Hey, everyone, we're back. We have Nektar Therapeutics here. I have Chief R&D Officer Jonathan Zalevsky and Jennifer Ruddock, CBO. Maybe Jennifer, I'll kick things over to you for a brief company overview, kind of how you've got, you know, are now at an I&I summit, and kind of the recent focus for the company, and then we'll go into more Q&A. With that, Jennifer. Great. Thanks, Alex, and thank you for having us today. We really appreciate being invited. So yeah, we have pivoted into immunology, and we appreciate the opportunity to be here today to talk about that. I think what makes Nektar unique in the area of immunology is that we're working on agonists, and we're gonna talk more about those today. But when you look through the field of immunology, there's a lot of antagonist work. Both of the programs in our pipeline that we're working in are agonists. One is a pegylated IL-2 molecule that stimulates T-regulatory cells, that's our key asset, REZPEG, which is in phase II studies, and we can talk more about those studies today. The second asset is an antibody, and that's in the preclinical. We do expect to put that into the clinic next year, and that's a pretty exciting program as well. In addition to the core antibody in that program, we're also looking at a bispecific program around that program. So we're very excited about what we're doing. I think our core focus for REZPEG right now is the phase II work that we're doing. We have one phase IIb study that's in atopic dermatitis patients. It is a biologic, and it's being dosed every two weeks, every four weeks in that study. We do have 400 patients in the trial, and we can talk about the design, but it's a great opportunity for us. We reported excellent proof of concept data in phase Ib in that setting, and so we're looking forward to the study readout in the first half of next year. Great. Awesome. So maybe just kick things off, I don't know if this is a question for you, JZ, but, you know, what inning are we in understanding kind of the role of Tregs in autoimmune disease and the culture? What do we know so far? Mm-hmm. Yeah. I think it's still the early innings, you know, 'cause I think we've only just started to see therapeutic agents designed to target the Treg axis, whether they're cell therapies or they're agents like our REZPEG, you know, which is designed to mobilize, stimulate, expand, and proliferate the Treg compartment. But I think why it's still early is that we've seen correlations of Treg deficiencies associated with diseases, including genetic loss of function of key proteins like FOXP3, which defines the Treg, being associated with very severe autoimmune diseases, like IPEX syndrome, for example, right? But we're just starting to see what it means to target the Tregs. But why ultimately they're so important for autoimmune diseases, we see that they're deficient in a whole host of different diseases, and their deficiency comes up in different flavors. There can be less of them, or they can be present but substantially reduced in their cellular potency. And why you want to bring them back, targeting them for these diseases is a very novel approach. The last part about it, why I think it's so interesting, but we're just starting to understand, is that what makes a Treg so powerful is that it can polarize to any other T helper subset. So if you have a Th1 that's driving a disease, well, there's a Th1 Treg that can control that harmful Th1 cell. If there's a Th2 T cell driving, you know, more of an atopic or other disease, there's a Th2 Treg. Likewise, for Th17, Th9, Th22, right? Pretty much any polarity a T cell can take, a Treg can match, and then that same antigen that drives that polarized T cell to be autoreactive or harmful, inflammatory, drives the Treg to be immunoregulatory and shut down those responses in a very specific way. And the last part, why we're so excited, is they're really not predicted to be immunosuppressant. Mm-hmm. It's not like taking a steroid or a, you know, a strong immunosuppressant like CellCept. It's really immunoregulatory. It's gonna be very specific to the antigen, and it's really only gonna suppress that antigen and not suppress everything. So, there's. It's the beginnings, but there's a lot to work with, you know, which is why it's so exciting. Yeah, and I guess to that point, can you talk a little about the importance of IL-2 in regulating Tregs? And then, I guess, more specifically, how REZPEG is differentiated among other approaches to, you know, IL-2. Yeah. So IL-2 has a lot of, you know, functions to T cells in the body, but it's quite redundant in a lot of its capacities. There are other cytokines that can take the place, but when it comes to Treg, it's one of the most non-redundant sort of functions of IL-2 that we know about, and we know that from a lot of different kinds of evidence. The first is that the most penetrant phenotype in the IL-2 loss of function or knockout mouse is actually an absent Treg, and that shows up first before anything else, and that animal actually has a very short lifespan due to really catastrophic autoimmune disease that arises from a Treg complete deficiency. The other reason why we know that is because Tregs are a unique cell in our body that undergoes continuous positive selection, and that's different from most cells in the immune system which undergo negative selection. The Tregs are constantly priming, they're constantly looking for antigens in the environment, and they're constantly expanding their population on an as-needed basis, depending on which antigens are most dominant and which antigens need the most immunoregulation, and IL-2 critically drives that property of the Treg life cycle. So IL-2 is really, really