All right. Okay, awesome. Good morning, everybody. Thanks for coming. Welcome to the 46th Annual Healthcare Conference. It's great to see everybody. We got a packed line-up the next 3 days. I know we're just buckling in here. It is my distinct pleasure to be joined on stage today by a couple titans of the AI industry these days. To my left is the CEO of Absci, Sean McClain. To his left is the CFO and CBO of Absci, Zach Johnson. Thank you guys for joining.
Yeah, thank you.
Awesome. There's no shortage of things to unpack here today, so we're just gonna dive right in, right? We do wanna try to keep it as interactive as possible, so if you guys have any questions or anything, feel free to go ahead and flag me, or you can send me an email, brendan.smith@tdcowen.com. I'll gonna be checking my phone throughout. Maybe, maybe, Sean, let's just before we go into the individual programs and kind of the outlook for the year, let's just start high level with where Absci's platform is today. Maybe what do you kind of see March 2026 as really the primary points of differentiation for how you all are leveraging AI for what you do?
Yeah. First off, we are a clinical stage AI drug discovery company. We've been at this for a little bit of time now, and it is exciting to start to go into this new era. I think we see new models being developed day in and day out. You know, what really matters at the end of the day is the assets that you have in the clinic and what those readouts are ultimately going to be. I think one of the things that we're really excited about now, especially on the early drug discovery side, is actually the agentic AI.
I think what we've been able to see on the de novo side is being able to rapidly use our de novo model to design, you know, drugs to what we call zero prior epitopes or epitopes that haven't been drugged before. We can do this, you know, very rapidly going after hard to drug targets. What really does matter is getting the target right. It doesn't matter how well you design a drug to a particular target. If you don't get that target right, it doesn't really matter. What we're seeing with a lot of the new agentic AIs is being able to integrate that into the early stage workflow.
I think within the next, you know, call it a year and a half to 2 years, I think you're gonna start to see these workflows where you're able to have AI actually pick really exciting new novel targets for you, pick the epitope, and then have the model design the antibody towards that, and then design the killer experiment to actually validate that particular, you know, pathway and target for you. Just be able to, you know, in a very autonomous manner, be able to rapidly validate new novel mechanisms and targets. It's this really exciting new frontier. It's like developing frontier models, you know, within biology, being able to leverage the agentic AI.
I think that that's gonna allow, you to rapidly, scale. I mean, the way we're seeing it's completely, transformational, and, it's a really, really exciting time that we're in right now.
I think when we talk about value creation for, you know, just from the Absci angle, right? Because I think a lot of these AI drug discovery players in the space are still, in some respects, figuring out what's the best way to drive long-term value creation, right? Whether that's be an engine for the sector, build out their own internal pipeline, some mix of both software licenses anywhere in between there, right? When it comes to the pipeline, what is Absci's kind of North Star when it comes to long-term value creation strategy? Do you see kind of a fully mature company largely coming from internally developed drugs that's driving pipeline? Is it a mix of platform itself with external partnerships? Where does it kind of stand March 2026?
Yeah. At the end of the day, the value is in the asset itself. That's where you're gonna get the long-term sustainable value creation. The platform is absolutely critical to being able to drive that value creation. I think, if you look at, you know, where everything is headed, actually, to give an anecdote, there's a new AI scientist paper that came out and actually Zach, and he can give you the details on it, you know, used some of the agentic AI and was able to rebuild it in 20 minutes. I mean, that's, you know, truly incredible in just, you know, how rapidly you were able to reconstruct a model.
Now, if, you know, everyone has the capability of doing that, and new models are constantly coming out, I think it's hard in this industry to have a SaaS business model or a business model that's solely focused on selling your platform as a service. I think that's where really being able to make sure that you get the right, you know, targets selected. I think prolactin receptor is a perfect example of that. I think some of the earlier stage, you know, autoimmune and I&I pipeline we're building out really is able to show that.
It's about how quickly can you know, get to those, new exciting targets with AI and how can you use AI to unlock, some of these, you know, differentiated, biology that's out there.
Maybe that's kind of a perfect segue into 201, right? Let's, let's kind of unpack this a little bit. Maybe let's start with where you guys see what's primary value case. This is ABS-201. This is prolactin receptor antibody within androgenic alopecia. Maybe how big is this market, and where do you really see the unmet need that this particular asset could address?
