeavor izokibep toward commercialization. Ken brings decades of commercial leadership expertise in dermatology and rheumatology, and we are looking forward to his contributions to our ongoing success. Also, we previously announced that Mardi Dier, Chief Financial Officer and Chief Business Officer, had resigned. Mardi served with us during important times for the company, and we thank her for her contributions and wish her well in her future endeavors.

I am pleased that Gil Labrucherie has agreed to join us as interim CFO. Gil previously served as CFO of the company from July until November of 2022 when he left biotech to address personal family matters. His availability at this time enables seamless continuity of ongoing activities, and he will address our financials in greater detail later on this call. However, I do want to make one more comment related to the financials, and that is to reiterate our strong financial position from which we plan to deliver on key milestones across several indications. Following our successful upsized IPO in May, we are fortunate to be operating from a position of strength with more than $820 million at June 30th.

We continue to build a leading, sustainable biopharmaceutical company with the goal of serving multiple large global markets with clinically differentiated new medicines in immunology and beyond. We are incredibly grateful to all of our investors, new and existing, for their continued support and confidence in our ability to deliver on our ambitious vision.

Given this is our first earnings call, I'd like to spend a little time diving deeper into the exciting and rapid progress we continue to make with our clinical programs. Today, I will review our lead program, izokibep, across its multiple indications, and then I will turn the call over to Chief Medical Officer, Paul Peloso, for a review of our promising earlier-stage programs, lonigutamab and SLRN-517.

Recall that izokibep is a small protein therapeutic designed to inhibit IL-17A with high potency through tight binding affinity, the potential for robust tissue penetration due to its small molecular size, about one-tenth the size of a monoclonal antibody, and an albumin-binding domain that extends half-life. And we have hypothesized that this high potency and small size can lead to clinically meaningful differences in efficacy relative to the market in monoclonal antibodies against this target and without the introduction of new safety liabilities. We are pursuing late-stage development of izokibep across a number of indications where IL-17A inhibition has been validated. These include HS, PsA, uveitis, and axial spondyloarthritis.

Let me begin with the progress we've made with our HS program. HS is a chronic inflammatory disease characterized by skin abscesses, inflammatory nodules, draining tunnels, scar tissue, malodor, and pain, often resulting in permanent disfigurement and social stigma, and all of this contributing to poor quality of life. HS affects more than 300,000 patients in the U.S. with more than half of these patients considered moderate to severe.

There is currently only one FDA-approved treatment for HS, and a significant need remains for new medicines that provide more rapid and complete resolution of the disease. We've long known that drug exposures in HS are lower compared to other inflammatory conditions and had hypothesized that the high potency of izokibep on two IL-17A, as well as a small molecular size, again about a tenth of the size of a monoclonal antibody, could generate deep levels of clinical response due to robust tissue penetration and potent target engagement.

We designed our Phase 3b trial with a Part A and a Part B. Part A was an open-label study of 30 patients that we conducted to test our hypothesis. Our benchmark for success in Part A was to determine if we could demonstrate clinical response as good as or better than the leading data available and without introducing new safety liability relative to the safety profile of the marketed IL-17A inhibitors. We presented results from Part A during a late-breaker podium session at AAD earlier this year and reported high orders of efficacy responses at 12 weeks, including achievement of HiSCR100 response in a third of patients.

HiSCR100 is a stringent measure of disease resolution in HS as it requires the same individual to achieve both abscess and nodule resolution without the formation of new draining tunnels. Today, we also announced additional analysis from Part A of the Phase 2v/3 trial in HS from patients with at least one draining tunnel at baseline. It is important to note that this analysis is based off of a small data set with numbers of patients in the high single to low double digits. In this data, treatment with izokibep resulted in improvement of at least one draining tunnel as early as week four in two-thirds of continuing patients. Week four was the first time point assessed, and this percentage remained consistent to continuing patients through the week 12. Furthermore, half of continuing patients improved by at least two draining tunnels by week eight, which remain consistent through week 12. This is an exciting development for patients because of the speed of response, its ultimate magnitude, and consistency over time.

The combination of the HiSCR100 results as presented at AAD and today's data on numbers of draining tunnels are encouraging, we believe that the full control of active inflammation is important to enable the early improvements observed in the number of draining tunnels. As a reminder, Part B of the Phase 2b/3 trial is a double-blind placebo-controlled randomized trial of more than 170 patients intended to serve as part of the registrational package for izokibep in HS. Enrollment of Part B completed ahead of schedule, accelerating anticipated top-line results into the third quarter of 2023 from the end of '23.