critical. And that's why, you know, through many years of lots of trial and error, right, targeting the IL-2 pathway to reach the Treg compartment has really proven, you know, to really be one of the most strongest ways, you know, that we can access that cell type as a potential therapeutic. Then when you think about IL-2 in general, you know, this field really started with David Klatzmann, right, who's a professor at the Sorbonne, and for many years, he and his colleagues have been testing low-dose IL-2 as a means of accessing the Treg compartment. While that's shown some activity, you know, in a range of different studies, ranging from neuronal studies, like most recently in ALS, to other studies that are more systemic and inflammatory in their nature, ultimately, this approach is really difficult because you can't really dose IL-2 in a meaningful way, and low-dose IL-2 can really only expand the Treg compartment to a small amount, because if you push the dose of IL-2 too high, then you expand non-Treg populations, and that would be completely the opposite effect that you're going for. So with REZPEG, you know, we used our pegylation technology to modify IL-2 in very, very beneficial ways. The first thing is we did not induce any mutations into the IL-2 sequence. We get asked a lot about comparing our approach to IL-2 muteins and the other versions. And, you know, it's really important to know that our molecule is a full agonist, whereas most of the muteins, actually, all the muteins that I know of, as you know, are partial agonists. So they have specificity across the receptors, but they can't reach the same peak of signaling that native IL-2 can reach. Yeah. That's not the case for REZPEG. REZPEG is a full agonist, just like IL-2, and the way the peg works is by actually limiting the on rate of binding, so you have fewer collisions giving rise to a signal. But once it's bound, its off rate is exactly the same as native IL-2, meaning it induces the native conformation that the receptor and ligand need to see for signaling. And we know, we think that's one of the reasons why REZPEG is where it is. You know, we've treated 600 patients, we've made it through nine clinical studies, we have a really big data set, and we have, you know, some of the most interesting data in atopic dermatitis, you know, it's been seen in a while, and we're very excited that we see that with our agonist program. As Jennifer said, that's why we're advancing it so furiously, right, into multiple phase II studies. I guess before we get to your specific studies and whatnot, I think you suggested, you know, some of the differences with the mutein, but there has been some mixed data in autoimmune across sort of the breadth of the IL-2 space. Is that attributed to the lack of full agonism in your view, or how should we, like, make out those results? Yeah, you sort of see a couple of flavors. So for several of the muteins, we know they have an immunogenicity risk- Mm-hmm ... and that's really imparted by all the mutations, right, that they carry. And we've seen those those anti-drug antibodies really limit the development of those antibodies, and we've seen one program terminated for that in particular, and another program been very slowed, because of the ADA risk, and then the neutralization, you know, that comes with the potential of those ADAs. We've also seen that some of the designs, you know, weren't as. They didn't really deliver in the clinic the same way that they thought they may have delivered pre-clinically, and all of that, that's attributed to a number of things. Some of them were tested, like, for example, Roche's in ulcerative colitis, which has not been an indication that any of the IL-2s have shown activity in. Mm-hmm. So that was, that was one thing for that. And then the others were, like we discussed earlier, they were impacted by a partial agonism. And one of the things that, how that manifests itself is that when you repeat dose, the activity seems to drop off, right? Mm-hmm. So in, like, a single ascending dose healthy volunteer study looks really promising, right? But then when you start considering 12 weeks, 24 weeks of dosing, really the activity wanes because they signal too hard, you know, and kind of getting the balance of the attenuation is really important. But all of that is based on also around the backdrop of a lot of work that David Klatzmann and colleagues have done. And so even in those studies, you know, we've seen tremendous efficacy in diseases like ALS, right, which was just recently published at the end of last year, that phase III study. But we've seen in other indications a more challenging, you know, kinds of results. So I also think that the field is sort of dealing with a low-dose product that leaves probably efficacy on the table, 'cause you can't really dose it high enough in the case of low-dose IL-2 indication selection, where clearly some indications are better than others, and then design difficulties in the case of partial agonists. All of those things have probably jumbled the situation a bit, but we're very confident in the data that we've generated. Yep ... and the consistency, you know, especially from across different skin diseases- Yep ... that we've observed, atopic derm, psoriasis, and lupus cutaneous manifestations, and so we hope we can clarify a lot of situations for the field with our phase II data to come next year. To that point, you know, I did want to talk a little bit about, you know, the breadth of the proof-of-concept data that you've generated in AD, psoriasis, and lupus, and, you know, what was, you know, most compelling about the atopic dermatitis data that led you then to move to phase II? Yeah. So the first