I'm very excited about prolactin receptor in many indications, but, you know, you know, squarely in hair regrowth or androgenic alopecia. I think you're seeing this exciting trend, you know, shift towards out-of-pocket, you see it with the GLP-1s, shifting towards preventative care, and this falls, you know, squarely in that category. I think last year, you know, more than half of Lilly's new customers that were brought on were from LillyDirect, you know, out-of-pocket. You know, what we're seeing is the consumer wants this total vitality.
They want their weight, they want their hair, they want their wrinkles removed, and the demand is, you know, very high for being able to regrow your hair, and there currently aren't mechanisms that fully allow you to get that hair back. What we show prolactin receptor, it's this master regulatory switch for hair regrowth. As you age, the more stress you have, the faster your hair grays and falls out or I should say miniaturizes.
What we've been able to show in ex vivo samples with a world-renowned hair expert, Professor Ralf Paus, was that you're able to regrow the stem cells within that niche, which enables you to regrow the hair or reminiaturize or reverse the miniaturization. We think that this is a really new kind of exciting frontier, and it truly is actually regenerative. Post therapy, what we saw in stump-tailed macaques was the ability to regrow hair up to 4 years post-treatment. So we think that this could be a durable treatment that's able to give, you know, potentially superior efficacy. So yeah, it's a really exciting opportunity.
I'm gonna add something to that too.
Please.
If you zoom out a little bit, the ROI on this program is phenomenal, right? We just went through an LRP with our board, and it's really three things that make this exceptional versus, I think, any other type of indication you might look at. One is the market opportunity is huge. Sean mentioned this would be a brand-new category of therapy. In our market research, it suggests this is something patients are gonna love, they're gonna seek to adopt, and they're gonna be willing to pay a premium for. We think the TAM in the U.S. alone could be north of $25 billion. The market's there, it's massive. If you look into the cost of development, point number two, it's really de minimis compared to typical therapeutic indications. We believe we can do the registrational studies for under $100 million.
That would be unheard of for IBD or oncology. Very inexpensive development for a large market. The third part of this is speed. These trials, we're recruiting a trial now, we're gonna recruit over about 230 patients in this trial. When we get to the registrational studies, those are gonna go extremely quickly, we believe as well. The KOLs tell us they'll be wait-listed to get in the trials, and we think we could be in line for an approval circa 2030. Very rapid, efficient development path for a massive indication.
You're talking about, you know, $25 billion TAM or so. I think I've seen the number thrown out, maybe 80, 90 million patients or something like that, addressable in the U.S. alone. I guess, can you give us a sense what proportion of patients are seeking treatment today? I guess, are you envisioning that ABS-201 would capture a lot of the folks who are already coming in for this kind of treatment, expand the proportion or pool of folks who would consider something like that or both?
Both. We saw that in... We've done KOL studies, we've done interviews with patients, then we commissioned a consumer research survey, 610 patients. What we saw is there are a lot of patients who just stay on the sidelines. They don't wanna use standard of care, or they've tried it and they don't like it. They don't wanna be on minoxidil for the rest of their life, taking it every day. Then we also saw patients that are currently on therapy, whether it's minoxidil or they're going in office, their interest level was even higher than the average patient. We think this is gonna be used. It's gonna expand the market. It's also gonna bring in a lot of patients that are currently using standard of care.
We actually don't think this is competitive with a lot of standard of care therapies like minoxidil. We think patients are probably gonna use them in combination.
Okay. When you're talking about the patients who are on minoxidil, who have tried it somewhere around there, who for whatever reason want something else or are no longer testing it out, I guess, what is it about the data you've seen with 201 so far that gives you confidence that it's at least as good efficacy? If it's a safety or tolerability issue for a lot of those patients, what is it about either the mechanism here or the drug itself that's giving you confidence that you can kind of overcome that?
Well, if you look at the stump-tailed macaque, I think that that's, you know, case in point. You're able to, in 6 months, you were able to get full hair regrowth. They were able to go from their gray-colored hair to their jet black hair, and they were able to have durability for 4-plus years after treatment. What really got us excited was the work that we did with Professor Paus, and this for us was very much a de-risking experiment. We were able to take ex vivo samples of the scalp biopsies and were able to run an experiment to see how ABS-201 performed on those scalp biopsies. It was incredible. Within 6 days, we were able to actually see stem cell growth.
We saw upregulation of the key growth factors, TGF-beta decrease, which is a known catagen driver. We were able to actually see hair regrowth as well in those. We saw that prolactin, when you added it, was a catagen driver and, you know, took hair growth in the opposite direction. Within six days, we saw really remarkable results from human ex vivo samples. That for us like really bridged that gap of like, you know, will this work in humans? We believe absolutely. I think the question is can you hit the receptor hard enough? On the stump-tailed macaques, it was, you know, greater than 90% receptor occupancy.
