Good day, and thank you for standing by. Welcome to the Nektar Therapeutics first quarter 2023 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. 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 Zalevsky, our Chief of Research and Development, Dr. Mary Tagliaferri, our Chief Medical Officer, and Sandra Gardiner, our Acting Chief Financial Officer. 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 in research programs, the timing of the initiation of clinical studies, and the availability of clinical data for our drug candidates, the timing and plans for future clinical data presentations, the formation, future development plans or success of our collaboration arrangements, the expectations following our corporate restructuring and reorganization, financial guidance, and certain other statements regarding the future of our business. Forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict and 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-K that was filed on February 28th, 2023, 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 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? 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 3rd 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 REZPEG, and we intend to move quickly to initiate a well-powered, randomized phase IIB study for REZPEG in patients with atopic dermatitis. We were incredibly pleased to have regained the rights to this first-in-class regulatory T-cell program from Lilly. Importantly, there are no royalties owed to Lilly for this transfer, REZPEG now becomes a wholly owned asset of Nektar's. Atopic dermatitis as a target indication for REZPEG is attractive to us for several reasons, not the least of which is the strength of the data that has been generated for REZPEG in patients with atopic dermatitis. The non-topical biologic treatment landscape is significantly growing. The approvals of Dupixent and other IL-13-based biologics have driven this growth. In the U.S. alone, approximately 16 million people are living with atopic dermatitis, with three out of four of these affected by moderate to severe disease. In 2021, biologic sales for atopic dermatitis were close to $5 billion, and sales continue to grow. That being said, atopic dermatitis is a disease area where there is still a very high unmet need for novel biologic treatment options. Most notably, the mechanisms available to patients today after they fail topical treatments overlap and fall into either the category of IL-13 based mechanisms or JAK inhibitors. Both mechanisms have limitations on efficacy, both have some notable safety challenges, which include black box warnings with the JAK inhibitor class. Even with the growth in the adoption of these mechanisms, at least 50% of patients don't respond to these therapies at all, and many patients see a rebound in their disease after coming off these therapies. This opens a real opportunity for REZPEG to be introduced as the first regulatory T-cell mechanism that is differentiated from these overlapping existing mechanisms. The phase IB data for REZPEG was compelling and set the stage for us to measure the potential for REZPEG to be a remitter therapy with longer-term disease control and less frequent maintenance dosing. JZ will review the data reported for REZPEG in a few minutes, including the quality and durability of responses we saw in patients. As we mentioned in our reprioritization plan with the focus on immunology, we'll also continue the development of our IL-15 program, NKTR-255, in cancer while we explore strategic partnership options. NKTR-255 is being developed in combination with cell therapies, and we believe it could be a valuable adjuvant therapy for companies focused in the area of cell therapy. Our phase II study of NKTR-255 in combination with approved cell therapies, Breyanzi and YESCARTA, as well as the phase II JAVELIN Bladder Medley study with Merck KGaA, will continue while we seek a development partner. We continue to see great value in NKTR-255, and early data showed its promise as a potentiator of cell therapies that could benefit patients suffering from very difficult-to-treat cancers. Our goal is to find a strategic co-development partner this year. As I stated earlier, our primary focus is on immunology, and to that end, we have two preclinical candidates advancing, a TNFR2 antibody program and a PEG-CSF1 program, which JZ will discuss in a moment. Our goal is to have an IND ready in 2024 for at least one of these programs. We're deeply grateful to our employees for their commitment and dedication to Nektar and the patients we aim to serve. The decisions over the past month to further reduce our headcount have been difficult, but we believe these are the right decisions to maximize the success of REZPEG and our immunology programs. We're confident that our focus on immunology is the best path forward to bring important potential therapies to patients and to create value