thing, really, most importantly, is, you know, these are single-agent monotherapy studies, right? They're randomized, placebo-controlled, double-blind. You know, this is the most kind of rigorous way, right, to evaluate a drug's mechanism, and we test multiple dose levels and look for a dose-dependent effect, right? So we're really kind of... And you have to really do that, right? I mean, this is a chronic condition. This is a disease that flares, it changes with season, you know, so you really need to see dose dependency and the results in a blinded way. So with that backdrop, you know, when we launched, the-... The first thing that we did when we did our very first phase Ib, our first MAD study in mild to moderate lupus patients, even though that was only a six-week study, we saw a very profound and rapid dose-dependent reduction in the CLASI score in the patients that had baseline cutaneous, you know, manifestations of disease. And very rapidly, like one person went from a score of 22 to five over like a two- to four-week period. It was really dramatic. And that led us, you know, to move with our former partner to testing, you know, the drug in both psoriasis and atopic dermatitis. And we saw activity in psoriasis. The activity looked about in range of Otezla, like an anti-TNF. It wasn't IL-17 or 23 like, but it was certainly clear, you know, biological activity. Then when we looked at the results in atopic dermatitis, you know, that was where it was really dramatic, right? So in atopic dermatitis, we saw very profound dose-dependent effect, very rapid onset of action. Many people had a 50% improvement after just a single dose, measured two weeks after the first dose was administered. Then, besides the rapidity, we saw a very profound magnitude of drop in EASI score, like relative to baseline. You know, many people reaching an EASI 100 in that study. We only dosed for 12 weeks, relatively short compared to the contemporaries, you know, that are pushing induction, you know, 16-, 24-week and longer. Roche pushed it to 36 weeks. Mm-hmm. Right? So you're looking at a short treatment period, very, very deep activity. And then I think the most kind of wow component of the data, certainly to the derm community, right, was this potential of remittive effect. Mm-hmm. Because when we withdrew dosing at week 12, the majority, vast majority of patients maintained their response, many of them even further deepened through 36 weeks. So a six-month period of observation post-dose with a profound durability of effect, something that you just don't expect to see with an IL-13 mechanism or with a JAK inhibitor, which are terrific at controlling the symptoms. B ut when the drugs are resolved, the patients will flare back. What about the pathology of atopic derm, you know, makes this amenable to this sort of a mechanism, in your opinion? Yeah, so it definitely has a different underlying signature. So first of all, atopic dermatitis is known to be more systemic than psoriasis, right? Mm-hmm. So you can look at the proteomic studies and the transcriptome studies. Even with analysis of tape strips, there's a tremendous systemic, right, component of the disease. If you compare an atopic derm proteome to a healthy volunteer versus psoriasis, there are many, many more upregulated systemic proteins in AD, much fewer in psoriasis. So that- that's one thing. The other is that particularly when, you know, our data is in adults, so I'll, like, focus on adults for now, is they also develop a very mixed underlying inflammatory signature, right? So in early-onset children, adolescents, it's very type two, Th2-dominant disease. But then as you become an adult and you've had the disease for a long time, it really switches. So you have a lot of Th1, you'll have Th17, Th1. You'll have a lot of mixture in polarized T cells that drive the inflammation. So it's harder to treat that disease if you have a pure Th2 antagonist. But with a mechanism like REZPEG, which can target multiple, you know, polarities of T cells, that gives it this, this potential. And so I think that that might be one of the, of the things, that you have much more systemic feature- Mm-hmm ... in the atopic dermatitis than you do in psoriasis. And then, of course, at the skin level, you do also have, like, totally different, you know, local pathology as well. Yeah, and I think, you know, one of the other considerations, you know, in autoimmune, some of these chronic diseases where there's therapies approved versus oncology, is just the, you know, benefit-risk profile is a little bit different. Can you talk a little about the safety profile that you're seeing in autoimmune, you know, potential for some of the on-target tox risks like eosinophilia, et cetera, and that, how that looks so far? Audio. You cut out. Did I cut out? Hello? Can you hear? I can hear you. Jennifer, can you hear me? Oh, okay. Yeah. Can you hear me now? Yeah. Yeah. Cool. Happy to take the- The broader safety profile so far in autoimmune, what you've seen for on-target tox, things like eosinophilia, et cetera. Sorry, hey, can you hear me now? Yeah ... correction from that? Okay, great. Yeah, yeah, so, so definitely, the risk-benefit profile is critical. This is a chronic disease, right? This isn't oncology, where you have a very short lifespan, and you expect to treat this, you know, this agent for, for years. So we've been very careful to monitor IL-2-related toxicities. When we started, and this was very much the health authorities' question, you had to dispatch, like, major IL-2 toxicity. So at the beginning of the program, you know, there's no what is the vascular leak? What's pulmonary edema? What is the CRS like? So we dispatched all of that kind of risk