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Hello, and thank you for standing by. Welcome to the Nektar Therapeutics Third Quarter 2025 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 Vivian Wu from Nektar Investor Relations to kick things off. Please go ahead.

Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. Today, you will hear from Howard Robin, our President and Chief Executive Officer; Dr. Jonathan

Thank you, Vivian, and good afternoon, everyone. Before I start with remarks for the quarter, I'd like to take a minute to welcome Dr. Mary Tagliaferri back to the company, who has recently rejoined us as Chief Medical Officer after a need to step away for personal reasons earlier this year. Mary was instrumental in the design and execution of our successful Phase II program in atopic dermatitis, and we are so fortunate that she has now rejoined us as we prepare for the initiation of the Phase III program next year. I'd also like to thank Brian Kotzin for his help serving as the Interim CMO during the period. Brian has worked with us for nearly 10 years, and we are grateful that he will continue to serve as a medical consultant. This quarter and year-to-date, we've remained laser-focused on pursuing regulatory T cell science across our pipeline and preparing to advance our lead program, rezpegaldesleukin, also known as RE

Thanks, Howard, and thank you, everyone, on the call for joining us today. To begin, I'll remind you that earlier this year, the RESOLVE-AD Phase IIb results demonstrated the promise of Nektar's novel approach to the IL-2 pathway. The global study randomized 393 patients with moderate to severe atopic dermatitis to receive subcutaneous treatment with 3 doses of RE

Thank you, J

[Operator Instructions] Our first question will come from Yasmeen Rahimi from Piper Sandler.

Congrats on a great quarter. This is [ Dominic ] on for Yasmeen Rahimi. We just had a quick question on the upcoming ACAAI data that will be presented. Could you help us understand what you hope to report presentation in patients with AD and asthma? And then moving forward, how would you expect this data to, I guess, impact development in asthma?

Well, let me -- I'll have J

Sure. Yes. Thanks for the question, Dominic. So at the ACAAI presentation, we are presenting the results of a preplanned exploratory analysis that was included in the study. There's a validated questionnaire instrument that it's like a patient-reported outcome around -- it's ACQ-5, which stands for the asthma control questionnaire. And with that, you can assess the comorbidity symptoms of asthma in patients that have both atopic dermatitis as well as asthma. And that allows you to look at the total sort of improvement in the ACQ-5 scores over time. But it also lets you isolate on patients that have more severe, for example, uncontrolled asthma at baseline, and that's a subset of people that have higher scores on ACQ-5 at baseline. For us, this is really interesting because like we discussed, roughly 25% of patients have that, so roughly 100 people in our study also had asthma in addition to atopic dermatitis. And this allows us to assess the effect of RE

Our next question will come from Julian Harrison from BTIG.

Congrats on all the recent progress. It looks like you've had a few months now to socialize with the medical community, the initial RESOLVE-AD results and RE

Julian, I'll take the first part of the question. Look, clearly, this mechanism, Treg mechanism has received a lot of attention, especially in the Novo Prize in physiology or medicine. And I think given this very strong data we have in atopic dermatitis and the cross -- the rescue data or the escape arm data, I should say, where patients who failed to see any response on placebo did exceptionally well when they were crossed over to drug. I think that's incredibly compelling data and we're very proud of that. The combination of that data with what we now see in the comorbidity of asthma, I think, sets apart RE

Yes. Thanks, Howard, and Julian. And so I mean, in the context of the benchmarks, I think what's really important is that RE

Our next question will come from Jay Olson from [ OpCo ]

This is [ Cheng ] on the line for Jay. Congrats on the progress. Maybe speaking to the AA, I'm just wondering how fast you can maybe start the Phase III program? And are you planning to move the program by yourself or in a partnership if the December data is positive? And separately, I'm also wondering, in the Phase IIb AD study, are there any patients have alopecia areata comorbidities? And if so, any color you can share on those patients?

Well, I think I got -- I think the first part of your question, I didn't hear it all clearly. But I think the first part of your question -- I'll let J

Yes. Thanks, [ Cheng ]. So we did look at multiple comorbidities in the atopic dermatitis Phase IIb study. Asthma was by far the largest patient population, as I mentioned, roughly 100 people had both atopic dermatitis and asthma in that study, and they'll be presented at ACAAI this weekend. In terms of alopecia, we also looked at vitiligo, for example, very, very few people. So really not a large enough patient population to isolate out as a subgroup, like a handful of few people in alopecia that had both of the diseases. Obviously, our Phase IIb results in alopecia, which read out next month, I mean, that is by far a more definitive data set, right? Much, much larger sample size, obviously, a patient population enrolled with that as their primary disease. And then, of course, we'll be looking at the treatment effect in that patient population reported next month.