In Part B, participants were randomized to receive either 160 milligrams of izokibep weekly or every other week or placebo. An independent data monitoring committee conducted a pre-planned review of unblinded efficacy and safety data from Part B and confirmed the dose of 160 milligrams weekly for the second Phase 3 trial of HS, consistent with the understanding that higher exposures enabled by the high potency and small size of izokibep, are required for greater efficacy in HS.

With the dose confirmed in May, we initiated and dosed the first patient in the second Phase 3 trial in June, and that trial continues to actively enroll. As in other chronic inflammatory conditions, maintaining therapeutic exposures has been demonstrated as critical to maintaining or improving disease control over time. For izokibep, this has been validated in PsA with our Phase 2 positive results at week 16 that continue to deepen out through week 46. We have two registrational studies ongoing in HS, and we look forward to reporting top-line data from the first registrational study soon.

Turning now to our late-stage program in PsA, where we are evaluating izokibep in a Phase 2b/3 clinical trial. Psoriatic arthritis is a chronic inflammatory disease with multiple clinical manifestations including arthritis, psoriasis, spondylitis, vasculitis, and importantly, enthesitis, which is is an inflammation of the strong, dense, poorly vascular tissues that anchor our ligaments and tendons to bone. Enthesitis impacts the majority of moderate to severe PsA patients and has been historically very difficult to treat. It is a marker of disease severity and a source of residual pain and physical dysfunction that impacts the quality of life of patients. There are approximately 1.6 million PsA patients in the U.S., and about 60% of those are considered moderate to severe. Here again, as with HS, more complete and more rapid resolution of the totality of all key manifestations of disease is critical to improving patient quality of life and remains an unmet need.

At EULAR in June of 2022, we presented 16-week placebo-controlled data from our Phase 2 trial in PsA showing that izokibep demonstrated clinically meaningful benefits across disease manifestations, including 52% achieving ACR50 response, a marker of arthritis improvement; 85% achieving PASI75 response; and 88% achieving resolution of enthesitis which, while not head to head, to our knowledge, is a level of resolution that has not previously been reported for any other agent. As in HS, this also validates our hypothesis that the high potency and small size of izokibep could make a difference in difficult-to-treat tissues.

In April of this year, we were excited to report 46 weeks of results from the Phase 2 trial in PsA that showed continued deepening improvements beyond 16 weeks across key manifestations of the disease. All participants receiving izokibep 80 milligrams every other week, 79% achieved ACR50 response versus 52% at week 16. And even higher orders of clinical response, including resolution of disease, were observed with 50% achieving ACR70 response, 71% achieving PASI100 response, and 89% achieving enthesitis resolution. As a rheumatologist, these are exciting results across all manifestations of disease as they are beyond, while not head to head, what we have seen historically with other approved agents, all contributing to even greater improvements in quality of life for PsA patients. Internal modeling has suggested that the magnitude of clinical response would continue to increase with longer duration of treatment, as has been demonstrated. The model also predicted further differentiation may be achieved with increasing dose levels.

Supported by that modeling and as a result of the Phase 2 data at 16 weeks last year, we accelerated the initiation of a Phase 2b/3 trial in psoriatic arthritis, evaluating a range of doses including higher doses than the completed Phase 2 trial. Enrollment in this trial has been completed, accelerating anticipated top-line results into first quarter 2024 from mid-'24. The totality of evidence across these two independent data sets of HS and PsA continues to support the hypothesis that the high potency and small molecular size of izokibep can lead to clinically meaningful differentiated benefits for patients: in HS, HiSCR100 responses in 33% of patients at week 12 and improvements in draining tunnels within the first month of therapy; and in PsA, resolution of important manifestations of disease including joints, skin, and enthesitis, all associated with residual pain and severity of disease impacting quality of life.

We are also planning to initiate a Phase 3 program evaluating izokibep for the treatment of axial spondyloarthritis in 2024. Enthesitis is a central feature of AxSpA, and we believe the rates of enthesitis resolution demonstrated in the Phase 2 psoriatic arthritis trial suggest the potential for clinically meaningful differentiated benefits for patients with this disease as well.