for our shareholders. Now I'll pass the call to J.Z. to review the programs in more detail. Thanks, Howard. Starting with REZPEG, this is a unique molecule that has shown promising efficacy in multiple clinical trials as a single agent. Our goal with this program is to address the underlying Treg deficiencies and consequent overactivity of effector T cells in these diseases by selectively activating and expanding Tregs. REZPEG is uniquely positioned as the most advanced IL-2-based Treg mechanism in the clinic, with opportunity and potential in a number of autoimmune disease indications. Howard touched on one of these indications, atopic dermatitis. Management of atopic dermatitis has a few main goals. The first goal is the rapid and efficacious treatment of the acute phase of the flare. Second is the far more challenging control of the chronic disease in the long term. Given that most patients with moderate to severe disease need medication for many years, the safety profile is also critically important. The current treatment landscape for patients with moderate to severe disease that require systemic therapy has two major classes of medicines currently approved for standard of care. One class of these target key cytokines that drive the TH2 inflammation pathway. The flagship in this class is Dupixent or dupilumab, which blocks the IL-4 and IL-13 pathways. L ebrikizumab, which is expecting approval later this year, and the recently approved Adbry, both target and block IL-13 only. While Dupixent is a very successful drug, there is now real-world data that describes some of its limitations. 1 real-world evidence study showed the lack of durable efficacy in that 79% of patients that discontinued Dupixent lost disease control after an average of 4 months and needed to restart therapy. Another real-world study showed that 27% of patients taking Dupixent developed moderate to severe conjunctivitis, requiring treatment with anti-inflammatory eye drops or ointments. The other major class of therapies for atopic dermatitis are the JAK inhibitors. These interfere with T cell activation and thus suppress inflammation in the dermis. JAK inhibitors show impressive efficacy in atopic dermatitis, but they carry multiple black box warnings, making them less attractive for chronic use. Because the JAK inhibitors are associated with these multiple safety risks, the FDA has only granted a label for the JAK inhibitors in patients whose disease is not adequately controlled with other systemic drug products, including biologics. In the clinic, because of the black box warnings, dermatologists acknowledge that JAK inhibitors are not suited for many of their patients, including individuals greater than 65 years old or those with the comorbidities associated with the black box warning. Like Dupixent, patients that discontinue JAK inhibitors also quickly lose disease control and relapse. Unlike IL-13 blockers and JAK inhibitors, which both block their respective pathways, REZPEG is designed to target the IL-2 receptor complex and stimulate the expansion and function of Treg cells. These in turn suppress the harmful T cells that are driving the underlying pathology of atopic dermatitis. REZPEG aims to restore homeostasis in the immune system through the proliferation of Treg cells rather than just blocking effector cells. Consequently, REZPEG provides a completely different mechanism of action compared to the other drugs that are currently approved or under development in the atopic dermatitis space. The phase Ib data from our first initial proof of concept study in moderate to severe atopic dermatitis reinforces our conviction in REZPEG. The 12-week phase Ib study conducted by Lilly tested two doses of REZPEG compared to placebo, and then followed patients for 36 additional weeks after the last dose of therapy. Last September, we presented the interim data from this trial. REZPEG demonstrated a dose-dependent reduction in Eczema Area and Severity Index scores in patients, also known as the EASI score, with approximately a 70% reduction in scores at week 12 at the highest dose tested. We also saw a dose-dependent improvement in the Investigator Global Assessment for Atopic Dermatitis and itch responder rates through week 12 of treatment. Consistent with the REZPEG mechanism of action, total Tregs and CD25 bright Tregs increased versus placebo through week 12. The efficacy observed at 12 weeks of treatment with REZPEG is in line with efficacy observed after 16 weeks of treatment with Dupixent. Clearly, the most fascinating observation from the study was that when we looked at patients 36 weeks after we stopped dosing REZPEG, their skin scores and other measurements of disease activity remained very low. This is an effect that is not observed with Dupixent. This has us and KOLs very enthusiastic about the potential for long-lasting responses and infrequent maintenance dosing with REZPEG in the setting of atopic dermatitis. We have