We believe, you know, based on the data we've seen now, if we can achieve greater than 90%, we should be able to achieve, you know, at or above that 30%-40%, or 30-40 hairs per square centimeter, that minoxidil achieves, but potentially even much higher than that 'cause the stump-tailed macaques were at like, you know, 80-90, or, yeah, 80-100 hairs per square centimeter. We feel very confident going into this, and I think we're gonna have some, you know, very differentiated, you know, TPP coming out of this, phase 2A study.
Excuse me. Maybe before we get into expectations for the data itself, I wanna ask just so we can level set how the study is being run, the idea about IV, SubQ, different kind of treatment regimens that you're testing, and what's kind of the proposed timeline for testing a couple of those dosing regimens?
Yeah, I can comment. Right now the SAD's ongoing. There'll be 4 cohorts tested in the SAD. That's all IV for maximum exposure. That gives us some really good data for PK modeling. We'll roll into a MAD study, and we're gonna test 3 doses there. Everything is randomized, placebo-controlled. In the MAD study, patients will see 4 doses, one dose every 8 weeks. We'll be able to have a 13-week interim readout in the second half, and then early next year we'll have the 26-week final readout. Those readouts we're really looking at target area hair growth, as well as some secondaries around the thickness of the hair and the pigmentation, and we'll also, of course, do global photography.
Yeah. I'll also mention too, we have dosed the third cohort. Everything is looking good so far and on track to dose that fourth cohort here very shortly.
Just sorry, the fourth cohort is.
In the SAD.
Yeah. Okay.
Yeah.
All right. Ideally coming out of this combined kind of phase 1 to, you have a proposed dosing. I guess what is kind of the target dose interval you think? Obviously it's early days, you know, we'll have to kinda see how the early data looks. Is this like a monthly, bi-monthly SubQ injection once it hits the market? Is that kind of the plan at this point?
We'll be able to answer that more fully once we get the PK data. As you know, we've introduced half-life extension mutations into the molecule, so we're expecting potentially a dose every 2 months, and that would give you, when you do that 3 doses over 6 months, that would give you that 6 months of exposure, really targeting greater than 90% receptor occupancy, like what was seen in that NHP study, and we think that can deliver durable hair regrowth. That would be the new category of therapy that I think patients are very interested in.
Yeah. Again, it'd be 3 doses and potentially then, you know, durability for 2 to 3 years. We think that that's, you know, extremely convenient for patients.
When we fully concede we're getting a little ahead of ourselves, when we think about a pivotal study then, would you expect to need to follow them for that long? Would you have like a primary endpoint, what, six months or so out, and then, you know, follow them as a secondary, tertiary or beyond there and then add that into the label once you have it?
We are gonna be following these patients a year afterwards. There is a important note on this. We likely won't be seeking the durability on the label itself, but this would be, you know, something that, you know, would come, you know, post-approval. We are looking at at least durability a year afterwards and even in this ongoing study right now.
Help us in levels. I know like you touched on this, next, let's say 18, 24 months now, as we, you know, you hit the data points, readouts, timing as expected, when should we potentially expect a pivotal study be able to start, and how long do you think it could potentially take to enroll?
Yeah. We haven't given guidance on when we'd start the registrational studies, but as I mentioned, we think that it'll be a very efficient
Registrational study process, we think it'll be easy and quick to recruit. We would plan to do it in the U.S. as well as Europe. I think, according to the current plans that we have, and we're refining those, we think we could be in line for an approval around 2030 based on that plan. We'll give more details later in the year.
Okay. All right. Maybe zooming out just a little bit, still on 201, but can you elaborate a little bit more on biological rationale, and any potential expected read-through from the AGA phase 1 POC data to the planned expansion into endometriosis, and what's kind of the biological rationale between those two?
Prolactin receptor is actually a pretty incredible receptor. I think a lot of times it is associated with, you know, reproduction, hence the name, pro lactation. If you look at it, and there's, you know, 20 to 30 years of literature out there, you see prolactin receptor expressed throughout the body. What you see it associated with a lot and, you know, we have mechanistic data even on hair, is that it's on this stress axis, and it's mediated and upre-regulated during stress. Hence, you know, why the more stress you get, the more, you know, graying you get, the more, you know, miniaturization you see.