Finally, a Phase 2b/3 clinical trial of izokibep as a treatment for uveitis is enrolling.

Previously reported data for secukinumab delivered intravenously have validated the inhibition of IL-17A as a potential therapeutic approach for uveitis. A clinical dose response was demonstrated with IV levels of secukinumab exposure. However, that response was lost with lower levels of exposure when delivered subcutaneously, leading to discontinuation in the development of secukinumab in uveitis. Based on its high potency and small size, izokibep can achieve secukinumab IV levels of exposure with a single subcutaneous injection. We believe this provides the potential to unlock this mechanism as an approach to treating uveitis where there is only one approved therapy and significant unmet need remains.

And now, let me turn the call over to Paul, who will review our opportunities with our earlier-stage clinical programs, lonigutamab and 517. Paul?

[Paul Peloso, Chief Medical Officer]

Thank you, Shao-Lee, and good afternoon, everyone. As Shao-Lee noted earlier, we've added two promising programs to our portfolio earlier this year and have quickly advanced these product candidates into important clinical studies to accelerate their development in areas of critical unmet need for patients. Lonigutamab is a humanized IgG1 monoclonal antibody against IGF-1R with up to 75-fold higher potency than teprotumumab and is currently under investigation for the treatment of thyroid eye disease, or TED. TED is a potentially vision-threatening, progressive, chronic autoimmune disease in which the eye muscles, eyelids, tear glands, and fatty tissue behind the eye become inflamed and enlarged. It's estimated there are more than 100,000 chronic TED patients in the United States.

Recent studies have demonstrated that the inhibition of IGF-1R is effective in patients with both acute as well as chronic thyroid eye disease. There is currently a single FDA-approved therapy for TED that is administered intravenously and is a fixed six months course. As such, opportunities remain for improved efficacy, safety, and more convenient administration. As a chronic inflammatory illness, a fixed-course dosing regimen is insufficient for some patients, resulting in a lack of complete resolution of disease and potential for disease relapse. Safety considerations, including hearing impairment and hearing loss, also remain a concern for the current standard-of-care with rates of 10% to 45% of hearing impairment in the clinical trials and in real-world experience. Recent updates from the FDA to the warnings and precautions of the teprotumumab label highlight hearing impairment as a serious, potentially permanent side effect. Hearing impairment may be directly related to targeting IGF-1R, or IGF-1 functions to regenerate cells of the inner ear subsequent to auditory insults.

Finally, the need for intravenous infusion complicates care between patients and facilities, which we avoid with patient-administered subcutaneous delivery.

We hypothesized that the characteristics of lonigutamab can optimize efficacy by maintaining minimum drug levels needed to achieve improved depth and durability of response, limit safety liability, including hearing impairment and hearing loss potentially associated with high maximum drug concentrations, and maximize patient convenience through single-injection subcutaneous delivery. While teprotumumab dosing requires three to five doses to achieve optimal minimum drug levels, lonigutamab may achieve these minimal drug levels with the first dose with the potential to better control disease earlier. There is potential for more complete control throughout the disease course with chronic dosing beyond six months facilitated through the potential for at-home subcutaneous injection. Our goal is to treat patients to complete and lasting resolution of signs and symptoms.

Furthermore, we believe that the characteristics of lonigutamab that enable subcutaneous delivery also allow for the reduction of the maximum serum concentrations incurred with current intravenous therapy, as decreasing these maximum concentrations limits the potential for an anti-IGF-1 therapy to cross the blood labyrinth barrier and inhibit the normal function of IGF-1 to regenerate the cells of the inner ear.

Finally, based on published exposure response modeling of teprotumumab and the relative potency of lonigutamab, as well as our completed single ascending-dose trial, lonigutamab achieves targeted exposures when given as a single subcutaneous injection. The Phase 1/2 proof-of-concept trial of lonigutamab delivered subcutaneously in thyroid eye disease patients is ongoing, and we expect to announce top-line results by late 2023, early 2024.

SLRN-517 is a monoclonal antibody targeting c-KIT, the inhibition of which can reduce mast cell proliferation and activity in various allergy and inflammatory diseases. With SLRN-517, we are aiming to address the root cause of mast cell-driven diseases by blocking mast cell proliferation and reducing the degranulation of mast cells, limiting their toxic cellular products from being released into the circulation.

