Nektar Therapeutics Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2025

There are 12 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Nectar Therapeutics First Quarter twenty twenty five 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, Corinne Franklin in Nektar Investor Relations, who is filling in for Vivian Wu, who is on maternity leave. 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 Zaleski, our Chief Research and Development Officer Doctor. Brian Kotson, 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 the 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, or actual results may differ materially from these statements. Important risks and uncertainties are set forth in our Form 10 ks that was filed on 03/14/2025, which is available at sec.gov. We undertake no obligation to update any of these forward looking statements, whether as a result of new information, future developments or otherwise. A webcast of this call will be available on IR page of Nektar's website at nektar.com.

Speaker 1

With that said, I would like to hand the call over to our President and CEO, Howard Robin. Howard?

Speaker 2

Thank you, Corinne, and thank you all for joining us today. During the first quarter of twenty twenty five, we've been concentrating on the successful development of our immunology pipeline with a focus on advancing Respag Aldis Leukin, also known as Respag, in three separate Phase II studies and completing the IND enabling studies for our lead earlier stage program, NKTR-one 65, a TNFR2 antagonist antibody. Rezpeg is a first in class T regulatory cell biologic therapy with a broad potential in a number of immune disorders. As a novel immune modulator mechanism, RezPEG is poised to help a significant number of patients battling chronic conditions. In June, we plan to share our first top line results from the sixteen week induction period for the 400 patient Phase 2b study known as Resolve AD, which is studying RezPEG in biologic naive patients with moderate to severe ectopic dermatitis.

Speaker 2

I will let JZ review the upcoming important data milestone and the study design in a moment. Our objective in this study is to demonstrate efficacy and safety, and establish a dose to take forward in phase three studies. The study also has a thirty six week maintenance period, where patients will receive the same dose from induction, but at every four week or every twelve week dosing intervals. The data from this maintenance period will be available in early twenty twenty six. Ectopic dermatitis is a significant opportunity as there's a high unmet need for new mechanisms to treat these patients.

Speaker 2

There are currently thirty million adult patients with ectopic dermatitis in The US and two twenty million adult patients globally. About half of these patients have moderate to severe disease. And this means their eczema covers a significant portion of their body and can severely affect their overall quality of life. According to the National Eczema Association, adults with ectopic dermatitis are three times more likely to experience anxiety and depression, which increases with the severity of the disease. Eczema could also cause severe itching and inflammation, impact a patient's sleep, and lead to body shame.

Speaker 2

Currently, approximately eight percent of the patients with moderate to severe disease are treated with a biologic, most frequently DUPIXENT. And yet, we know that about half of those patients ultimately either don't benefit from treatment or become refractory, and once treatment is stopped, their ectopic dermatitis returns. We believe this is because the approved biologics are effective at controlling the signs and symptoms of the disease, but they do not therapeutically target the underlying disease pathology to restore and heal the skin. As a T regulatory cell therapy, Respag instead regulates multiple immune pathways to address the overall disorder, and so we believe it could provide a much needed alternative to the IL-thirteen and IL-thirty one based therapies currently approved for these patients. For our ResPEG AA Phase IIb study in alopecia areata, we will report top line results in December of this year.

Speaker 2

The patients enrolled in this study have severe to very severe alopecia areata. These are patients who have lost at least 50% of the hair on their scalp. In addition, this disease can impact the patient's eyebrows, eyelashes and facial hair. Nearly seven million people in The US have alopecia areata, and one hundred and sixty million people worldwide. Many of these patients also have other autoimmune diseases.

Speaker 2

Our 90 patient study is evaluating a thirty six week treatment period for patients with alopecia areata as compared to placebo. We will then evaluate patients once they are off therapy to understand the long term remitted potential for RespEG. Today, JAK inhibitors are used to treat alopecia, and we know that when therapy is removed, patients lose their hair again very quickly. Our hope is that RespEK can provide a new treatment paradigm and a long term solution for patients battling this chronic condition. In Type one diabetes, RespEK has great potential as a T regulatory cell therapy to slow the progressive loss of insulin producing beta cells, which are the target of the patient's overactive immune cells in this disease.

Speaker 2

We're looking forward to the start later this year for the important proof of concept study in new onset type one diabetes, which is being sponsored and funded by TrialNet. Finally, with respect to our early stage immunology pipeline, we're advancing NKTR-one 65, our TNFR2 agonist antibody program, through IND enabling studies this year, and we've made great progress on this front. We're on track to complete these studies in 2025, and we'll be prepared to submit an IND filing. In addition, the bispecific program, NKTR-one 66, which incorporates a TNF R2 epitope with a validated antibody target, is also on track, and we're advancing this new program into preclinical studies. Lastly, we remain in a strong financial position with a runway into the fourth quarter of twenty twenty six.

