Nektar Therapeutics Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2024

There are 11 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Nektar Therapeutics Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to your speaker today, Vivian Wu. Please go ahead.

Speaker 1

Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. With us on the call are Howard Robin, our President and Chief Executive Officer Doctor. Jonathan Zilevsky, our Chief Research and Development Officer Doctor. Mary Tagliaferri, our Chief Medical Officer and Sandra Gardner, our Chief Financial Officer.

Speaker 1

On today's call, we expect to make forward looking statements regarding our business, including statements regarding the therapeutic potential of and future development plans for drug candidates and research programs. The timing of the initiation of clinical studies and availability of clinical data for drug candidates the timing and plans for future clinical data presentations the formation, future development plans or success of our collaboration agreements financial guidance and other certain statements regarding the future of our business. Because forward looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, many of which are outside of our control. Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our Form 10 Q that was filed on August 9, 2024, which is available at sec.gov.

Speaker 1

We undertake no obligation to update any of these forward looking statements, whether as a result of new information, future development or otherwise.

Speaker 2

A webcast of this call will be available on

Speaker 1

the IR page of Nektar's website at Nektar.com. With that said, I would like to hand the call over to our President and CEO, Howard Robin. Howard?

Speaker 3

Thank you, Vivian. Thank you all for joining us today. During the Q3, we made significant progress in advancing our highly promising pipeline focused on immunology and inflammation. Importantly, we are laser focused on advancing our Phase 2 studies for our asset Respegg alvaslupin, also known as Respegg, which is designed to directly expand functional Treg cells and engage multiple immunoregulatory pathways in patients with autoimmune disorders. As you know, Respegg has generated promising early data, which support its potential to become a highly differentiated and new mechanism in the treatment of atopic dermatitis and alopecia.

Speaker 3

There are approximately 15,000,000 people living with moderate to severe ectopic dermatitis in the USA today. It is estimated that under 10% of those patients who could receive biologics today are actually receiving treatment. We believe that new mechanisms are the key to growing this underserved biologic market. This is why we're so excited by Respek's potential as a first in class T regulatory cell mechanism for these patients with critical unmet need. Enrollment in our Phase 2 study in ectopic dermatitis is on track for a top line data readout in the first half of twenty twenty five.

Speaker 3

We're very pleased with the enrollment pace for this large 400 patient Phase 2b study and Jay Z will share more on the ongoing study in a moment. We believe there's also significant potential for Respegg to help people with alopecia areata. Nearly 7,000,000 people in the United States alone have or will develop the disease. The disorder significantly affects the quality of life for patients and the currently available JAK inhibitor therapies are not durable, have high relapse rates and carry significant safety risks. Therefore, there's an urgent unmet medical need for new therapies for these patients as well.

Speaker 3

Enrollment in our 2nd Phase 2b study of Respeg in 86 patients with severe to very severe alopecia areata also remains on track for top line data in the second half of twenty twenty five. 2 weeks ago, we published in Nature Communications the data from the Phase 1b study of Respegg in ectopic dermatitis and psoriasis. These data taken in aggregate bolster our decision to proceed with the clinical plan and advance our 2 Phase 2b studies in ectopic dermatitis and alopecia areata, and JZ will talk more about the important data from these publications later on in the call. Turning to our preclinical programs, we continue to advance NKTR-one hundred and sixty five, our novel TNFR2 agonist antibody program. Given the importance of TNF receptor 2, NKTR-one hundred and sixty five could potentially become a 1st in class treatment for autoimmune diseases such as multiple sclerosis, ulcerative colitis and vitiligo.

Speaker 3

Earlier this year at EULAR, we presented the 1st preclinical data for this program showing that NKTR-one hundred and sixty five demonstrated selective enhancement of Treg cell function, and JZ will discuss more about that later. We're currently conducting IND enabling studies with the goal of preparing for an IND submission in the second half of twenty twenty five. Now leveraging our learnings from NKTR-one hundred and sixty five, we've also designed a pipeline of TNFR2 containing bispecific molecules that pair TNFR2 agonism with other antibody targets. And we look forward to providing more color on this pipeline as development candidates emerge. In addition to NKTR-one hundred and sixty five, we also have our PEG CFS-one program, NKTR-four twenty two, in preclinical stage that was engineered to selectively modulate resolution processes of inflammation.