SLRN-517 is a fully human IgG1monoclonal antibody with no agonistic activity, that is no mast cell degranulation, demonstrated high potency against the target across binding and functional assays, and therefore, has the potential for low subcutaneous volume injection. The fully human nature of SLRN-517 should also limit its potential for immunogenicity and, therefore, the potential for acute reactions. Additionally, its high potency and relatively short half-life of approximately 16 days allows for rapid depletion of mast cells while limiting opportunity for the adverse effects of c-KIT inhibition on spermatogenesis, hair color, hematopoietic cells including neutrophils.

In addition to our initial focus in chronic urticaria, SLRN-517 also has the potential to address several other mast cell-driven disorders, including prurigo nodularis, bullous pemphigoid, and eosinophilic esophagitis. The Phase 1/2 proof-of-concept trial of SLRN-517 is ongoing and will include healthy volunteers and chronic urticaria patients. We expect top-line results in the second half of 2024.

With that clinical overview, let me turn the call over to Gil for a review of our financials. Gil?

[Gil Labrucherie, Interim Chief Financial Officer]

Thank you, Paul, for that overview of our earlier-stage clinical programs. And good afternoon, everyone. First of all, I could not be more pleased to reunite with the team in ACELYRIN, a very talented and experienced team that I thoroughly enjoy working with in a business I know well. As you've just heard from Shao-Lee and Paul, it has truly been a transformative year for ACELYRIN, highlighted by meaningful progress across all areas of the organization: clinical, corporate, and financial.

On the financial front, in early May, we were delighted to close the upsized initial public offering which included the full exercise of the underwriters' option at $18 per share, which was at the high end of the pricing range. The IPO generated $621 million in gross proceeds for ACELYRIN.

At June 30th, cash and cash equivalents and short-term marketable securities totaled $823 million, which we expect to fund operations through key value-driving milestones across all three clinical programs. Research and development expenses were $30 million for the second quarter, as compared to $12.7 million for the same period in 2022. Comparing 2023 to 2022, the company has undergone significant growth, including the expansion of the izokibep program across multiple indications and the addition of two programs in 2023, both of which are now in clinical-stage development.

General and administrative expenses were $12.7 million for the second quarter, as compared to $2.2 million for the same period in 2022. This increase in expenses was primarily a result of expanding our organizational capability to support the development and commercialization of our broad portfolio of immunology product candidates.

Finally, our net loss totaled $26 million for the second quarter of 2023, compared to $14.5 million for the second quarter of 2022. As you can see, we continue to invest responsibly and meaningfully in furthering our robust clinical pipeline and building our capabilities. And we're delighted to have a strong financial foundation from which to continue our important work for patients.

And now, I would like to turn it back to Shao-Lee. Shao-Lee?

[Shao-Lee Lin, Founder and Chief Executive Officer]

Thank you, Gil. As you've heard, it's been a tremendous year for ACELYRIN. We've had much to look forward to as we continue to execute on our vision to accelerate the development and commercialization of transformative medicines for patients. Our lead program, izokibep, is a true pipeline and a program with potential across multiple indications representing multi-billion-dollar opportunities in the aggregate. We now have meaningful evidence in the two independent data sets in HS and PsA supporting our hypothesis of high potency and small size of izokibep can lead to clinically meaningful differentiated benefits for patients, including resolution of important manifestations of each disease associated with residual pain, severity of disease, as well as physical dysfunction, all impacting patient quality of life. This evidence also leads us to believe that the potential for izokibep to demonstrate important efficacy in uveitis and AxSpA is quite high.

Both lonigutamab and SLRN-517 continue to progress through early clinical stage trials, and we believe have potential, similar to izokibep, to address significant unmet efficacy, safety, and convenience needs in thyroid eye disease, chronic urticaria, and beyond. These programs are expected to collectively deliver multiple important data readouts through the end of 2024 that include, for the HS Phase 2b/3 trial, which we've previously shared, is expected in Q3 that was accelerated from the end of the year; the PsA Phase 2b/3 trial, which is now expected in Q1, accelerated from mid-2024, both of which were designed to enable the potential to be part of registrational packages for each of these indications.