Speaker 2

And with that, I'll hand the call over to JZ for a review of the upcoming data milestones. Jay Z?

Speaker 3

Thanks, Howard. And thanks to everyone on today's call. To begin, I'd like to share with you some of the trial design details for our ResPEG studies, which will be providing Nektar with numerous data catalysts over the next nine months. First, in atopic dermatitis, Resolve AD enrolled approximately 400 biologic naive patients from October 2023 to January 2025 across multiple geographic regions globally. The fifty two week study is designed in two distinct phases, the induction phase and the maintenance phase.

Speaker 3

As you'll recall, we only had the induction phase, which was twelve weeks of treatment in the prior Respag phase 1b study. The goal of our phase 2b study is to identify a proper dose for an initial sixteen week induction period, which can be our phase three dose, and also to identify a maintenance dose regimen that would be used for an additional thirty six weeks after induction to maintain or potentially even improve effect for patients. For the induction, we are evaluating three dose regimens as compared to placebo with a three to three to three to two design. A high dose of twenty four micrograms per kilogram twice monthly, a mid dose of eighteen micrograms per kilogram twice monthly, and a lower exposure dose of twenty four micrograms per kilogram once monthly, with the goal, as I just stated, to establish a dose for induction treatment to advance into phase three studies. As you will recall, the twenty four microgram per kilogram dose given every two weeks was carried over from the phase one b study of Respag in atopic dermatitis.

Speaker 3

And this dose arm achieved statistical significance as compared to placebo following only a twelve week induction treatment period in that study. Respag resulted in an 83% decline in EASI scores, as compared to 47% in placebo. After withdrawing the treatment in the phase 1B, we observed a strong signal of a remitted effect with patients maintaining their reduced EASI scores for thirty six weeks. Once the twenty four microgram per kilogram twice a month dose was stopped at week twelve. The mid dose of eighteen micrograms per kilogram given twice a month is a dose that is in between the twelve microgram per kilogram level that was studied in the phase one b, and the highest dose study of 24.

Speaker 3

And finally, in order to approximate the PK exposure for the low dose of twelve micrograms per kilogram from the phase one b study, we also gave the twenty four microgram per kilogram dose once a month. Importantly, because RespEG is an agonist, we maintained weight based dosing in our phase 2b study in atopic dermatitis as well as in the alopecia study. And our primary endpoint is the mean change in EASI score from baseline. And we are also measuring a secondary endpoints, EASI 75, EASI 90, BSA, itch, and VIGA scores. As you will recall, in the phase 1b study for Raspeg and atopic dermatitis, all patients were enrolled in The US.

Speaker 3

Because we observed an increased placebo effect in The US in our phase 1b study, and other investigators have experienced the same challenge, we targeted a lower enrollment number in The US for the phase 2b study. As a result, we enrolled only seventeen percent of patients in The US, with sixty seven percent in Europe, primarily in Poland, and the remainder in Australia and Canada. We took other important measures to address the high placebo rates observed in other atopic dermatitis studies. First, prior to randomization and resolve AD baseline scores for patients were collected at screening. And again, at randomization patients with high variability in their baseline scores were screen failed.

Speaker 3

And this was done to eliminate patients with unstable disease. Another key objective in the phase 2b study was to utilize primarily sites that were led by board certified dermatologists, who had specific prior experience in successful atopic dermatitis studies. This ensured higher quality sites were participating in the study. We enrolled patients across 110 global sites, and the sites were carefully chosen and trained as part of our study operations. As I just stated earlier, we saw a strong signal of remitted effect after the twelve week induction period in our phase 1B, even after removal of two twice monthly dose regimens after week twelve.

Speaker 3

For the phase two b, we are exploring what continued treatment with breastfeed will look like after the induction period for a thirty six week maintenance period. At the end of the sixteen week induction period, patients who achieved at least an EC50 score were re randomized to receive one of two maintenance regimens at their original dose level for a thirty six week treatment period on either a once a month or once every three month regimen. We're excited to see the effect of continuing to treat after induction for ResMed, which is Howard said earlier, will be a future data readout in early twenty twenty six. Patients that did not need an easy 50 or better efficacy threshold at week sixteen were permitted to go into an escape arm, which is the twenty four microgram per kilogram dose given every two weeks. Because Respag has an immune modulating mechanism, we are also following participants for one year after the conclusion of the fifty two week treatment period, enabling us to evaluate Respect's potential for a long term remit of effect in patients.