Speaker 3

We're excited to announce that preclinical data spanning multiple animal models, including collagen induced arthritis, were selected for an oral presentation at the upcoming 2024 ACR Convergence Meeting in Washington, D. C. This will be our first presentation of preclinical data from this program and NKTR-four twenty two has the potential applications in a number of therapeutic indications, including acute and chronic inflammation. Next, I'd like to discuss NKTR-two fifty five, our IL-fifteen program in oncology. We've recently announced multiple sets of data from this program published in Blood and at ASH.

Speaker 3

These data show that NKTR-two fifty five can enhance the activity of CAR T therapies. Today, we presented a late breaking abstract at SITC demonstrating the use of NKTR-two fifty five in a new application. In that abstract, NKTR-two fifty five showed the ability to recover radiation induced lymphopenia in patients with non small cell lung cancer. And Mary will talk more about that program on the call today. Now before I hand the call to JZ, I want to briefly discuss our transaction announced this week.

Speaker 3

Earlier this week, we announced that we signed an agreement to sell our commercial PEGylation reagent manufacturing facility in Huntsville to Ampersand Capital Partners. The PEG reagent facility will be spun out as a standalone ampersand portfolio company. Nektar will receive $90,000,000 in total compensation, which is comprised of $70,000,000 in cash and $20,000,000 in equity ownership in the new portfolio company, and we expect the deal to close on December 2. In addition to serving the plant's existing customers, the new company will continue to serve Nektar's PEG supply needs for Respegg and our other PEG related programs in our pipeline. We will retain all rights to royalties and milestones under existing PEG license agreements, including those related to DAPI PEGGYLE, which has already demonstrated positive Phase III EptiSt in lupus.

Speaker 3

This strategic divestiture of the plant allows us to streamline our operations and further bolsters Nektar's financial position as we head into top line data readouts in 2025. The proceeds will extend our cash runway into the Q4 of 2026. And with that, I'll hand the call over to JZ for an R and D discussion. JZ?

Speaker 4

Thank you, Howard. Starting with Respeg, this program is the most advanced IL-two Treg mechanism in the field. We believe there are major opportunities in both atopic dermatitis and alopecia areata that Respek could potentially address. Our Phase 1b Respek data in atopic dermatitis demonstrated dose dependent efficacy and encouraging durability observed long after patients completed the 12 week induction period. In fact, for both patient reported outcomes and physician assessed endpoints, we observed the same trends: rapid onset of effect, dose dependence and long term durability of control.

Speaker 4

The rapid onset of action and the type of extended disease control after the end of dosing rivals or outperformed that of dupilumab or JAK inhibitors. And these promising data have us and physicians very enthusiastic about the potential for long lasting responses and infrequent maintenance dosing with Respek in atopic dermatitis. As Howard mentioned, last month, we published preclinical and clinical Respegg data in Nature Communications. The manuscript includes results from mouse models and 2 human Phase 1b studies in atopic dermatitis and psoriasis, all demonstrating the potential of Respegg for the treatment of inflammatory skin diseases. The clinical results from these 2 different inflammatory skin conditions show that Respac improved physician assessed disease activity and patient reported outcomes.

Speaker 4

These promising findings clinically validate the Treg hypothesis that causally restoring Treg function through a central pathway of IL-two receptor driven Treg rescue can have therapeutic potential across a variety of chronic skin diseases. It also demonstrates that Respek can act on multiple disease driving pathways and is uniquely poised to address a diversity of immunopathology. Furthermore, consistent safety and tolerability profile was observed across the study and in line with previously published data. The exciting cross indication clinical efficacy we observed is budgeted by serum biomarker analysis demonstrating that Respek can modulate multiple immuno regulatory pathway to provide rapid onset and duration of efficacy. In the atopic dermatitis study, we included longitudinal serum proteomic analysis, and it demonstrated the plurality of Treg mediated pathway with potential effects on tissue resident memory T cell population, resulting in sustained efficacy seen in the antigen challenged mouse model and in the clinical trial.