Our next question comes from Cha Cha Yang from Jefferies.

This is Cha Cha on for Roger Song. I was wondering in addition to low-dose Olumiant, are there any therapeutics that are in development, biologics for alopecia that you think would be an appropriate benchmark? And then my second question is, are there any IL-2 specific studies that you think could provide read-through to RE

J

Sure. So yes, there are a couple of biologics in development for alopecia. And we discussed them like an IL-7 receptor and other kinds of agents. So I think that those -- there are some earlier data sets. Our goal is we were doing a much, much larger study than those earlier programs. As we described, 94 people were enrolled and randomized in the Phase IIb alopecia study that we're doing. We also have multiple doses. So a much larger study that gives a chance to really assess the treatment effect, which I think is going to be more informative than a lot of the single arm or much, much smaller studies that have been done to date. But it's certainly an area that people are exploring. Tregs remain a very important mechanism that is invoked from all a lot of translational studies in patients with alopecia areata. We know that there are low levels and deficiencies in Treg function. We also know Tregs are necessary for hair growth and for hair moving through the hair growth cycle. And the actual antigen phase that actually is associated with the elongation of the hair once it attaches down at the root actually requires Treg signaling to the stem cell compartment. So we know that those are multiple key mechanisms. And those are one of the big reasons why we're so excited in conducting the study that we'll be reading out the top line data for next month. And then in terms of IL-2 specific studies, there have only been a few studies that have been published with IL-2. One was a case study and one was a small randomized study. The main situation is low-dose IL-2 is really not a good proxy for RE

Our next question will come from Mayank Mamtani from B. Riley Securities.

Congrats on a productive quarter. On the alopecia top line data analysis, would you have any off-treatment responder rate you plan to report on given some patients may have been past that 36-week treatment period? And if you could remind us if there's an escape arm option here for the placebo non-responders to cross over. Obviously, wonder from your AtD experience, the peak efficacy from the EADV data, you didn't get until 24, 48 -- 44 weeks even. So I just wonder what's your plan to assess if efficacy increases beyond that 36-week period, what's the kind of plan there? And then I have a quick follow-up.

Sure. Yes. So firstly, in the kind of information that we would present in December, we'll be presenting data from the 36-week induction period in the study. The primary endpoint is the mean percent reduction in SALT score from baseline. And then the key secondary endpoints that are really, really meaningful is the proportion of people that achieved the SALT 20 and also SALT 10. SALT 20 is the registrational endpoint in the U.S. and SALT 10 in Europe. And then I mentioned earlier in the presentation, also the additional secondary endpoints, some of the time-dependent endpoints and some of the proportional increases in the kind of hair regrowth, right, as metrics. And then the other thing that kind of round out the baseline demographics, the safety profile, all the other things. But importantly, Mayank, right, the study is still going to be ongoing. So as you know, the way we designed the study is people that reached week 36 that are experiencing benefits such as hair regrowth, for example, but that have not yet reached a SALT 20 metric, they have the opportunity to take an additional 16 weeks of treatment to 52 weeks for a full year. So there's a proportion of people that will be ongoing. And also the study design has a 24-week off-drug observation period. So whenever a patient completes treatment, whether that's at 9 months or 12 months, there is then followed for that additional 24-week period of time. And that's really designed to assess that if you grew hair, can you keep hair, right, which is a significant differentiating element from a JAK mechanism of action where the hair loss is really, really rapid when the drug dosing is stopped. So because the study is still ongoing, I mean, we can't say yet the totality. But definitely, the 36-week endpoint, which is the primary analysis with the entire population crossing the 36-week is going to be the main subject of that top line presentation.

Escape arm, is there an escape arm here?

No, there's no escape arm in the study.

Okay. And on the auto-injector development, how far along are you? And is that going to be at the start of your Phase III study? And is that kind of part of the protocol as you get into the end of Phase II discussion?

Sure. Yes. So the auto-injector development is ongoing. And our goal and plan is to have the auto-injector available at the time of launch of RE

Our next question will come from Arthur He from H.C. Wainwright.