Speaker 3

We want to understand how Respect differentiates from the IL-thirteen based mechanisms and JAK inhibitors, where disease recurs in a substantial fraction of patients after discontinuing treatment. Now, on to alopecia areata, as Howard stated, we expect top line results from the ninety patient alopecia study in December of this year. This study was started in March of twenty twenty four, and we completed enrollment in February of this year across 30 sites globally. Sixty two percent of patients were enrolled in Poland, Twenty Four Percent in Canada and the rest in The US. The study has a 36 treatment period, and is a similar design compared to the phase two study of baricitinib in alopecia.

Speaker 3

Alopecia areata is a dermal disease in which the patient's immune system mistakenly attacks the hair follicle and disrupts the body's normal ability to keep and grow hair, leading to severe hair loss and lack of hair regrowth. There is strong rationale for Respag in this indication based on the role of Tregs to either prevent or down regulate the underlying pathology of the disease. Patients had to present with severe to very severe disease, defined as severity of alopecia tool score or SALT 50 to SALT 100 for at least six months in order to be eligible for inclusion. We are evaluating two doses, the twenty four microgram per kilogram and the eighteen microgram per kilogram given every two weeks as compared to placebo. Placebo rates tend to be quite low, under ten percent in this disease setting.

Speaker 3

Our primary endpoint for this study is mean percent improvement in salt at week thirty six. We will also be looking at a number of other secondary endpoints, including the proportion of patients that had certain levels of improvement in SALT score, including the regulatory approval endpoint for a phase three study, the SALT 20 responder health. As Howard stated, are also excited about the start of the phase two trial net sponsored study, type one diabetes for ResMed. The 66 patient placebo controlled study will enroll stage three new onset type one diabetes patients. And we look forward to providing the RespEG drug for this important indication.

Speaker 3

Finally, we are making great progress in the IND enabling studies for our novel TNF R2 agonist antibody program, NKTR-one 65. TNF R2 agonism potentiates Treg function, as well as maintenance of Treg lineage stability, especially in the non lymphoid tissue compartment. The first preclinical data from this program presented last year at EULAR demonstrated the NKTR-one hundred sixty five has a very high specificity for signaling for TNF R2 on Tregs and enhancing their immunoregulatory phenotype. It also showed that the agonist we discovered is able to signal through the TNFR two multimeric receptor as a single arm monovalent antibody. We believe this is the only antibody in this class being developed that has this attribute.

Speaker 3

We are very excited with the unique and differentiated profile of this antibody, and we believe it has potential to become a first in class treatment for various autoimmune diseases, including multiple sclerosis, ulcerative colitis, and vitiligo. We're also designing a pipeline of bispecific molecules that pair TNF R2 agonism with other antibody targets, and we've identified the first bispecific antibody, NKTR-one 66 in this program. This first bispecific antibody incorporates the TNF R2 epitope with another validated antibody target, and we are initiating our preclinical studies now. We look forward to providing more details on this antibody as the studies progress. For NKTR-two fifty five, our IL-fifteen based oncology program, I am excited to share the data from our collaborators at the Fred Hutchinson Cancer Center in Seattle, were accepted for an oral presentation at this year's European Hematology Association Congress being held in Milan.

Speaker 3

This will be the first data presented from their investigator sponsored study of NKTR-two 50 five following CD19 directed CAR T cells, BRYONZI, in the second and third line large B cell lymphoma patients. We believe these data reinforce the potential for NKTR-two fifty five to improve upon existing cell therapies for patients. We continue to explore opportunities for continued development of this drug candidate in partnership with collaborators. And now I'd like to turn the call over to Sandy for a review of our financials.

Speaker 4

Thank you, JZ, and good afternoon, everyone. We ended the first quarter of twenty twenty five with $220,700,000 in cash and investments and with no debt on our balance sheet. We remain in a strong financial position and still expect our cash runway to extend into the fourth quarter of twenty twenty six and to end 2025 with approximately $100,000,000 in cash and investments. Turning to the income statement, our first quarter twenty twenty five revenue of $10,500,000 was within our guidance range and comprised of non cash royalty revenue. We currently expect our quarterly revenue to remain at a similar level to Q1 for the remainder of 2025, totaling approximately $40,000,000 for the full year.