Speaker 4

These proteomic findings further validate our therapeutic approach of using a Treg stimulator to dampen inflammatory responses and simultaneously restore immune balance in patients with chronic inflammatory skin diseases. Overall, the totality of the observation, including the biomarker analysis, provide an understanding of how treatment with ResVax led to dose dependent efficacy in the Phase Ib study over the 12 week treatment period, including its rapid onset of action and it also provides insight into pathways that could result in the sustained efficacy that was observed in the study even after treatment was removed. And all of this supports the design of our ongoing Phase 2b study in atopic dermatitis, which is enrolling roughly 400 patients with moderate to severe disease across 3 different regimens of ResVag versus placebo evaluated over a 16 week induction period. After the induction period, patients that meet a threshold to advance from induction to maintenance will be re randomized into 1 of 2 maintenance regimens at their original dose level to receive that dose level on either a once a month or once every 3 month regimen. The maintenance portion of the study is 36 weeks, which will in total provide 52 weeks of treatment duration for patients in the study.

Speaker 4

We will also follow participants for 1 year after the conclusion of the 52 week treatment period, enabling us to evaluate the potential remitiv effects of ResMed. Enrollment is on track and approximately 130 clinical investigator sites are active across the U. S, Canada, Europe and Australia. As Howard mentioned, we anticipate top line data from the 16 week induction period of this Phase 2b study in the first half of twenty twenty five and data from the 36 week maintenance period of the study will be available towards the end of 2025 or early 2026. Now turning to alopecia areata, which is a dermal disease localized to hair follicle.

Speaker 4

In this disease, the patient's immune system attacks the hair follicle disrupting its normal ability to keep and grow hair, leading to hair loss. We believe there is strong rationale for Respek in this indication based on the role of Tregs on the underlying pathology of the disease. The Phase 2b study is well underway and plans to recruit 84 patients with severe to very severe disease that will be randomized to Respeg or placebo. Patients will be treated for a period of 36 weeks and observed up to 60 weeks in total. Our primary endpoint for this study is mean percent improvement in SALT or the severity of alopecia tool at week 36.

Speaker 4

And we expect top line data in the second half of twenty twenty five. Now turning to NKTR-one hundred and sixty five, our TNFR2 agonist antibody. TNFR2 is highly expressed on Tregs, myeloid suppressor cells, regulatory B cells, neuronal cells and others. In Tregs, TNFr2 agonism has been shown to potentiate the effector function, suppressive functions and maintenance of Treg lineage stability, especially in the non lymphoid tissue compartments. Genetic studies show that if TNFR2 is absent, the phenotypic effect is autoimmunity as well as other conditions that resemble FOXP3 loss of function.

Speaker 4

In contrast, its presence and activation of its signaling has been associated with immunoregulatory function and tissue protection effects. Our TNFR2 agonist program is built upon many years of Treg experience that we've gained from studying Respek. ResPag, as you know, as an IL-two receptor pathway agonist drives JAK STAT signaling in Treg, which is critical to drive Treg proliferation and function in primary and secondary lymphoid organ. TNFR2, on the other hand, is the most abundant TNF superfamily member expressed on Tregs and a key activator of NF kappa B, which also controls the FOXP3 protein expression and is critical to maintain Treg function, especially in the non lymphoid organs. Thus, with the ResPag and TNFR2 agonist program, Nektar's pipeline provides target rationale for both lymphoid and non lymphoid Tregs and this is one of the reasons why we are so excited about NKTR-one hundred and sixty five.

Speaker 4

We presented the first preclinical data for this program at EULAR in June of this year And there were several key takeaways from that presentation. First, the TNFR2 agonists we discovered are able to signal through the TNFR2 multimeric receptor, a single arm monovalent antibody, which is a very novel effect for a TNFR2 agonistic antibody. 2nd, the clinical candidate NKTR-one hundred and sixty five demonstrated very high specificity for binding and signaling through TNFR2 on Tregs with little to no binding and signaling in conventional T cells, NK cells or monocytes. 3rd, NKTR-one hundred and sixty five as a monotherapy drove Treg proliferation, up regulation of FOXP3 and other activation markers primary Ereg. The 4th, the PKTD of NKTR-one hundred and sixty five and efficacy in the KLH DTH model were confirmed in the human TNFR2 knock in mouse model.