now received the final data for this study from Eli Lilly, and the study results positively extend the interim results previously reported. In addition, these data include additional efficacy endpoints that were not covered in last year's EADV presentation. To briefly touch on some of these, we observed a dose-dependent decrease in the percentage of body surface area involvement of atopic dermatitis, also known as BSA, in patients treated with REZPEG, with patients at the highest dose level reaching a 72% reduction in BSA at week 12. As a reminder, BSA is a continuous measurement that correlates with EASI. We also observed dose-dependent reductions in two patient-reported outcome measures: the Dermatology Life Quality Index, also known as DLQI, and the Patient-Oriented Eczema Measure, or POEM. In addition, the final data set has data from more patients completing the 36-week observation period. We are very excited about the data obtained in this study. REZPEG showed efficacy across all measures of physician-reported disease activity and patient-reported outcomes, and these effects were durable and maintained after patients stopped REZPEG administrations at week 12. We look forward to beginning in the coming months. When we developed REZPEG at Nektar, our hypothesis was that restoring Treg populations in patients with autoimmune disease would restore the normal balance of the immune system and potentially provide a disease-modifying therapy. We are excited to see the long duration of sustained response observed in the atopic dermatitis study consistent with this hypothesis. These collected data demonstrate REZPEG's potential as a remittive therapy and support the quick advancement of REZPEG to move into a phase IIB study in atopic dermatitis later this year. We are now finalizing the phase IIB study, which will be an industry standard phase II study designed similarly to phase II work conducted for approved IL-13 and other agents. This will allow us to evaluate multiple dose regimens of REZPEG in the 16-week induction period, followed by a 28-week maintenance period. We believe this study design will enable data to be better compared to prior phase II studies at a 16-week primary endpoint readout at the end of the induction period. We have assembled a scientific steering committee for this trial. We are pleased to announce that Dr. Jonathan Silverberg from the George Washington University School of Medicine and Health Sciences will be the chair of this committee. We are truly excited for REZPEG's potential as a first-in-class Treg stimulator, and we look forward to initiating this phase IIB study in patients with moderate to severe atopic dermatitis this year. The phase II top-line data reported in lupus earlier this year also demonstrated clinically meaningful improvements as compared to placebo across key secondary endpoints, including BICLA and LLDAS at the mid-dose level. Since we reported the data, we have had time to meet with many thought leaders in the field of lupus. Their reaction to our study results has been positive and provided us with many insights. In their feedback, the thought leaders focused on REZPEG's rapid onset of BICLA and LLDAS response, as well as the magnitude of the effect on these endpoints that was observed. There is agreement that the phase IIB data provide ample evidence to design a phase III registrational study around these approvable endpoints. While we remain very interested in lupus, to be clear, we are prioritizing first the phase IIB study in atopic dermatitis because it will allow us to rapidly reach a definitive result in a randomized study. We may have the opportunity to revisit a development strategy in lupus once we get the results from this atopic dermatitis study. We are extremely excited about REZPEG now being a wholly owned component of our pipeline. While our near-term focus is on atopic dermatitis, we continue to believe that REZPEG has broad potential in multiple indications. As development of this program progresses, we will continue to evaluate further opportunities and indications for REZPEG. Moving to NKTR-255. We are evaluating strategic partnership options for the asset while we continue our Nektar-sponsored phase II study of NKTR-255 in combination with cell therapies and the phase II JAVELIN Bladder Medley study with our partner Merck KGaA. NKTR-255 is an agent that engages the full biology of the IL-15 pathway to provide functional activation and homeostatic control of IL-15 responses of immune cells, namely natural killer cells, CD8 T cells, and immune memory subsets. As a full agonist of the IL-15 pathway, it can signal through both cis and trans presentation of the trimeric IL-15 receptor complex. NKTR-255 can be combined with multiple mechanisms ranging from targeted therapies to cell therapies, including CAR-Ts and even TCR therapies and checkpoint inhibitors to potentially improve the efficacy of these agents. While we continue to see