Speaker 4

Our R and D expenses were $30,500,000 for the first quarter of twenty twenty five, and we still anticipate full year R and D expense to range between $110,000,000 and $120,000,000 including approximately $5,000,000 to $10,000,000 of non cash depreciation and stock based compensation expense. Our G and A expenses were $24,300,000 for the first quarter. We still continue to expect G and A expense for the full year of 2025 to be between 60,000,000 and $65,000,000 including approximately 5,000,000 to $10,000,000 of non cash depreciation and stock based compensation expense. Note that our operating expenses are not ratable throughout the year and will vary based on the level and type of activities each quarter. For example, our R and D expenses are higher in the first half of the year with greater study operational activities in our ResPEG Phase II atopic dermatitis study.

Speaker 4

Noncash interest expense for the first quarter was $5,000,000 and is expected to remain at a similar level for the remaining three quarters, totaling approximately $20,000,000 for 2025. This quarter, we have included a new non operating line item on our income statement titled Gain or Loss from Equity Method Investment. As a reminder, on 12/02/2024, we completed the sale of our Huntsville manufacturing facility for consideration of $64,700,000 in cash, net of transaction costs, and approximately 20% ownership in the new portfolio company, Gannett Biochem or Gannett. Under the required equity method of accounting, our investment in Gannett was recorded at fair value. At each subsequent period end date, our share of Gannett's gains or losses are recorded using the hypothetical liquidation at book value, or HLBV, method.

Speaker 4

The HLBV method calculates the change in the hypothetical amount we would be entitled to receive if Gannett were liquidated at book value at the end of each period. This is a non cash charge recorded outside of Nectar's operating expenses and from period to period could fluctuate from a loss to a gain. In the first quarter, due to this accounting methodology, we recorded a non cash loss from equity method investment of $4,500,000 and we currently expect a loss of approximately $10,000,000 for the full year 2025. And importantly, as I just said, this is non cash. We have no commitments to contribute cash to Gannett as an equity investor.

Speaker 4

We are simply providing this information as housekeeping items so that you can forecast the rest of 2025 for this new non cash line item. Our net loss for the first quarter was $50,900,000 or $0.24 basic and diluted net loss per share. Net loss before the equity method investment totaled $46,400,000 equating to a non GAAP basic and diluted net loss per share of $0.22 And as I stated earlier, we still expect the year to end the year with approximately $100,000,000 in cash and investments with our cash runway extending into the fourth quarter of twenty twenty six. Finally, as we head into our June data reporting, we intend to enter into a quiet period for the month of June until we report the top line results for the ResPEG atopic dermatitis study. And with that, we'll now open the call for questions.

Speaker 4

Operator?

Operator

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

Speaker 5

Hi, this is Dominic on for questions and congrats on the quarter. I have a couple of questions. One, could you remind us kindly what you hope to see in RESOLVE AD to move forward into a Phase three? And is your plan to move forward with one or two doses for that? And then also, is your expectation for the placebo response in resolve AV?

Speaker 5

Thank you.

Speaker 2

JZ, would you like to answer that?

Speaker 3

Certainly, thank you for the question. So firstly, you know, one of our objectives is that we of course, you know, had phase one data already, and have demonstrated proof of concept in atopic dermatitis. So one of the, you know, the things we'd like to see is a replication of that data. So that's one of the components of efficacy that we'd like to see. Then we'd also compare the results against the other key benchmarks.

Speaker 3

And of course, Dupixent is a very important benchmark. It is the leading standard of care in this space. So we'd like to be, you know, minimum in the range of the efficacy that you see with Dupixent. And then of course, we'd like to even better improve on that and replicate our results of phase one. In terms of the number of dose levels that we would like to study the purpose of the phase 2b study is it's a classical dose range finding set.

Speaker 3

So ideally we would identify, you know, clear dose and dose regimen that we would take forward. So we'd have to obviously see what the results show us, but in the ideal case, we would have one dose level that we would be taking forward into the phase three studies. And can you remind me your third question, please?

Speaker 5

Yeah, it was what are the expectations for the placebo response in resolve AD?

Speaker 3

Yeah, okay, thank you. Yeah, so as I mentioned in the call, you know, the phase one, we use sites over 100% in the 13 sites, and we saw about a 47% placebo response, which was a little bit on the higher side, you know, in the range of modern studies, but on the higher end. And it's certainly reflective of a general trend that we're seeing, particularly in sites in The US. And so we took proactive measures in order to try and control that placebo response rate by only enrolling a proportion of patients in The US, Seventeen Percent, and enrolling in the rest of the world for the remainder of the patient population, as well as some of the other things that I mentioned, such as using board certified dermatologists in the majority of sites to have consistent and highest quality rating of the disease. So we'd like to see a lower rate, for example, than what we saw in Phase 1b, and we'll look forward to reporting the actual placebo response rate as we prepare and report the top line next month.