Speaker 4

We are very excited with the unique and differentiated profile of the antibodies that were discovered, and we are rapidly advancing NKTR-one hundred and sixty five into the clinic, and we expect to submit an IND for this program in the second half of twenty twenty five. Examples of indications that could be addressed include multiple sclerosis, mucosal immunology conditions such as ulcerative colitis and even dermal autoimmune diseases such as vitiligo. Since the TNFR2 agonist antibody specificities we discovered are active as single arm antibodies, we have leveraged this to design a pipeline of TNFR2 containing bispecific molecules that pair TNFr2 agonism with other specificity. These novel assets take advantage of multiple mechanisms to bring about novel molecules with novel approaches for targeting autoimmune diseases. We look forward to provide more color on this pipeline as development candidates emerge for future clinical entry.

Speaker 4

Overall, we have observed growing interest for a novel and selective TNFR2 agonists like NKTR-one hundred and sixty five. And as we move forward with our IND enabling studies as well as with our progression of the bispecific pipeline, we will continue to be open to the opportunity of working with companies that have interest in these areas to strategize on the best path forward. And we have a second preclinical target in the immunology space, PEG CSF1, called NKTR-four twenty two. This program is a PEG modified hematopoietic colony stimulating factor protein. Current standard of care chronic inflammatory disease therapies are designed to suppress inflammation and are not optimized for inflammation resolution and the restoration of tissue homeostasis tissue function.

Speaker 4

The goal of NKTR-four twenty two is to stimulate inflammation resolution and tissue repair by targeting the expansion, reprogramming and activation of anti inflammatory tissue resident macrophages. An agent that possesses such biological property could create a new class of anti inflammatory therapeutics and this is our objective with NKTR-four twenty two. To discover NKTR-four twenty two, we use in vitro and in vivo screening of CSF-one PEG conjugates to identify a CSF-one receptor agonist with a differentiated PKPD profile compared to the native cytokine. And what we found was in vivo treatment with NKTR-four twenty two showed significantly reduced target mediated clearance, sustained target engagement, durable signaling on both the ERK and AKT pathways, proliferation and expansion of tissue resident macrophages with minimal off target effects of monocyte infiltration or production of monocyte derived macrophage. Moreover, tissue macrophages induce the expression of inflammation resolution and tissue repair markers, including increased IL-four receptor alpha, Xyle-ten receptor alpha cell surface expression, iferocytosis receptor MerT KF regulation and metalloprotease activation.

Speaker 4

NKTR-four twenty two monotherapy showed efficacy in the mouse DSS colitis model and combination treatment of NKTR-four twenty two with etanercept greatly increased the efficacy of TNF alpha blockade on arthritic paw swelling after starting treatment at the peak of inflammation in Iraq collagen induced arthritis model. As Howard mentioned, data from our early research of this program has been selected for an oral presentation at this year's ACR Convergence Conference. This program has applications in a number of therapeutic indications that span acute and chronic inflammatory diseases. And we're excited to be presenting this first preclinical data next week. And with that, I'll hand the call over to Mary to discuss NKTR-two fifty five.

Speaker 4

Mary?

Speaker 5

Thank you, JZ. Now turning to our IL-fifteen based oncology program. Since October, we have 3 new data disclosures for NKTR-two fifty five. All of the publications and presentations can be found on Nektar's website. First, the journal Blood recently published data from Stanford study evaluating NKTR-two fifty five in combination with their proprietary CD1922 CAR T cell for B cell acute lymphoblastic leukemia.

Speaker 5

The results show NKTR-two fifty five added to Stanford's proprietary CAR T cell therapy increased the 12 month relapse free survival rate from 38% to 67% when compared to Stanford's historical controls. Also of note, NKTR-two fifty five enhanced lymphocyte trafficking to diseased tissue, which further supports the mechanism of action. 2nd, the abstract for our ASH poster presentation was made public this week. At the annual conference in December, we will present final data for the 15 patients in our Phase 2 placebo controlled trial evaluating NKTR-two fifty five after approved CD19 CAR T cell therapies for large B cell lymphoma. We're encouraged by the 6 month complete response rate data from this trial, which align with the findings from the Stanford trial and further confirm NKTR-two fifty five's ability to enhance CAR T cell efficacy.