In addition, we anticipate proof-of-concept data for lonigutamab in thyroid eye disease in late '23, early '24, and for SLRN-517 in chronic urticaria in the second half of 2024. These are ambitious goals, and we feel confident we will achieve them, thanks to our experienced team, the right pipeline, and strong financial foundation to enable our execution. We have created a culture designed to foster a robust innovation at all stages of drug development and one that encourages collaborative teams and harnesses the power of inclusion and diversity to fuel creative solutions. You have seen the results of this incredible culture, and we look forward to continuing to deliver on our promise for patients and for our shareholders.

Finally, before I open the call to your questions, I want to thank all of our patients, investigators, investors, and employees who are partnering with us on this mission to accelerate the development and delivery of transformative new medicines to the patients who need them.

We are now ready to open the call to questions. Thank you.

[Operator]

Thank you. [Operator instructions] Our first question comes from the line of Tyler Van Buren from TD Cowen.

[Tyler Van Buren, TD Cowen]

Hey, guys, good afternoon. Congrats on all the progress. Great to see the new HS data and the PsA pivotal accelerated to Q1. I have a couple for you guys on HS given all the near-term focus -- focuses.

The first one is, for the new draining tunnel HS data from Part A that you disclosed that focuses on improvement in at least one or two draining tunnels, can you help us put that in the context with the MoonLake sonelokimab data recently reported which focuses on change in DT counts or DT100 and/or any data that bimekizumab has presented? And then, the second question is for the upcoming Phase 2b/3 HS data readout, what is the ultimate goal in terms of efficacy? Is it to show a placebo-adjusted HiSCR75 rate that is equivalent or better than what bime and SLK put up in Phase 2? Or on top of this, is it also to demonstrate HiSCR100 responses in a meaningful percentage of patients? Thanks.

[Shao-Lee Lin, Founder and Chief Executive Officer]

Thanks for those questions, Tyler. Really appreciate it and great to be here today with everybody. So, in terms of the draining tunnel counts, we're super excited to be able to share that with you today. I think the most important new development there is, to our knowledge, this is the first report of improvement in draining tunnels as early as one month into treatment sort of across the therapeutics, to our understanding.

You asked for sort of comparison relative to what's sonelokimab Phase 2 showed recently, as well as bimekizumab data. To our knowledge, I don't think bimekizumab has shared any change in draining tunnel data to date. From a sonelokimab perspective, I'd say it's been a little bit more difficult to tease out. There's a high placebo response within the context of that data set in the middle -- in the mid-20s, I think. So a little bit tougher to make a clear comparison.

I think what we would like to highlight within the context of what we've seen and why we're so excited is, again, as early as a month in any patient, so that's I think we've reported now 20 -- or sorry, two-thirds of patients, by week four with one draining tunnel, I'll add that it's on the order of a third of patients, with two draining tunnels as early as a month, and then going up to 50% of those patients by week eight, and then that number continuing out to week 12.

So, we're very excited about these in terms of the consistency from week to week, in terms of the speed, the magnitude improving over time as well. And we think that the reason that we're seeing this happen as early as we are is because of the -- frankly, the achievement in terms of HiSCR or abscess and nodule 100 counts, which is what HiSCR is defined as, without any new draining tunnels. And think it really requires this level of active control over the abscesses and nodules and resolution of that inflammation that is allowing us to see this kind of early response in that difficult-to-treat tissue.

So, I think your second question, Tyler, was around what our expectations or how we would guide folks to think about the upcoming Part B randomized control to Phase 2b/3 data. Appreciate that question. Our goals are actually no different at this juncture than when we started out asking ourselves whether or not the high potency and small size of izokibep could make a difference -- a meaningful -- meaningfully differentiated difference in this disease state that really requires, inherently to the disease itself, a great deal more exposure, and has such difficult-to-penetrate tissues.

We saw in our open-label Part A experience that we were reaching, and I'll confess, what even surprised us, at the time, HiSCR100 levels of response in as many as a third of patients as early as week12, granted that was a small data set and exactly what that point estimate ends up being within the context of the larger Part B is to be determined. But from our perspective, and especially given now that we have two data sets that are suggesting the ability to approach the potential for resolution of disease, we're laser-like focused on that concept in that this molecule has the potential to really bring us to something that may be more paradigm-shifting for patients across these indications. So, we've always talked about being at least as good as, if not better than, whatever we consider the best agent out there to be without any new safety liabilities. We think that we've been consistent with that to date. We are going to hold ourselves to that same standard moving forward, and we think that all eyes really on the potential to continue to talk about resolution of disease for patients.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

[UnidentifiedAnalyst]

Hi, this is [John Gou] on for Yas at Piper. Thank you for taking our questions. Given that enrollment completion Part B was announced on May 1st, investors are wondering if you could provide any color on timing of top line and whether it could be in the first half or second half of September.