Operator

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

Speaker 6

Hi, congrats on the progress and thank you for taking my questions. On the Phase 2b atopic derm data we're expecting in June, or rather the trial, I have a specific question.

Speaker 7

I was wondering if you're able

Speaker 6

to tell us how many patients have progressed to the maintenance portion of the trial so far and of those, how many have crossed over to the escape arm of the trial? Are you blinded to that? Or is that maybe something you could disclose now?

Speaker 2

Did you get that question?

Speaker 3

Julian? Yes, this is Jay Z. Yeah, so it's a good question. We can't disclose that kind of information right now, but we will disclose that as well as more features of the data and the actual results next month when we present the top line results of the study.

Speaker 6

Alright, thank you.

Operator

Thank you. Our next question comes from Jason J. Olson from Oppenheimer. Your line is open.

Speaker 8

Hey, congrats on the progress and thank you for taking our questions. When you shared the results from the Phase 2b RESOLVE study, can you just talk about the scope of the data you're planning to share? And of the secondary endpoints, which are most important?

Speaker 3

Yeah, thanks Jay. So one of the kind of unique things about the dermatology conferences is that they're a little bit more lenient than say ASCO is in terms of embargo data. And I think that's a good thing here. So certainly when we present the top line data, the primary endpoint will be a key key element that we would present, and that's the percent change from baseline and EZ score, and compare to placebo all of the cohorts one by one. And then there are secondary endpoints, and you ask which ones are quite important, So definitely EZ-seventy five, EZ-ninety, VIGA, those are quite important.

Speaker 3

Probably itch is also quite important. I mean, are the ones that really firstly are used as registering endpoints in the case of EB-seventy five of the IGA, and also things like it are just key for the kind of comparisons that we do. And then we also give the picture, the picture isn't the efficacy, it'd be the total tolerability, you know, the total ability to understand the both risk and the benefit of the drug. So I hope that gives you a flavor of the kind of things we would present.

Speaker 8

Yeah, absolutely super helpful. And maybe if I could please ask one follow-up. Will you be taking weight based dosing into phase three or will it be a fixed dose?

Speaker 3

Yeah, so one of the things that we've learned about this drug as an agonist, it's quite important, you know, to dose it very precisely. And so weight based dosing is what we've identified is critical. So our plan is to continue to use weight based dosing. And it's pretty common, you know, there are many, many drugs that are dosed in what you call link bands, you know, so if a person is between weight A and weight B, they get this, you know, they get this SKU or not SKU, for example, Orenzia and other drugs, many other drugs are dosed that way. So we would be using weight based dosing.

Speaker 3

And then our long term goal would be also that we would launch, you know, in an auto injector and maintain that kind of weight based banding as our dose approach.

Speaker 8

Great, thanks so much for taking the question.

Operator

Thank you. Our next question comes from Roger Song from Jefferies. Your line is open.

Speaker 7

Great. Thanks for the update and taking our question. Can you remind us what is the dropout rate for your Phase 1b atopic dermatitis trial? I understand the small hand, but what is the expectation for your phase two? Anything you can tell us on the blinded fashion?

Speaker 7

What is the discontinuation you are seeing? And would you report both ITT and the asthma for the efficacy endpoint?

Speaker 3

Yeah, hey, Roger. Yeah, thanks for the question. So, you know, when we published the results from the phase 1b last year in our nature communications paper, we showed that there was between a thirty and twenty percent dropout rate for placebo and the two dose levels of Respag. And it was actually higher for placebo, thirty percent for placebo, and in the low to mid 20s for the Respeg arms for the low dose and the high dose. So we presented that data, you know, for example, if you consider a study like the lebrikizumab phase two trial, There in that study, when they looked at the overall pooled analysis, I think they had about a twenty eight percent dropout rate.

Speaker 3

It's just another benchmark. And for us, in the case of June, we'll report the, you know, the dropout rates, you know, and we'll report that, for example, patients that discontinued during the induction period, as well as the earlier question, you know, that completed the induction period that either went on to re randomize into maintenance or that went into the escape arm. So stay tuned, it will report all of those results next month.