Speaker 5

3rd, data presented today at SITC strengthen our belief in NKTR-two fifty five's therapeutic potential in a new application as a combination treatment with checkpoint inhibitors. For some background, radiation induced lymphopenia is a common occurrence after chemoradiation and is associated with a worse overall survival in multiple solid tumors including lung cancer. The presence of severe lymphopenia at the initiation of consolidative durvalumab therapy after definitive chemoradiation for unresectable locally advanced non small cell lung cancer was found to be an independent predictor of shorter progression free survival and overall survival. Doctor. Steven Lin presented interim data from his Phase 2 study evaluating NKTR-two fifty five to restore lymphocyte counts after chemoradiation for patients with locally advanced non small cell lung cancer.

Speaker 5

In comparison to MD Anderson's historical control data, NKTR-two fifty five in combination with durvalumab demonstrated a statistically significant improvement in the 8 week absolute lymphocyte count. These interim data presented as a late breaking abstract at SITC today suggest that NKTR-two fifty five has the potential to confer clinical benefits in patients with locally advanced non small cell lung cancer. Now looking ahead, we're continuing our Phase 1 trial with AblZeta to assess NKTR-two fifty five with their TIL for advanced non small cell lung cancer patients who do not respond to anti PD-one therapy. We're also collaborating with Merck KGaA to evaluate NKTR-two fifty five in combination with Davencio for bladder cancer with the first potential PFS readout expected either by the end of this year or in the 1st part of next year as this is an event driven analysis. All in all, the growing body of evidence highlights the broad applicability of our IL-fifteen.

Speaker 5

As new data emerge, we continue to explore partnering options to continue the NKTR-two fifty five development program. And with that, I'll turn it over to Sandra for our financial guidance. Sandra?

Speaker 2

Thank you, Mary, and good afternoon, everyone. We ended the Q3 with $249,000,000 in cash and investments and with no debt on our balance sheet. With the proceeds from the sale of our Huntsville, Alabama commercial PEG manufacturing facility for $90,000,000 which includes $70,000,000 in cash and $20,000,000 in equity ownership, our financial position is further strengthened. We now expect our cash runway to extend into the Q4 of 2026, taking us through several key data milestones, including top line data from both of our Phase IIb Respeg studies. We now expect to end the year with approximately $265,000,000 in cash and investments.

Speaker 2

I'll briefly review our quarterly financials and share updates to our financial guidance for 2024. Our revenue was $24,100,000 for the Q3 of 2024. We now expect our revenue for the full year to be between $90,000,000 $95,000,000 which includes $60,000,000 to $65,000,000 in noncash royalties and $30,000,000 to $35,000,000 in product sales. Our product sales generate a negative gross margin. We expect to recognize a gain upon the close of the sale of the Huntsville manufacturing facility in the Q4 of approximately $40,000,000 to $45,000,000 We do not expect to owe any taxes on this gain.

Speaker 2

R and D expense for the Q3 of 2024 was $35,000,000 and we still anticipate full year R and D expense to range between $120,000,000 $130,000,000 with approximately $10,000,000 of noncash expense. G and A for the Q3 of 2024 was $19,000,000 We now expect G and A expense for the full year to be between $75,000,000 $80,000,000 with an increase in the non cash portion to approximately $12,000,000 from $5,000,000 to $10,000,000 Lastly, our 2024 non cash interest expense remains unchanged and is expected to be between $20,000,000 $25,000,000 Our net loss for the Q3 of 2024 was $37,000,000 or $0.18 basic and diluted loss per share. And as I mentioned earlier, we plan to end 2024 with approximately $265,000,000 in cash and investments and a runway that extends into the Q4 of 2026. And with that, we'll now open the call for questions. Crystal?

Operator

Thank And our first question will come from Yasmeen Rahimi from Piper Sandler. Your line is open.