Second, congrats on the PsA data coming out in 1Q '24. Could you help us understand how this data set will provide read-through into uveitis and axial spondyloarthritis studies? And last, what do you hope to see in Phase 1 for SLRN-517 to move forward into Phase 2B and make differentiation clear? Thank you so much.

[Shao-Lee Lin, Founder and Chief Executive Officer]

Okay, that was a lot. Let me take them piece by piece. I might ask Paul to help me with 517 on the end, and I'll take certainly the guidance with regards to the HS Phase 2b/3 study that we accelerated from Q4 or end of year into Q3, that still sits firmly within Q3 and is probably the extent of the guidance that I'd like to provide at this time.

With regards to the PsA data now having completed enrollment in the 2b/3 study, also being accelerated and that primary endpoint top-line readout will now be in first quarter of '24 instead of mid-'24. Obviously very, very excited about that as well. We've talked about both the Phase 2 primary endpoint data that read out last year as well as the 46-week data that we shared earlier this year with outsized benefits and even the concept of resolution within the context of that disease state as well.

And so we think your specific question was around the read-through to additional indications, AxSpA, uveitis, potentially even others. We'll say that we're excited about the read-through. We talked about the totality of evidence across HS and PsA really enabling us to talk about the concept of a potential for resolution of disease. We -- and so, we think that there's read-through there with regards to what this means from a technology and platform perspective. For AxSpA in particular, enthesitis is tremendously central to that disease, perhaps even more central, in a lot of ways, than it is in PsA.

Axial spondyloarthritis, as the name suggests, is all about inflammation of the spine. There are ligaments up and down the front and back of our spines that are connected at every single vertebral level or spinal level by enthesites, by tiny little bits of tissue that connect -- their whole job is to connect our ligaments and tendons to bone. They're incredibly strong and poorly vascular. And when they get inflamed, it's really tough to resolve that inflammation. And what we're seeing within the context of our Phase 2 PsA data set, we think is the first time that we've been able to have this kind of magnitude of resolution of that manifestation of disease that is associated with residual pain, severity of disease, poor physical function, and therefore, of course, impacting quality of life.

Given that, and again, we're talking about resolution of enthesitis on the order of 80%, 90% at this juncture, where historically, it's been -- it has not even approached that. We think that the implications for AxSpA, given the neutrality of enthesitis to AxSpA is going to be very, very important, and we're going to be excited to advance that program as well. And then, as we said, for uveitis, another difficult-to-penetrate tissue, the back of the eye, already de-risked with regards to secukinumab having shown dose response and efficacy there with very high exposures from an IV perspective, losing that response when it went down to subcu levels of exposure and therefore discontinuing that program. We think that this high potency and small size of izokibep delivered in a single subcu injection is going to enable us to unlock this mechanism for uveitis patients. And so, obviously, a lot more to come there.

[Shao-Lee Lin, Founder and Chief Executive Officer]

Yes. Paul is going to cover the 517.

[Paul Peloso, Chief Medical Officer]

Yes, I believe the question was related to what we expect to see in the proof-of-concept studies. We have launched single ascending dose studies already. And we do know that, for this mechanism, we have a great biomarker in terms of tryptase, and also that the tryptase levels in healthy go down in a way that's very similar to the tryptase levels in patients with chronic spontaneous urticaria. So, we'll start in healthy, and we'll move on to chronic spontaneous urticaria. And our belief is, given the greater potency, that we will be able to achieve meaningful suppression of tryptase and, therefore, meaningful suppression of disease activity measured by itch and urticaria in a low-volume subcutaneous injection. And that's ongoing.

We're exactly where we expect to be, and we'll look forward to seeing those tryptase responses across a variety of doses.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Akash Tewari from Jefferies.

[Akash Tewari, Jefferies]

Hey, thanks so much. So, just want to go into the HiSCR75 at 16 weeks. So, I think [Technical Difficulty].