Speaker 7

Got it, okay. And then in terms of the next step, given the phase two is biologic naive patient population, how would you consider to expand this into post biologics and then in the phase three? Thank you.

Speaker 3

Yeah, so our data is really built upon what we've seen in our own proof of concept study, right? And that's why we ran that phase one in biologic naive patients, and we ran the phase two biologic naive patients. And we would expect to also run our phase three studies in the biologic naive patients. However, during the phase three program, we would also study the drug in biologic experience. And so that would be something that we would do as part of the phase three program.

Speaker 3

Different companies use different approaches, you know, for example, Amgen with the ROKA program combined biologic naive and experienced into the same study, whereas lebrikizumab and emitlimab did separate studies for those populations. So we'll still be either deciding the best approach for us, but we will definitely evaluate both naive and experienced based populations in the phase three program.

Speaker 7

Excellent, just one last quick question in terms of the partnership, would you be considering seeking partnership after Phase two or you will take this Respag into Phase three on your own? Thank you.

Speaker 2

Yeah, this is Howard. That's a very good question, Roger. I think, look, if you look at Nektar's current financial position, we clearly aren't in a position to execute on a full Phase III program without a partner. So I think what we will be doing is looking at the quality and the strength of the data, and we will be talking to companies about collaborating. That doesn't mean we'll be out licensing the drug, no way we will do that.

Speaker 2

But we will be talking to companies and come up with a collaboration that allows the least amount of dilutive financing for our investors, And at the same point allows us to retain a significant portion of ownership of the drug. And there's lots of different ways to do that. But clearly, collaboration is likely the direction we go.

Speaker 7

Excellent. Thank you. That's it from us.

Operator

Thank you. Our next question comes from Mayank Mamtani from B. Riley Securities. Your line is open.

Speaker 9

Yes. Good afternoon. Thanks for taking our questions. JZ, are you able to provide any color on your where your baseline EZ could come at and how much is going from twelve to sixteen weeks in this Phase 2b versus Phase 1b important for that separation from placebo? And is there expectation for all those levels, including the twenty four mg per kg, once every monthly, everything sort of statistically clearing the the stat seg bar and and twenty four, the monthly dose being the lowest therapeutic effective dose.

Speaker 3

Great. Yeah. Thanks, Mayesh. So obviously when we report the top line results, we'll give the detailed baseline easy, but I could tell you that with the kind of prospective actions that we took in the study, you know, such as the geographic footprint, as well as focusing on, you know, experienced dermatologists, board certified derms that have successfully participated sites. We'd like to see our baseline easy rate between twenty five and thirty.

Speaker 3

And we think that when you look across successful studies, whether they're a phase two or phase three, you know, this is a, you know, that's a very good zone to be in. You'll note, of course, our publications, we were a little bit lower than that in our phase one. We were in 22, 20 three range. Again, that was all US sites. So we'd like to see a higher baseline easy get this study.

Speaker 3

And then you asked the other interesting question about the impact of increasing the time of dosing, the overall dose interval. And we do think that that's quite important. So the phase 1B was really informative and it showed us that a twelve week twice a month dosing regimen could definitely deliver quite a lot of efficacy and it could deliver a remitted effect. And I was seeing in the majority of people, but it was also evident that there were people that could have done better with additional dosing. And when you look at that week twelve to week nineteen off drug period, we lost few people at the different dose levels that really had an effect, but then that effect winked.

Speaker 3

So there were clearly people that could have done with additional dosing. So one of the first things that we'll be looking at in this study is the additional extension of the induction period from twelve to sixteen weeks. That also gives more as you described space and the separation from placebo. But then also, you know, beyond that is the fact that we keep dosing in the maintenance period, which is also something that I mentioned we're very excited about because it's possible we haven't really mapped out the extent of efficacy and that would continue treatment through fifty two weeks patients could see even more benefits. We're very excited to see that effect of that additional dosing.

Speaker 3

And then to your last question about the different dose levels. So we gave additional color in the call today, you know, about our expectations about the PK exposure and the kind of AUC that's matched across those dose levels. But also remember, this is a very well powered study. We enrolled 400 patients into this study in order to fill the maintenance arms. Then the benefit of that is that the induction is very well powered.

Speaker 3

So that gives us a very good opportunity and, you know, very good chance to hit significance across multiple dose arms. So thanks for the questions, Mike.

Speaker 9

Great, and if I may squeeze in a alopecia study question, please. Do you have a sense of what proportion of patients between very severe versus severe subgroups And if you could comment on the kinetics of response, you know, relative to a pretty fast onset you get an AD, how, what would your expectation be on the kinetics there? And then I have just one last follow-up after that.