We're also seeing, you know, data as well in other autoimmune diseases where it is upregulated. It does seem to play a role in autoimmunity. In particular for endometriosis, what we're seeing is that increase in prolactin drives lesion formation and then also drives the pain sensitization as well. We see that in preclinical models, and there's a lot of literature on the sensitization. We think that by blocking the prolactin receptor, you're going to decrease the overall pain that women experience during menses. We already see proof of concept from the HOPE study on this.
We're really excited about going into endometriosis, but there's also a lot, I think, other adjacent indications as well. I will note, I think one of the reasons why, you know, prolactin has been overlooked as well is that we look at it from a pituitary standpoint. It's, you know, expressed, you know, systemically through the pituitary. But there's also extra-pituitary expression in the periphery. That is driven off of different transcriptional regulators. Like dopamine that normally controls prolactin doesn't control the peripheral expression in the tissue. I think it has been overlooked, you know, quite a bit at least within the industry.
I think that there's exciting new biology even outside of AGA and endometriosis.
Presumably, you get good safety exposure reliability data from the phase 1 and can go directly into a phase 2 with an endometriosis, right?
Yep.
Okay. Do we have a sense of what's kind of the timeline then for endometriosis relative to AGA?
Yeah. I mean, we're planning to start an endometriosis phase 2 study Q4 this year.
Yeah. All right. I know we touched on this a little bit earlier just about kind of the consumerization of a lot of this part of the healthcare market, right? Can you speak a little bit to how you're watching a lot of, let's say, the GLP-1 conversation unfold, right?
Sure.
How this is kind of guiding your approach, maybe less so on the clinical development side, but really from a commercial standpoint, like, what are you looking to and how a lot of these aesthetics markets are launching and kind of evolving commercially, how, excuse me, 201 could realistically fit into that kind of model? You know, if it does work by 2030, let's just say what that kind of launch trajectory would ultimately look like.
Yeah. I think, you know, first it's making sure that the derms are on board with this. I think our you know, original, you know, launch plan would be, you know, going through the derms. Ultimately, long term, we see this DTC. That's what you see with the GLP-1s. I think a lot of this is gonna be driven by, you know, social media influencers. It's gonna be a very, very different type of launch than a lot of other drugs. You do see, I think, other pharmas starting to go into this, you know, preventative care, this kind of like total vitality market. It is massive.
I think one of the great things about a consumer-facing brand is that you can actually build a brand reputation. I think the pharma industry has always, you know, lived and died off of LOEs and constantly having to refill the pipeline. Botox is a perfect example where they lost exclusivity, and they were able to continue to maintain market share because of that brand. I think that that's a similar thing that you can see here with ABS-201, but with the GLP-1s. I think that that's I think a really important kinda new direction is, like, building brand to really be able to sustain long-term value. Just one other quick point too. It's not just aesthetics, right?
We saw this in our patient interviews and in the survey. Patients have significant psychologica
effects from hair loss. We're actually meeting with some Harvard professors tomorrow who've been looking into this topic as well. We see a lot of, like, consternation from patients. They feel like they don't wanna be in social environments. They feel unattractive. They feel older. There's a lot of psychological components that go into this that are beyond what I think you traditionally think of as aesthetics.
Okay. All right. I know we're kind of buzzing through this time, so I wanted to give a few minutes on kind of the deeper pipeline and strategy around this as well. Maybe just quickly on 101 TL1A, where is this program kind of stand now? What's the, what's the plan for kind of data disclosure and potential partnership conversations? Where are they at?
We're completing the phase I study now. That'll take us another roughly quarter to do, and we're actively engaged with potential partners. What we're most excited about is the prospect of finding a partner to work on a novel indication, an indication that no one else has explored TL1A in. We hope to announce something about that later this year. That's only something we would do with a partner. We're devoting our resources, our capital towards advancing ABS-201.
Okay. Yeah. When we look beyond 101 and 201 into the deeper pipeline now, what's kind of the proposed timing strategy for some of these assets, and how does this kind of fit into your, you know, retain internally versus partner versus, you know, completely sell altogether? Like, where does the rest of the pipeline kind of fall on that strategy?
Yeah. We take it case by case. I think some of the bigger indications that would obviously take more capital to do, we are looking to out-license those earlier. I would say that the focus has really been on I&I autoimmune and really looking towards more kind of this preventative, you know, care angle and what could potentially fit in with, you know, an out-of-pocket, you know, an out-of-pocket strategy. I would say it is, you know, becoming, I think, quite a robust pipeline, and I think we have some interesting bispecifics that are coming out of it. I think things that will synergize with the prolactin receptor and some of some other interesting targets as well.