[Shao-Lee Lin, Founder and Chief Executive Officer]

Sorry, we were having trouble hearing you, Akash.

[Akash Tewari, Jefferies]

Can you hear me now?

[Shao-Lee Lin, Founder and Chief Executive Officer]

Now I can, yes, but HiSCR75 and nothing after that.

[Akash Tewari, Jefferies]

Okay, sorry about that. So, just in terms of the bar for HiSCR75 at week 16, I think, previously when we've spoken about some of the MoonLake data, the bar -- the data that they showed in HS seems to be kind of doable but not a bar that either -- they couldn't actually hit. If they showed about 28% at week 16, and we know that from week 12 to 16, there's about a 2% to 4% benefit just with longer duration, would it be fair to say that your expectation for your drug at week 16 on HiSCR75 is between 30% to 35%? And kind of circling back on a question that came up earlier, do you feel like HiSCR75 would be somewhere where your drug could differentiate versus the MoonLake compound or the UCB compound? Or will that really be HiSCR100 that we should be thinking about?

And then, just maybe finally on -- you mentioned that your DSMB allowed you to move forward with your weekly subcu dose, and it looked at both safety and efficacy consistent with the idea that higher exposure is a better -- is something that you want to pursue. Can you give a little more color on what your kind of protocol looked at to recommend that weekly dose, specifically on ISRs, dropouts, and then efficacy for both your biweekly and weekly dose? Thanks so much.

[Shao-Lee Lin, Founder and Chief Executive Officer]

That was a mouthful, Akash. Thank you. So, let me take this bit by bit. So, with regards to HiSCR75 as the bar our data from our open-label study had a high -- HiSCR75 estimate of 57%.

That was obviously a small in open-label experience. Our understanding of kind of historical placebo response rates for HiSCR75 are in the range of 10% to 15% or thereabouts. So, it's pretty straightforward math. Think that could we be within the range that you've described. The short answer is yes.

Is that our goal? I would say, I'd describe the goal the same way I described it earlier, which is that our mission as a company is about making transformative, meaningful -- transformative, meaningfully different medicines. And so, could one continue to differentiate on HiSCR75, I think that was part of your question. I think the answer to that is yes. If we're still in the 50%, 60% range, could we demand to have higher orders of response there? I think the answer is yes.

To your question about what we're looking for, though, again, A, at least as good as if not better than the best agents out there for a given disease state, I'll even broaden that beyond HS; and then, also, in the specific case of HS and given the specific molecules that are out there, without any additional safety liability relative to that. So, that's our goal. That said, with regards to the data that we have seen and have been pleasantly surprised by, pleased with, in terms of the HiSCR90 and even 100 response rates and now draining tunnels happening, improving as early as week four, I would say that, again, we're -- we hope that we're moving the expectations for what we can offer patients within the context of HS treatments. And fundamentally, that's what we're going to be focused on evaluating.

And then, I think your last -- the last part of your question was about our DMC. We had a pre-planned, independent -- our independent data monitoring committee to look at our Part B data at an interim look and confirm for us whether or not our expectation of the highest exposure, 160 milligrams every week, was a reasonable dose to continue to move forward with in our planned second confirmatory HS study. Their remit was really to tell us whether or not they felt that there was any safety reason we shouldn't do that or whether or not there was any efficacy reason we should not do that. And they confirmed for us that neither of those were true. In fact, that we could and, from their perspective, should move forward with that dose level. And that's why the second study kicked off the way they did.

Hopefully, that covers your questions. Thank you.

[Akash Tewari, Jefferies]

Really helpful, and thanks so much for bearing with me. It's the first earnings call, so you got a little excited. Thanks.

[Shao-Lee Lin, Founder and Chief Executive Officer]

Sure, Akash. Take care.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Vikram Purohit from Morgan Stanley.

[Vikram Purohit, Morgan Stanley]

Hi, good afternoon. Thanks for taking our questions. So, two from our side, one follow-up on the Part B we had expected in 3Q and then one broader commercial question. So, first question is, what sort of mechanistic read-through do you think is fair for people to draw from the Part B data in HS to other indications and development for izokibep, like PsA? And then, secondly, on commercial, what do you see as the overall addressable patient population in HS for all biologic therapies? And then, looking forward a few years, how do you see potentially multiple IL-17-targeting agents fitting into the treatment paradigm? And what do you think is going to drive preferential use of one IL-17 versus another? Thanks.