Speaker 6

Good afternoon, team. Thank you so much for all the wonderful updates across the entire pipeline, really informative. I guess one question, I think a lot of investors are eagerly waiting the AD and AA readouts and it was really appreciated the color you gave that enrollment is progressing really well and on track for delivering both data readouts. But could you kind of is there an opportunity to quantify like where how close we're getting to bringing both of the studies to finish line? Do you see I think that can be really helpful.

Speaker 6

And then 2, I think the second question that's most often asked is the ability to on a positive data, especially from the AD study, how to extrapolate efficacy and biologically experienced patients? And I apologize for asking 2 questions. I'll jump back in the queue.

Speaker 3

Mary, you want to take that question?

Speaker 5

Yes, sure. Thanks, Yasmeen for the question. So starting with the first one, can we provide more color on enrollment? I can just say, we started this trial last October in 2023, and we have advised that we will have our top line data in the first half of 2025. What we will commit to doing is on clinicaltrials.gov.

Speaker 5

When we've completed enrollment, we will change the status on clinicaltrials.gov, so people can continue to monitor the progress of our trial there. In terms of efficacy, our clinical trial in the Phase 1 study was in biologic naive patients and we made the decision to also advance Respeg into a Phase 2b in biologically naive patients. And so we will be able to have a read through of our data from the Phase 1. I think today, it's not well understood what the efficacy will be with biologics and biologically experienced patients. And as we see more data with the OX40 studies and other compounds, we'll have a better sense of what is the response rate in that patient population.

Speaker 5

I think today, it's too early to say.

Speaker 6

Thank you.

Speaker 5

Thank you, yes.

Operator

Thank you. Our next question will come from Julian Harrison from BTIG. Your line is open.

Speaker 7

Hi, thank you for taking my questions and congratulations on all the recent progress. First, I'm wondering if you have a good sense for when damages could be publicly specified in your ongoing litigation against Eli Lilly?

Speaker 3

Yes. Look, obviously, we really can't comment on an ongoing lawsuit. I can tell you that we're in the process of mediation. We're talking with each other about how to resolve this. And we're Nektar is fully committed to following through and we believe we have a very strong case.

Speaker 3

And clearly, there were a number of mistakes made during that clinical trial process. So while I can't comment on when we'll have a damages number and when we'll get this resolved, I can tell you that we're actively pursuing it. But course, it's an active lawsuit. And consequently, I really can't get into a lot of discussion on it.

Speaker 7

Understood. And one more, if I may. Just on your Phase 2b atopic dermatitis trial, can you remind us of the protocol pertaining to topical steroid use?

Speaker 3

Mary, you want to cover that?

Speaker 5

Yes. So this is not a combination trial. So patients have to wash out of the use of topical corticosteroids before they enroll into the study. And then they're not permitted to use topical corticosteroids. And if they do after the 1st 2 weeks of treatment, then that would be the use of rescue medication and those patients would discontinue treatment.

Speaker 7

Got it. So all rescues are considered study discontinuations?

Speaker 5

That's correct. Now one aspect of our trial that I think incentivized is patients to stay on the trial and adhere to the rules for no use of topical corticosteroids is after the 16 week induction period. If patients have adhered to the protocol, they have the possibility to re randomize in the maintenance period. And of course, if they are not responders, then they will go to an escape arm and receive the highest dose of Respegs. So particularly for patients where there's not great access to biologics in Europe, where we're going to enroll roughly 65% of the patients, I think we'll see strong adherence to the protocol.

Speaker 7

Okay, great. Very helpful. Thank you.

Operator

Thank you. Our next question will come from Jay Olson from Opco. Your line is open.

Speaker 4

Hey, this is John on the line for Jay. Thanks for taking the question and congrats on progress. Just on the ResPACK 80 trial, since you've been enrolling patients for some time now, I'm wondering if you can provide some color on the patient baseline characteristic you're seeing, for example, the baseline EZ score? And also if you can share the split between patients enrolled from U. S.

Speaker 4

Sites versus ex U. S. Sites, that would be super helpful. Thank you.

Speaker 5

Yes. Hi, this is Mary. This is a fully blinded study and we've really meticulously drafted protocols and plans to make sure that we capture data and do so accurately and timely and that we clean our data and that we maintain a blind of the study. We I personally have not been looking at those aggregated data in a blinded fashion. And we promise that we will provide you with very clear baseline characteristic traits, as well as very clear top line data for 3 different doses compared to placebo.

