NKTR - NASDAQ

Good day and thank you for standing by. Welcome to the Nektar Therapeutics First Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Vivian Wu. Please go ahead.

Thank you, Crystal and good afternoon everyone. Thank you for joining us today. With us on the call are Howard Robin, our President and CEO; Dr. Jonathan

Thank you, Vivian, and thank you all for joining us today. As you know, a few weeks ago, we announced our plans to implement a new strategic plan and cost restructuring at Nektar. And I’m pleased to report today that we enacted the plan quickly and that we will begin to see ongoing expense savings starting in the third quarter of this year. The new plan focuses our company more clearly on immunology and importantly, also extends our cash runway through at least the middle of 2026. A core element of our new pipeline focus and plan is on the advancement of RE

Thanks, Howard. Starting with RE

Thank you, J

Thank you. [Operator Instructions] Our first question will come from Chris Shibutani from Goldman Sachs.

Hi, good afternoon, everyone. This is Charlie on for Chris. Thank you so much for taking my questions. I understand the excitement for having RE

Yes. Good. This is Howard. Good question. At this point, I have no plans to partner with anybody else. This is Nektar’s program. I think it’s a great opportunity for us to see this through to completion. I do see from the data that we should be able to complete a Phase 2b trial in atopic dermatitis with success. And it will be the first mechanism of its kind and, I think, set the stage for a new way to treat autoimmune disease. So for now, it’s our drug. I hope that answers it.

No, that’s very helpful. Thank you. And then just quickly, if we think about the timeline for the Phase 2b in atopic dermatitis that has kind of played out just now, should we be expecting those data to maybe be like a mid-2024 sort of time line?

Yes. Look, we’re going to – look, we’re going to start that study as soon as we can. It’s going to take a few more months to finalize the design and get sites set up. I would say that you’re looking at somewhere in the range of 14 to 18 months to complete that study from the time we start. So as soon as we start it, we’ll give everybody a more thorough update.

Okay. Great. Thank you so much for taking our questions.

Thank you. Our next question comes from Jerry Gong from Mizuho. Your line is open.

Hi, this is Jerry Gong for Mara Goldstein. Thanks for taking our questions. Just two quick ones from us. For the Phase 2b study in atopic dermatitis, are you planning to conducting differential analysis for different patients with probably DUPIXENT, JAK, other cytokine use? And one quick one on NKTR-255. Can you give any color on the type of partnership that I can look for? Like would a Lilly type of deal be interesting?

Well, okay, let me take the second half first, and then I’ll give it over to J

Okay and hey Jerry. This is J

Super helpful. Thanks for the answers.

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

Hey. Good afternoon. This is JL for Jess. So, a couple of questions from us. First of all, for your kind of strategic decision to partner on 255, just wondering is this something new after you kind of regain the full right of RE

Okay. Good. Very good questions. Look, we were – look, when we have been working – as an immunology company, an immunology company, of course 255 was an important component of our portfolio, and I still think NKTR-255, IL-15 has an important role in immuno-oncology. That said, we need to focus and we need to focus where the opportunities are the largest and the opportunities to have a novel mechanism are available to us, and that’s RE

Thank you. And our next question will come from Greg Harrison from Bank of America. Your line is open.

Hi there. This is Mary Dryden on for Greg. Thank you so much for taking our questions. I guess in terms of the RE

Okay. Those are good questions. I will turn that over to J

Yes. Thanks Howard. Yes. Thank you for the question. So, the agency, of course has seen the totality of all of the studies that have been put forward so far. And that includes the Phase 1b study in atopic dermatitis or of course, there was feedback on the protocol and multiple discussions with the FDA on that study. In terms of the Phase 2b study, as I mentioned earlier, so we are finalizing that study protocol. And we will be seeking health authority feedback on that protocol very, very soon. So, then we will get that additional kind of information that will allow us to finalize the protocol and start the study later this year. In terms of the scope of indications, so far, RE

Alright. Thank you so much.

[Operator Instructions] And our next question will come from Daina Graybosch from SVB Securities. Your line is open.

Hi. Thank you for the question. I would like to understand how you are thinking about the therapeutic window for RE

Well, I will turn that over to J

Yes. Thanks Daina for the question. We have seen with even low-dose IL-2, and I know you are familiar with the literature, that across different disease indications, low-dose IL-2 has a different kind of performance. And there is different kinds of sensitivity of the underlying immune dysfunction and how low-dose IL-2 works. One of the things that we learned from the study in lupus patients, right, is that the high dose, which we have studied before in multiple settings, from healthy volunteers to patients with mild lupus to patients with psoriasis to patients with atopic dermatitis and patients with ulcerative colitis, we really didn’t see systemic toxicities and issues with that dose level in those other patient populations. But in the moderate to severe lupus patients, we found more intolerability in that setting. So, one of the hypotheses that we have is really related to the nature of the disease. In the lupus patients, you have much more of a systemic Th1 disease, whereas in atopic dermatitis, it’s different. It’s a Th2 kind of disease. So, even though the same dose level was studied in both patient populations, we definitely saw very different profiles, both in terms of efficacy at that dose level as well as tolerability. One of the things that gives us comfort moving forward in the atopic dermatitis Phase 2b study is that we have already studied that same dose level at 24 micrograms per kilogram in the Phase 1b, which is essentially analogous to the 1,800-microgram flat dose. We have already studied that dose level in the Phase 1b study. And looking at the efficacy profile, relative to the tolerability profile, it looks like a very reasonable and encouraging, if not positive, kind of a risk benefit profile from that small study. So, we are comfortable continuing using that dose level in patients with atopic dermatitis. And so it’s really a patient population and disease indication difference. It’s really not uncommon for many, many drugs.

Alright. Thank you.

Thank you. And our next question will come from Boris Peaker from TD Cowen. Your line is open.

Hi. This is Hans for Boris Peaker. Thanks for taking our questions. I have one for RE

Okay. Good. Certainly a good question and pretty reasonable. Look, Lilly has other priorities in atopic dermatitis. And when we took the RE

Thank you. That’s very helpful. My second question is just a general question. As your company now shifting to immunology folks to biotech, so what have you done in terms of your organization that you, expertise-wise, what have you done to make it possible or a successful transition?

Okay. Since J

Yes. So, through the years, we have been bringing in staff with expertise in both drug discovery and drug development in immunology indications. So, we have been actually bringing that in. And then when we have areas of either capability or another gap, then obviously we get help like others do from outside experts that help us reinforce some of our decision-making and thoughts. Besides that, collectively, within the team that’s been developing the pipeline, there are many, many years of experience in working in the immunology fields across multiple diseases, multiple kinds of immunology settings. And that’s across many companies and particularly in large pharma, where there was a lot of expertise there in the company. Thanks.

Thank you.

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

Great. Thank you everyone for joining us today. And again, I want to thank our employees for their commitment and focus through some of these difficult and challenging times, which we all seem to be having in biotech these days. We look forward to sharing our progress in the development of RE