great value in this program, with NKTR-255 showing broad potential applicability across oncology indications, we believe prioritizing our immunology programs provides a great opportunity to create value for our shareholders. We believe further development of NKTR-255 with a strategic partner is therefore the best path forward for our program, and our goal is to find a partner this year. With this reprioritization, the NKTR-255 studies in combination with DARZALEX FASPRO and multiple myeloma and in combination with cetuximab in solid tumors are wrapping up as we prioritize the cell therapy and bladder cancer studies. Turning to our preclinical research program. We are advancing our research pipeline with a focus on autoimmune disease. The first program we are working on is our new PEG-CSF1, also known as CSF1 program. PEG-CSF1 is a polyethylene glycol, or PEG modified version of the CSF1 protein. This molecule was engineered to optimize the receptor interaction and the exposure to selectively modulate the resolution processes of inflammation. We believe this program has applications in a number of therapeutic indications, including acute and chronic inflammation as well as fibrosis. We are excited to be ramping up the program. Our second preclinical program is our TNFR2 agonist antibody being developed in collaboration with BioLojic Design. TNFR2 is highly expressed on Tregs, neuronal cells, and endothelial cells. TNFR2 agonism has been shown to potentiate the suppressive effect and overall functional properties of Tregs. Its absence is associated with CNS autoimmunity, its presence has been associated with protective effects for neuronal cells as well as other cell populations and tissues in the body. The lead antibodies we have identified show selective Treg binding and signaling, which enables them to be developed specifically for autoimmune disease. We are very excited about this program and its potential to suppress inflammation and promote immune resolution. We plan to file an IND for at least one of these programs in 2024 and look forward to keeping you updated on our progress as these programs mature. With that, I will turn the call over to Sandy for a review of our cost restructuring plan and financial guidance. Thank you, JZ. Good afternoon, everyone. I'd like to first outline the actions we are taking currently in the second quarter as part of our cost restructuring plan to reduce operating expenses. I will provide 2023 financial guidance. We ended the first quarter with approximately $457 million in cash and investments with no debt on our balance sheet. As we announced in April, we have reduced our San Francisco-based workforce by approximately 60%. Costs related to the restructuring will be paid by the end of June in the second quarter. We now have approximately 55 employees based in San Francisco going forward. On an annual run rate basis, the reduction to personnel represents approximately $30 million a year in operating expense reductions. We will have quarterly savings beginning in the 3rd quarter of 2023, and we expect to fully realize these annual savings in 2024. With these reductions in annual operating expenses, as Howard stated, our plan allows for Nektar to have a cash runway through at least the middle of 2026 with our existing cash on hand. Any cash brought in from partnering or other strategic activities would further extend this runway and bolster the balance sheet. Before I move on to 2023 financial guidance, I will note a few non-cash items that were recorded during the 1st quarter of 2023. First, we recorded a one-time non-cash charge of $76.5 million to impair the goodwill that was previously recorded on our balance sheet, primarily from two acquisitions made over 17 years ago, the 2001 acquisition of Shearwater Corporation and the 2005 acquisition of Aerogen. In Q1, we also recorded a $13.2 million non-cash impairment, primarily for leased assets. These aggregate non-cash impairment charges of $89.7 million contributed $0.48 to our net loss per share in Q1 2023. Excluding these non-cash impairment charges, net loss on a non-GAAP basis for the first quarter of 2023 was $47.3 million or $0.25 basic and diluted loss per share. I'll now review our 2023 financial guidance. We expect to end 2023 with at least $315 million in cash and investments. In the second quarter of 2023, we will have non-recurring cash payments of approximately $8 million in connection with our reduction in headcount. We expect our net cash usage to decrease in the second half of the year after these payments are made in June. As I said earlier, this reduction in net cash utilization extends our cash runway through at least the middle of 2026. Our GAAP revenue for full year 2023 is expected to be between $80 million and $90 million. This revenue includes $65 million-$70 million in non-cash royalties and $15 million-$20 million in product sales. We anticipate full year 2023 GAAP R&D operating expenses will