I'd say it's, definitely, coming together really well, and, quite robust. We've already been, you know, chatting with pharma about some of these that we think, would be, best for pharma to take on.
Okay. Conceding the case-by-case approach, I guess, you know, in an ideal situation, fully mature company, what's kind of your ideal stage of development that you would partner off some of these assets? If you know kind of even pre-clinically this isn't something we, for whatever reason, don't wanna really carry to the market ourselves, is the goal to maybe, you know, before you even enter a phase I, find a potential partner, run a phase I, and then see who is interested? What's kind of the ideal cadence of this now?
Maybe just to back up, one of the things that to me is really exciting is the platform is getting more and more efficient. You asked what our North Star was earlier. The North Star is creating assets. That's where all the value is. When we look at leveraging our platform, there's only so many things we can take forward into late-stage clinical development, and we're squarely focused on 201. There's a pipeline and a drug right there. We think those opportunities are enormous. The platform itself is generating lots of assets. Sean mentioned we have a bunch of things we'll probably announce later this year, bispecifics, some really challenging targets. We think that's a great way to help fund what we're doing in development, so we'll look to partner some of those quite early.
We think we could partner some of those at the DC phase. We've already had discussions with pharma about a couple of those assets we're bringing along. We think as we go forward, and Tim, you asked where do you see us in four or five years earlier in the conversation, I think you'll see us developing select programs later in development where the ROI makes sense for a company of our size. AGA is a great example. That ROI is enormous. We have to take that on. We will take that on. You'll see us develop other really exciting programs where we can out-license them earlier in development and take that capital, recycle it into our development and into the platform.
Yeah. I mean, you both mentioned the conversations with pharma now. I know this is something that we'll speak to quite a bit over the next few days, pay attention to all the AI panels throughout the week. You know, maybe in your more recent conversations now, we've seen pharma putting a lot of money into their own internal AI investments, right? Frankly, for years, I think especially the last couple of years in particular. I guess in your recent conversations, like where is pharma's heads at in terms of what they're interested in spending money through external partnerships and, you know, exfield licenses, things like that, versus what they are looking to kind of build out internally?
How do we think about all the money that we're seeing pour into their own internal capabilities and what that ultimately means for a lot of more standalone companies that are exclusively focused on them?
I think that what we're seeing is them continue to invest in internal, development. I think they're even switching towards SaaS models. You know, it's, it's great for them 'cause they can, you know, spend X amount of capital and not have to, you know, worry about, you know, any sort of, you know, downstream, you know, milestones and royalties. I think you're gonna continue to see this. You know, we don't want to play in that space. We wanna continue to leverage, you know, AI and partner on the asset side.
Yes, we are seeing, you know, more and more pharma wanting to build this out internally and, you know, wanting to work with, you know, companies that will enable them to do that, you know, whether that's, you know, through, you know, a SaaS or a fee for service type of arrangement.
Maybe just in the last 30 seconds here, I know we've kind of covered a lot from kind of high-level strategy through individual pipeline assets, but from where you guys are standing right now, what do you feel is kind of the most, you know, palpable point of disconnect between what you see as the primary value drivers for the company and maybe where a lot of the Street's head is at when they try to look at you guys?
I think the Street's head is in the right direction. I think ABS-201 I think is 80% of the conversation that we are having. You know, we're extremely excited about that. We see this as, you know, a potential game changer for the company. But one piece that I will say that I'm seeing, you know, completely transform, you know, not only Absci but this industry over the last, you know, 6 months is truly the agentic AI. See that really being able to, you know, scale, you know, each and every one of us like 10x. And I think you're gonna get you know, much more efficiency. You know.
You top that with the AI models that we've already had. You start to see how things can start to be fully autonomous, how you can start to just rapidly, you know, go after, you know, various different targets with ease. It's a very exciting new frontier. A year ago, I would have never thought we would be where we are now, and I think it kind of changes the paradigm of how we're, you know, how this industry is going to ultimately move forward. It's going to allow exciting drugs to get to patients faster than ever before.
I can't resist putting you in the hot seat for a minute. I think the biggest disconnect I see today is valuing the 201 program into the stock. Not you specifically, but we've had analysts build their models, and they've told us, "We don't know how to release this because the stock price we get to is so far away from where you're trading today." When I look at that disconnection, I think we're gonna close that gap over the next 6 months easily, and that's what's really exciting.
All right. On that note, it's a pleasure to see you guys always. Thank you for joining us, and thank you all for listening today. Got more to come.
Thank you.
Thank you