Speaker 3

Sure. So if you just look at the epidemiology, if you look at people that are assault 50 or higher, you'd find between a third and a half are actually in the very severe, which are ninety five and higher, right? And those are also the people that tend to be the candidates for clinical trials as well. So that's just where the epidemiology breaks down in that from a third to a half are in that very severe category, which is defined as ninety five to 100 on the salt scale. And then your other question about onset.

Speaker 3

It's a very interesting question. Physiology in that disease is very different. Like, you know, in atopic dermatitis, you know, you're dealing with effectively an organ that recovers quickly in the skin, Rashes can come and appear and clear quickly as you know, and so can other excoriation, magnification, other features of the disease as well. But hair is its own thing, right? There are different stages of hair growth.

Speaker 3

In patients with alopecia they have an arrest of the hair follicle, so there's inflammation that slows down and it really interrupts the stem cell portion of the disease. And so that's why we actually are doing a thirty six week induction period in that study. And we see that even with JAK inhibitors, right? It can take time, you know, to grow hair. We're doing a longer induction period.

Speaker 3

And in December we look forward, you know, to present the top line results of that study and there we'll be able to characterize not just the magnitude, but also the connects of the response. We'll stay tuned for until December for that.

Speaker 9

Great. And and just one corporate question. Anything you guys can comment on the Lilly litigation? Just update on what next steps are, and if it all respects progression, delay stage development has any impact on potential damages? Thanks again for taking our question.

Speaker 2

Yeah, look, I can't obviously can't go into detail on our litigation. I can only tell you that we strongly believe we've been damaged by Lilly. And we're clearly actively pursuing an aggressive strategy in this legal action. And I think whether Respag is successful or Respag is not successful, I don't think it has really much impact on the damage that they've done us. So, let's watch and wait as we move towards a trial.

Speaker 9

Understood. Thank you.

Operator

Thank you. Our next question comes from Arthur He from H. C. Wainwright. Your line is open.

Speaker 10

Hey, good afternoon, Howard and team. Thanks for taking my question. JZ, you read my mind about by disclosing the dose level for the AA study. And so I'm just wondering, so assuming this Phase IIb starting in the AA turned out to meet your guys' expectations, how should we think about design for when you guys are evaluating the maintenance the in the A patient? Would that follow similar design path as the AD study?

Speaker 3

Yeah, it's a really great question, Arthur. Yeah, thanks for that. So, yeah, one of the things we're going to learn in this phase 2b study is what happens when we stop treatment, right? So in the study design, there's a nine month induction and then the six month, off treatment period. And our hope and desire in designing the study that way was that we could see the same kind of remit of potential in alopecia that we saw in atopic dermatitis in that off drug period there.

Speaker 3

That would be a complete transformational change in this indication. So firstly, there is no biologic approved in this disease and the JAK inhibitors can be effective for people with alopecia. They're kind of difficult drugs to take because you have to take them for so long in this disease and you also have to step up a dose in patients. But then as Howard and I described it, it's very difficult for patients because when you stop taking the JAK inhibitor, the rate of hair loss is quick and you don't have a regrowth or a maintenance of what you grew. So we do think there's a really unique opportunity.

Speaker 3

And again, having the potential of being in a very, very exciting position as a biologic being tested and the potential to be so early into the space as a biologic therapy. The way we would approach a phase three study, we would of course have to see the results of the phase two, where we'd have to learn about the dose ranging that we've done in the phase two study. And then as we look at the off drug period, we would think about what is the appropriate maintenance regimen. Most likely we would treat and approach alopecia the way we approach atopic dermatitis, where there would be an induction period that would be a higher frequency of dosing. And then there would be a maintenance period that would be much lower in frequency.

Speaker 3

That's the most likely what we would see. But of course, we'd have to see the final results of the study to make that final design.

Speaker 10

Thanks, JZ. So just a quick one on the technical side for the study design for the alopecia study. So I noticed that for those patients did not reach SAW score less than 20, they can get an additional sixteen week treatment. Right? So so the those patients also to be followed in an additional twenty four weeks.

Speaker 10

So is that right? Or I mean, for that thing, those patients kind of had the total starting time period would be a little

Speaker 3

bit longer. It's the latter. So for those people, everybody gets twenty four weeks off drug. So even if some people had were improving at the end of week thirty six and had an extension, they would still be followed for twenty four weeks at the end of dosing. You are correct.