range between $105 million and $115 million, which includes approximately $15 million-$20 million of non-cash depreciation and stock compensation expense. We expect G&A operating expense for full year 2023 to be between $75 million and $80 million, which includes approximately $15 million-$20 million of non-cash depreciation and stock compensation expense. For the full year 2023, we expect to recognize restructuring, impairment, and costs of terminated programs of approximately $30 million-$35 million, $13.2 million of which is a non-cash impairment that I mentioned earlier and was recognized in Q1 2023. Our full year 2023 non-cash interest expense is expected to be between $20 million and $25 million. With that, we'll now open the call for questions. Operator? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question will come from Chris Shibutani from Goldman Sachs. Your line is open. Hi, good afternoon, everyone. This is Charlie on for Chris. Thank you so much for taking our questions. I understand the excitement for having REZPEG back in-house, but just wondering, as we're thinking about the restructuring efforts going forward, are you open to the opportunity of potentially partnering REZPEG with another pharma partner at some point, or are you happy to keep it in-house at this point? I have a quick follow-up. Yeah. Good. This is Howard. Good question. At this point, I have no plans to partner it 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 IIB trial in atopic dermatitis with success, and it will, you know, be the first mechanism of its kind and set, I think, set the stage for a new way to treat autoimmune disease. For now, it's our drug. Hope that answers it. Yeah. No, that's very helpful. Thank you. Just quickly, if we think about the timeline for the phase IIb in atopic dermatitis that was kind of played out just now, should we be expecting those data to maybe be like a mid-2024 sort of timeline? Yeah, look, we're gonna start that study as soon as we can. It's gonna 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. You know, 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 on for Mara Goldstein. Thanks for taking our question. Just two quick ones from us. For the phase IIb study in atopic derm, are you planning on conducting different sub-analyses for different patients with maybe prior to Dupixent, JAK, or other cytokine use? One quick one on NKTR-255. You know, can you give me color on the type of, you know, partnership Nektar might look for? Like, would a Lilly type of deal be interesting? Well, okay. I'll let me take the second half first, and then I'll give it over to JZ for to answer your first part of your question. I think that. Look, we're focused. Right now I think we're, you know, we need to focus. We need to make sure our cash runway runs through at least the middle of 2026, and I'm comfortable that we can do that. That means we're gonna focus right now on atopic dermatitis because it's an enormous market. certainly much larger than the cell therapy market. I do think that that's where we need to focus, and I think REZPEG has not just the potential to treat atopic dermatitis, but if we're successful there, the potential for that type of mechanism in various autoimmune disorders is kind of exciting. I do think for NKTR-255, I can't tell you what that will look like yet. Obviously it'll be, it'll be in combination with a cell therapy, whereas obviously what we're doing with REZPEG is, you know, as active as a single agent. We have to explore carefully what that deal would look like. I think it could be a joint collaboration, it could be a license deal. Don't know yet. Certainly all the cell therapy companies are talking to us 'cause I do believe they feel that IL-15 is going to be important in potentiating cell therapies. Lots of discussion, lots of potential. It could be a collaboration, it could be a license. Don't know yet. Okay. Hey, Jerry, this is JZ. In response to your first question, you know, the study design is being finalized now, and we still have to, you know, wait for the feedback that we get from the health authorities. I can give you a little bit of color. We're planning to enroll approximately 280 patients. We will have multiple dose regimens that we'll evaluate in the induction phase. In the maintenance phase, we'll also be looking at very infrequent dosing regimens. The purpose of this design is really to springboard from the things that we learned in the phase IB study. There we saw that strong and long durability of effect, which we believe in the maintenance arm can allow us to access very, very low frequency dosing, which would be highly differentiating against all of the other agents in the class that require either a twice monthly or monthly kind of a dosing regimen. As we get closer, you know, to later this year, closer to kicking off the study, we will give another update, you know, where we'll unveil the design of the study, you know, some