Speaker 4

Got it. Thank you.

Operator

Thank you. And our next question will come from Jessica Fye from JPMorgan. Your line is open.

Speaker 8

Hey, guys. Good afternoon. Thanks for taking my questions. I guess, first one, this data at EADB on serum proteomic biomarkers in AD, I believe it was noted that Respeg reduced expression of serum proteins known to be elevated in AD. And I was curious if those expression levels stay reduced even after Respeg therapy was stopped.

Speaker 8

Just kind of trying to get the phenomenon you saw where patients experienced sustained benefit even after stopping Respegg in the Phase 1b?

Speaker 4

Hey, Jeff. This is JZ. It's a great question. Unfortunately, though, the last time point that was collected in that study was week 12 at the end of induction. So we don't have proteomic results beyond into the drug free follow-up.

Speaker 4

However, in the Phase 2, we are collecting samples all through the maintenance period and also after the 1 year treatment in the 1 year follow-up. So we'll be able to answer your question very directly in that study, but not in the Phase 1b where collection stopped at week 12.

Speaker 8

Okay. And then, forgive me if I just didn't answer your question, but on the alopecia timing shift from, I think it used to be first half then mid-twenty five, now back half '25. Is that like a delay of getting sites up and running? Is it screen failure or something? What's kind of behind that timing shift?

Speaker 4

Yes. So that study began

Speaker 9

in

Speaker 5

Yes. This is Mary. Yes. This is Mary. So as you know, the trial for atopic dermatitis began in October of 2023.

Speaker 5

And then it was about 5 months later that we began the alopecia areata study. And those patients are followed for 36 weeks of treatment. And so I don't think we're necessarily far off from our predictions. I think we're very close to what we predicted when we started the study. We are enrolling in Canada, the United States and in Europe.

Speaker 5

It is true that in any trial these days that you're going to run-in immunology and with the globalization process in Europe, it does take longer to bring the European sites on than it is in U. S. So you certainly start your enrollment earlier in the United States and Canada, but we are, on our projected time lines and we'll have the data in the second half of twenty twenty five.

Operator

Thanks. Thank you. And our next question will come from Andy Hsieh from William Blair. Your line is open.

Speaker 9

Hi, thanks for taking our questions. Just a question on the SITC poster that's presented today. One is, you looked at NK cell proliferation. I'm just wondering if there are any other relevant cell populations that you looked at, that's part 1. Part 2 is really on the control arm.

Speaker 9

I think, Mary, you said that they basically took patients from MD Anderson in the same basically in the same institution. I'm curious if the lymphocyte count pattern is similar to some of the PACIFIC studies that have been done with AstraZeneca. I'm just curious about the consistency of that trend on the control arm. Thank you.

Speaker 5

Sure. Hi, Andy. It's Mary. So in terms of the historical control arms, these are all patients that were treated at MD Anderson. There were 39 of them that antedated the approval of darolumab.

Speaker 5

So they were only treated with chemo radiation. And then there were 120 patients that were treated with CRT plus derva. And the ALC counts in these patient populations are relatively analogous. And what Doctor. Lin showed today was if you look at cycle 1 day 8, the median increase in ALC was 2.35 fold higher and at cycle 2 day 8, it was 3.6 fold higher and these were statistically significant against his controls.

Speaker 5

And what he is astounded by is the persistence of the lymphopenia that he's seen in these patient populations and that it's remarkable that this effect persists for 12 months after completing radiation therapy. I don't know, Andy, if you know the literature, but Steven Lin did put in the background information his data from the study that he did with again an analogous patient population. And there has been a second study that was completed at Johns Hopkins and it's an author by the name of Friedes. And what he showed was, he used a slightly different absolute lymphocyte count than Steven Lin. Steven Lin used 0.23x10 to the 9 liters, for lymphocytes.