Speaker 5

Okay. Gotcha. Yeah. Thanks for taking my question.

Operator

Thank you. Our next question comes from Jessica Fye from JPMorgan. Your line is open.

Speaker 11

Hey, guys, good afternoon. Thanks for taking my question. Is it fair to expect that you would wait for the thirty six week AD data before pursuing an end of phase two meeting with FDA and preparing to initiate a phase three trial? Or is there potentially motivation to meet with the FDA sooner on the back of this upcoming data and get the ball rolling on phase three that much sooner? Thank you.

Speaker 3

Yeah, thanks for the question, Jess. It is the latter. So we don't have to wait for the completion of the maintenance, which would come in the early part of next year before we connect with the FDA on the induction regimen. And so in fact, it is our plan that with the top line data, when it comes next month, we would begin eyeing in end of phase two meeting with that sixteen week induction data being the main substance and substrate, as well as the driver of the phase three study design that we would take forward. So yeah, actually we would, you don't need to wait and our goal would be to really to keep the momentum, you know, on program.

Speaker 3

So if the study gives us the kind of results, you know, that we think it can, our intention would be to move quickly, maintain the momentum. And I phase three moving into that phase three program as quickly as we can.

Speaker 11

Great. Thank you.

Operator

Thank you. Our next question comes from Andy Hsieh from William Blair. Your line is open.

Speaker 3

Thanks for taking our questions. So, two for me. I'm just curious for the protocol for atopic dermatitis, do you allow patients to be off the drug but still on the trial? The reason why I'm asking this question is perhaps for the first look you can potentially get a glimpse into potential remitted effect like you said, JZ, for those patients who are off drug but still on trial. So that's question number one.

Speaker 3

Question number two is for the primary endpoint, I'm curious about which imputation method you're using. I think this is going back to Roger's question before, but I also have the same question. Thank you. Okay, sure. Yeah, so in terms of your first question, so like any other protocol, right?

Speaker 3

There are rules for either stopping the study or stopping the treatment, right? And then there are, you know, if you fall into one of those categories, like any other protocols, you still keep the patients in the study. They've continued to have follow-up visits, not just an end of study, but even after an end of treatment, they could continue to be followed. And so our protocol is no different than any others and it does allow that. And again, like, so yeah, so that's something that is allowed in our protocol.

Speaker 3

And then the second question that you asked was about imputation. And so yeah, the kind of imputation methods that are used are typical of phase two studies, right? So the FDA likes you to use an estimate approach, right? When you report this kind of data. So there events called intercurrent events.

Speaker 3

And again, they're well defined and the FDA gives the guidance to all sponsors when you have a study of phase two size. So we'd be using a primary estimate analysis and again, the routine kind of imputation methods that are typical of other studies. When we present the results, we'll get into the details, you know, the methodology so you can see that before you see the protocol for example when we publish the study results, but that I hope that gives you the kind of flavor. It's a standard imputation and primary estimate analysis. Yeah, that's helpful.

Speaker 3

Thank you, Jay

Speaker 7

Z. Thank

Operator

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

Speaker 2

Well, thank you all for joining us today. And we greatly appreciate your continued support. And I want to thank all of our employees for their hard work and diligence. And I look forward to sharing our ResVeg data in June. So please stay tuned.

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

  • Respeg (NKTR-358) is in a 400-patient Phase 2b atopic dermatitis trial (Resolve AD), with top-line 16-week induction results due June 2025 and a 36-week maintenance period to define the Phase 3 dose and regimen.
  • The Phase 2b alopecia areata study in 90 severe patients evaluates two Respeg dose levels over 36 weeks plus off-therapy follow-up to assess durable remission, with top-line data expected December 2025.
  • A new TrialNet-sponsored proof-of-concept trial in recent-onset Type 1 diabetes will start later this year to test Respeg’s potential to preserve insulin-producing β-cells.
  • Early-stage pipeline progress includes IND-enabling studies for the TNFR2 agonist antibody NKTR-165 (on track for 2025 filing), preclinical work on bispecific NKTR-166, and IL-15 oncology agent NKTR-255 data at EHA supporting post-CAR T cell therapy use.
  • The company ended Q1 with $220.7 M in cash, expects a cash runway into Q4 2026 (≈$100 M end-2025), Q1 revenue of $10.5 M, and full-year R&D and G&A spends of $110-120 M and $60-65 M, respectively.
A.I. generated. May contain errors.
Earnings Conference Call
Nektar Therapeutics Q1 2025
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