of the key endpoints that we're measuring and all of the additional features. Please stay tuned for that. It'll be coming up soon. Super helpful. Thanks for the answers. Thank you. Our next question will come from Jessica Fye from JP Morgan. Your line is open. Hey, good afternoon. This is J.L. for Jess. A couple of questions from us. First of all, for your kind of strategic decision to partner on 255, just wondering if this is something new after you kind of regained the full right of REZPEG, or was it always on the table for 255? On your cash runway, is there any extra color that you could kind of construct for us? For example, does your current cash runway to at least mid 2026 kind of budget in, like, completing the full phase IIB study for REZPEG? Does it also kind of budget in your 255 study, right, with cell therapy in phase II? I believe that's currently active. I think you kind of announced some new programs just now. How much, like, cash runway have you budgeted for those pre-clinical studies, assuming some of them can move into the clinic? Thank you very much. Okay, good. Very good questions. Look, you know, we've been working as an immuno-oncology company and an immunology company, of course, 255 was an important component of our portfolio. I still think Nektar 255 IL-15 has an important role in immuno-oncology. That said, you know, we need to focus, and we need to focus where the opportunities are largest and the opportunities to have a novel mechanism are available to us, and that's REZPEG. Will we keep working on 255? Yes. I do think we've changed our mind at this point over the past years and have decided that as an immunology company, we would like to find a strategic partner for Nektar 255. That's to allow us to fully exploit our skills in immunology. Now, to the second part of your question, our cash runway through at least 2026 includes the full cost of a 2b study in atopic dermatitis. That full cost is in there. It's approximately $60 million. That is fully accounted for in there, as is the cost of continuing the NKTR-255 studies to gain a partnership, as well as the IND filing for those two programs. That's all in the cash runway through 2026. If we do any other deals or any other opportunities in there, that'll just add, as Sandra said earlier, to the length of our cash runway. Hope that answers it. Thank you. Our next question will come from Greg Harrison from Bank of America. Your line is open. Hi there. This is Mary Keown for Greg. Thank you so much for taking our questions. I guess in terms of the REZPEG program, how are discussions going with regulators regarding the development of REZPEG in atopic dermatitis? Maybe just looking at the program as a whole here, what other indications beyond AB and lupus do you think would benefit from this treatment? Thank you. Okay. Those are good questions. I will turn that over to J.Z. to give you a good answer. Yeah. Thanks, Howard. Yes, thank you for the question. The agency, of course, has seen the, you know, the totality of all of the studies that have been put forward so far. That includes, you know, the phase IB study in atopic dermatitis, where of course, there was feedback on the protocol and multiple discussions with the FDA on that study. In terms of the phase IIB study, as I mentioned earlier, we're finalizing that study protocol, and we'll be seeking health authority feedback on that protocol very soon. We'll get the 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, you know, so far REZPEG has been evaluated in a number of indications. There was activity that was seen in atopic dermatitis, as we've discussed. There was activity in a phase IB study in psoriasis. We saw clinical activity in lupus. In ulcerative colitis, the study was stopped early, it was not efficacious in that indication. One of the things that this gives us insight in is a range of different kind of immunological settings where we know T-regs are important and we know that either T-reg dysfunction or the absence of a T-reg compartment controlling conventional or effector T-cells is a challenge. There are a range of additional indications that we're thinking about. There's a number in the TH2 spectrum of diseases. Obviously, atopic dermatitis is atopy of the skin. There are multiple other atopic conditions of other organs, you know, definitely something that we're thinking a lot about. There are some neuroinflammatory diseases that we think about as well, and others. There's definitely a very wide spectrum, both biologically and with this novel mechanism, to consider multiple indications. As we reiterated on the call, and as Howard just mentioned, focus is critically important. Besides focusing on our immunology pipeline, we're prioritizing our phase IIB study in atopic dermatitis. As we move forward that study, and as there's data from that study, we expect in the future that we'll be expanding the program as well. Great. Thank you so much. Thank you. As