Sorry, I apologize if the question has been asked before. So given the readout coming readout for the alopecia, J

Yes, it's a great question. I mean I think that one of the situations with the JAK inhibitors, and we touched a little bit on this earlier, is that they definitely are effective at reducing inflammation. Like if you have common gamma chain uses in multiple cytokines, use any either homo or heterodimers of JAKs. And it's an important part of the signaling cascade in response to multiple cytokines, and they're well known as effective ways of lowering inflammation quite quickly. But the challenge with using a JAK inhibitor in any indication where it's approved is that long-term use carries with it some disadvantages, right? So the drugs have black box warnings. They have other significant limitations. They require monitoring. There's just a number of things that make them a little bit more delicate to use. And in the dermatological setting, some of those things are a little bit undesirable. So one of the things that RE

So another question is given that you've passed in the data there, how should we think about the primary endpoint for the approval there in the future? Do you think the SALT 20 is still could do the job? Or we probably should look to the SALT 10 or even SALT 0 there for the future drug for the alopecia there?

Yes. Well, I mean, the health authority set the registrational endpoints, right? And so right now, those are defined, right, as SALT 20 in the U.S. and SALT 10 in Europe. But obviously, every study measures multiple secondaries, right, including eyelash, including SALT 0 and so on. So I think that we leave that in the hands of the regulators. In terms of UPA's efficacy, I mean, it's -- I think everywhere that there are multiple JAK inhibitors approved, UPA or RINVOQ seems to always win, right? It just consistently produces the greatest amount of efficacy compared when it goes head-to-head against other agents. And I think we've seen that in multiple indications, Arthur, right, not just in dose 1. It does carry with it a little bit more of a safety profile, which is the [ take ] related, right? It's more on target and more on-target tox in addition to other things. But I do think as compared to the other JAK inhibitors, that UPA is going to be very important, probably take a significant position against the other JAK inhibitors. But we don't really see that as impacting the biologics, right? Again, there are numerous indications where biologics and small molecules, JAKs and non-JAKs coexist. Atopic dermatitis is a great example. In psoriasis, you have TYK2 mechanism coexisting and others. And there's really a large enough patient share and the need for multiple mechanisms that always makes plenty of room for multiple mechanisms in this indication.

And we do have time for one last question. And our last question will come from Andy Hsieh from William Blair.

Mary, it's great to have you back. So we have 2 questions. So for the RESOLVE-AD study, I believe you spent a lot of time and resources to ensure that the placebo rate is low. So have you gotten a chance to review that initiative so that you can be best positioned for the positive Phase III outcome? And then the second question, maybe for Howard, what's your current manufacturing footprint? I figured given the intense interest in RE

I'll take the second part first, and Mary can continue. Look, we are looking at a number of different options there. We sold our PEGylation manufacturing facility to Gannet BioChem, but we have a priority position there, and we certainly have a guaranteed source of those raw materials. And we have a number of different contract manufacturing companies, very well-known companies that we work with. So I'm not concerned about at this point, the ability to manufacture -- successfully manufacture RE

Thanks, Howard. And really great to hear your voice, too, Andy, and I'm really happy to be back. I mean, as you said, the data from RESOLVE-AD are very exciting. And I've also had the opportunity to speak to multiple dermatologists since I've been back, who are also very excited about the totality of the data, the speed of onset and the excellent safety profile. So it's very exciting to move this forward. And certainly, in our Phase III program, we have every plan to implement the exact same procedures that we did to minimize the placebo effect. And some of those are, of course, ensuring that we have board-certified dermatologists participating in our clinical trials. We also make sure that the eligibility criteria is met both in the screening and right before patients are randomized. And so we took multiple actions. Also in our Phase IIb, we had a quite large size of our placebo group, and we will, of course, have the same when we proceed forward in a larger Phase III study. So we were very pleased that we were able to implement multiple different procedures and activities in order to ensure our placebo effect was very low, and we believe we will continue to be very successful in our Phase III as well. So we look forward to moving forward. We've been doing a lot of planning. We're going to have our end of Phase II meeting with the FDA by the end of this year, and so we'll have a clear path forward to a BLA.

And this does conclude our question-and-answer session for today's conference. I'd like to turn the call back over to Howard Robin for any closing remarks.

Well, thank you, Crystal, and thank you, everyone, for joining us today, and we greatly appreciate your continued support. And I want to thank all of the patients and their caregivers that have trusted and continue to trust Nektar to treat their disease. None of this research would be possible without them. And I also want to thank our employees for their dedication and extremely hard work, and we look forward to delivering data from our RE