Speaker 5

And at the Johns Hopkins Center, they used, 0.5. And they showed that the median PFS for those patients with severe lymphopenia was and this is on the PACIFIC regimen on durvalumab was only 217 days, which is about 7 months versus 5 70 days for those patients that didn't have severe lymphopenia. And when you look at what the median PFS was in the PACIFIC trial for patients on placebo, it was 5.6 months. And so what Stephen Lynn's point is, is when you look at these data, it's astonishing that patients with severe radiation induced lymphopenia at various thresholds really don't do well and seem to have very, very little benefit from dravolumab. And so he has a strong belief that combining NKTR-two fifty five with dravolumab in this setting would be a very powerful mechanism to improve the PFS and overall survival of these patients who aren't deriving benefit today of a checkpoint inhibitor.

Speaker 4

And Andy, I can answer your first question. So what was shown today were NK cell effects, both proliferative effects as well as modification of cell surface proteins associated with activity, on the NK cells in other phenotypic functions. That was shown that's the target one of the targets of the drug. But in the study, there is quite a bit more phenotypic analysis as well as assessing T cell populations and then assessing the overall proportion of the cells in the patients that recovered from lipopenia, looking at the memory cell pool and also just looking at the overall health. One of the underlying hypotheses, as Mary was also mentioning, is the cells themselves, because in the patients that have lymphopenia, they're missing lymphocytes, they're probably also missing lymphocytes that target the tumor.

Speaker 4

So also looking at the recovery of specific populations as well. Those are all key objectives that are coming in the study.

Operator

Thank you. And our next question will come from Arthur He with HCW. Your line is now open.

Speaker 10

Hey, good afternoon, everyone. I just had a quick question regarding the AD study design. So after the 36 week maintenance period, does do the patient have the opportunity to receive the treatment continuously during the follow-up?

Speaker 5

Hi, yes. This is Mary. Hi, Arthur. I'm sorry. Go ahead, JZ.

Speaker 4

Yes. I was just going to say, Arthur, that no, in this study, so after the 52 weeks of total treatment, which is both the 16 week induction as well as the maintenance period, then the patients will be followed for 52 weeks with no further treatment. So our one of our objectives here is treat

Speaker 3

for

Speaker 4

a year and then assess the remitiv effect after 1 year treatment.

Speaker 10

I see. So which means we can get the data regarding how the off treatment control from this study?

Speaker 4

Yes. So for example, like as the program continues and say moves into later stage studies like Phase 3, eventually this Phase 2 study will have data from both the 1 year treatment as well as the 1 year off treatment follow-up. That's exactly right. Okay, got you. Thanks for the color.

Operator

Thank you. And I am showing no further questions from our phone lines. I'd now like to pass the conference back over to Howard Robin for any closing remarks.

Speaker 3

Well, thank you everyone for joining us today. And we remain focused on advancing our I and I pipeline and we're very excited about the potential for each of our unique programs. I want to thank all of our employees for their hard work and diligence and I want to thank our investors for their continued support and we look forward to providing you with updates on our progress. So stay tuned. Thank you very much.

Operator

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.

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Key Takeaways

  • Respegg alvaslupin (Respek) Phase 2b trials are enrolling on schedule: a 400-patient atopic dermatitis study with topline data expected in H1 2025 and an 86-patient alopecia areata study with topline data in H2 2025.
  • The Phase 1b results published in Nature Communications demonstrated dose-dependent efficacy, rapid onset, long-term durability, and a favorable safety profile of Respegg in atopic dermatitis and psoriasis, supporting advancement to Phase 2b.
  • Preclinical advancement includes NKTR-165, a selective TNFR2 agonist antibody that expands Treg function (IND planned H2 2025) with a growing bispecific pipeline, and NKTR-422, a PEG-CSF1 program targeting inflammation resolution, with data to be presented at the 2024 ACR Convergence.
  • In oncology, NKTR-255 (an IL-15 program) has shown in Blood and ASH publications enhanced CAR T cell efficacy and in a SITC late-breaking abstract demonstrated significant recovery from radiation-induced lymphopenia in non-small cell lung cancer, supporting combinations with checkpoint inhibitors.
  • Nektar strengthened its finances by selling its PEG manufacturing plant for $90 million (cash and equity), extending its cash runway into Q4 2026 with approximately $265 million projected year-end cash, funding key 2025 milestones.
A.I. generated. May contain errors.
Earnings Conference Call
Nektar Therapeutics Q3 2024
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