a reminder, to ask a question, please press star 1. Our next question will come from Daina Graybosch from SVB Securities. Your line is open. Hi. Thank you for the question. I'd like to understand how you're thinking about the therapeutic window for REZPEG. Specifically, in the lupus study, you also had a dose response in tolerability or safety, and the highest dose, I think, is close to the dose where you saw the greatest Treg increases and efficacy in ATD and seemed pretty intolerable in lupus. How are you navigating that in your phase IIB? Thank you. Well, I'll turn that over to JZ for a more thorough explanation, but the effects of these, of a Treg mechanism and is somewhat different in different diseases. JZ, do you wanna comment further on that? Yeah. Thanks, Daina, for the question. You know, we've seen with even low-dose IL-2, and I know you're familiar with the literature, that across different disease indications, low-dose IL-2 has a different kind of performance, there's different kinds of sensitivity of the underlying immune dysfunction and how low-dose IL-2 works. One of the things that I, you know, that we learned from the study in lupus patients, right, is that the high dose, which we've 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, you know, we really didn't see systemic toxicities and issues with that dose level in those other patient populations. In the moderate to severe lupus patients, we saw more intolerability in that setting. 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 a disease. Even though the same dose level was studied in both patient populations, you know, 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 IIB study is that we've already studied that same dose level, the 24 micrograms per kilogram in the phase IB, which is essentially analogous to the 1,800 microgram flat dose. We've already studied that dose level in the phase IB study. Looking at the efficacy profile relative to the tolerability profile, right, it looks like a very reasonable and encouraging, if not positive, kind of a risk-benefit profile from that small study. We're comfortable continuing using that dose level in patients with atopic dermatitis. Yeah. It's really a patient population and disease indication difference. It's really not uncommon for many drugs. Great. Thank you. Thank you. Our next question will come from Boris Peaker from TD Cowen. Your line is open. Hi. This is Han Fei Fu for Boris Peaker. Thanks for taking our questions. I have one for REZPEG. Lilly decided to return the asset. Just wonder if you could give a little color for the reasons behind. Also you had some feedback, positive feedback from the key opinion leaders. What does that make you feel, confidence to move forward with this asset? Okay. Good. Certainly a good question, you know, pretty reasonable. Look, Lilly has other priorities in atopic dermatitis. When we took the REZPEG data in both lupus and in atopic dermatitis to the various key opinion leaders, every key opinion leader that reviewed the data believed that REZPEG is promising therapeutic and needs to be advanced in the clinic to help patients. I think we were very comfortable when we went to some of the true thought leaders in atopic dermatitis and the true thought leaders in lupus and had them look at the data. They were very impressed with it, actually. I think Lilly, we were very excited to get REZPEG back from Lilly. I think they made a business decision that doesn't reflect on the inherent value of REZPEG. Instead, it really reflects their strategic direction, where REZPEG would have been a potential competitor, to their anticipated and soon likely to be approved, other therapy in atopic dermatitis. I think, you know, there's lots of reasons for them giving it back to us. But I wouldn't say Lack of efficacy for the drug is one of them. I hope that answers your question. Thank you. That's very helpful. My second question is just general question. As your company now shifting to immunology-focused, like, bio-biotech. What have you done in terms of your organization that you are, you know, expertise-wise, what have you done to make it a possible or a successful transition? Okay, since JZ is running that part of the organization, I'll let him answer that. Go ahead, JZ. Yeah. Through the years, we've been bringing in staff, with expertise in both drug discovery and drug development, in immunology indications. We've been actually bringing that in. When we have, you know, 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. 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. I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Howard Robin for any closing remarks. We thank you, everyone for joining us today. Again, I wanna 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 REZPEG with everybody, please stay tuned. I think there's a lot of potential for this molecule. Thank you very much. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.