[Shao-Lee Lin, Founder and Chief Executive Officer]

All right. So, thanks very much for that, Vikram. So, let's see. The first question was about if Part B is positive, what's the read-through in the PsA and potentially other indications, if I heard that right.

And I think that I'll reiterate that, from our perspective, positive looks like clinically meaningfully differentiated efficacy without any additional safety liability. We think that that would be an extremely exciting place. We think that we have positive PsA Phase 2 data already. So, that's just additional confirmation, if you will, about the totality of evidence of the high potency and small size of izokibep being able to have a differentiated offering within the context of these disease states. And I think that the potential read-through to other indications, we've talked about AxSpA already.

I think there's some -- frankly that it brings about the potential paradigm shift to think about the fact that small therapeutics can penetrate these difficult-to-treat tissues better and that the high potency may allow them, once they get in, to sort of do their business in a more effective way as well. And so, from our perspective, that's very exciting, not just for izokibep and its indications, but potentially for how we might think about applying that concept more broadly within the context of drug development as well. With regard to the addressable patient population in HS and kind of the evolution, I guess I'll summarize to say the evolution of the treatment paradigm and how physicians and patients might choose together moving forward. The overall population, I think as we mentioned in our prepared remarks, is on the order of 370,000 patients in the U.S. About half of those are moderate to severe. What we know from a commercial total addressable market size perspective is that, currently, that's on the order of 1-plus billion, maybe 2 billion, estimated to grow to between 4 billion and 5 billion within the context of now and 2030.

So, really a growing market size. As we know, with many areas or disease areas where we gain better and better treatments where we gain an initial even awesome treatment to begin with, that there are more patients that are out there than we previously predict because we haven't had the medicines before to appropriately have the reason to identify them and, therefore, have the opportunity to treat them. What we're seeing within the context of the HS field is incredibly exciting in that we're moving both the higher orders of response. Whether we're talking about HiSCR75 or HiSCR90s and hundreds I think across the agents that we see in development currently, we're all moving to higher orders of response, which is fantastic for patients and is the kind of shift that we've seen in psoriasis in the past, for instance, where we can now talk about sort of all clear skin instead of 50% improvements or 75 improvements in terms of clearance of your skin lesions we hope to get there for, and we believe that's what we're seeing for hidradenitis suppurativa as well. And in addition, we're not only talking about that, but we're talking about the ability to improve even on those responses, those 12- to 16-week responses, up through a year of treatment. And we've seen that with a couple of other data sets out there now with secukinumab and bimekizumab.

Both have demonstrated that continued improvement over time. Given the continued improvement over time that we've seen with izokibep in our PsA Phase 2 data sets and even in an outsized way relative to other molecules like secukinumab that have been approved for PsA, we think that the likelihood of seeing that for izokibep in HS is also very real. And so, we're terribly excited for patients overall and where we're all together moving the practice of medicine in this disease state.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

[Unidentified Analyst]

Hi. Thank you for taking our question. Another one on, given the DMC decision on the 160-milligram weekly in the HS study was more effective, are we supposed to infer that this weekly dose is going to be moving forward over the two weeks? Or could you provide a little bit more color on that as well?

[Shao-Lee Lin, Founder and Chief Executive Officer]

Yeah. No, thanks for that, and sorry if I wasn't clear earlier. Yes, so the choice was made to pick a single dose moving forward into the second confirmatory HS Phase 3 study. And that dose is 160 milligrams weekly, which is the dose we anticipated based on our understanding of the disease state and why we set up the DMC to help us with that evaluation at the time.

We set up the first study as two dose levels versus placebo because one does need to demonstrate that you are utilizing a minimally effective dose and not potentially overdosing, for instance, patients for no reason when you have -- within the context of our registration packages. And so, that was the purpose also of ensuring that that's what we were doing for patients.

[Operator]

Thank you. At this time, I would now like to turn the conference back over to Dr. Kim for closing remarks.

[Shao-Lee Lin, Founder and Chief Executive Officer]

Thanks, Gigi. It's Dr. Lin. Thank you, everybody, for your engagement and questions today. Really appreciate our very first earnings call. Take care.

[Operator]

This concludes today’s conference call. Thank you for participating. You may now disconnect.