away, and it's a very, very clean profile for a systemic, you know, application. And then we looked at down the IL-2 pathway, and so eosinophils are known to be induced following IL-2 treatment. The theory is that they liberate IL-5 secretion, probably from innate like ILC2 type cells, 'cause they also have IL-2 receptors on them. So we studied eosinophils. We studied those preclinically. We published about them in monkeys, and we continuously follow them in our clinical studies. We set a pretty conservative threshold so that if a patient, you know, reaches a lab value of eosinophils at a certain level... then we'll try to, like, pull back. And what we've seen in the program is we see some patients; it's very sporadic, it's not all people. It's kind of a bit of a random effect. So we see them sporadically in patients, but we've not seen any signs of what's called the eosinophilic syndrome, which means either tissue or organ involvement. Though we've seen some patients with lab elevations, we pulled back, and they dropped back down into normal levels. We haven't seen any toxicity. And then we also look at NK cells, which is another target. We target a very specific NK population, which are the CD56 bright CD16 dim. These are some people call these regulatory NK cells because they don't actually kill opsonized cells. They don't have a CD16 receptor, but instead, they secrete a lot of regulatory cytokines. So we also follow the NK population closely as well. But one of the things I'll say why this is so important from a risk-benefit standpoint is that we very recently have conducted an integrated safety analysis, where we took. We have roughly 600 patients across nine completed clinical studies. So that doesn't count the ongoing ones, the completed ones. That breaks down to, well, it's actually about 780 patients, about 600 treated on REZPEG, and the rest treated on placebo. Then we've done an integrated safety analysis, pooling all the data and looking at all of the adverse events. What's really exciting about the analysis is that we find that there's no increased infection risk. Mm-hmm ... between the placebo and the REZPEG. And if you remember earlier, we talked about immunoregulatory versus immunosuppressive- Yeah ... you know, yeah, of phenotype. So if it was suppressive, you'd see more infections, right, in the REZPEG group. So we just don't see that. We see the same frequency between placebo, so that's very, very positive. And actually, when we look at both severe adverse events and serious AEs, actually, there's no increase relative to placebo. So overall, we have a really low systemic adverse effect profile. It looks really good, you know, for a drug that can be taken chronically. Mm-hmm. We really follow the most common finding, which is the local reaction and the injection site reaction. Yeah, and I guess taking a step back, if you're able to replicate signals that you saw in the proof of concept study, you know, in atopic derm, what does the market opportunity look like for REZPEG? Where do you see a molecule like this fitting into the broader atopic derm commercial landscape? Yeah, that's a great question, Alex. We have done extensive market research on the competitive landscape, and if you'll recall, we regained this asset from Lilly. We did some of that research before we did that. We wanted to make sure that we were allocating resources properly at the company and making the right decision. You know, I think one of the overriding things that came out of that market research work is that there is a demand for novel mechanisms in this field. So what we've seen so far approved are all in the same pathway, focused around the IL-13 antagonism. And, you know, the biologic sales right now are about $7 billion with those agents. We know that's only about a 10% penetration of the target population that can actually get these biologics. So we think this market's in its infancy. One of the things that we know is that some of those side effects that JZ mentioned, that we don't see with REZPEG, were cited in the research as being problematic for physicians and for patients, and so, you know, from our standpoint, we see this evolving, like the psoriasis market evolved, so in the beginning, there were some overlapping mechanisms, and then it was really the new mechanisms that grew that market to the size that it is today, so you know, we think the opportunity is quite large, and we're very much looking forward to the phase IIb data in the first half of next year. Yeah, I guess to that point, can you talk a little about the design of that trial, kind of key considerations there, and what the bar for success would be? Yeah. So it's a 400-patient phase II trial, and that's bigger than other studies, and that's because we put a maintenance arm into the study. So the key elements of the design is this is a 16-week study, which is four weeks longer than the 12-week phase Ib that we ran. We wanted to do that because we've actually saw that even though many people were well benefited by a 12-week course, there were other people that needed more drug. And we know that you'd never really withdraw a drug like this cold turkey. You'd plan to treat patients for a long time. So we're mimicking that, you know, in the study design, a longer induction, and then crossing people over into maintenance that goes out for a total of 52 weeks, and then a 52-week off treatment follow-up. Mm. So we'll be, again, assessing the remittive effect, but this time after one year of treatment. And then the other key features is that the same patient population as we studied in phase Ib. And then one other unique difference is that we're really testing lower frequency dosing- Mm ...in the study. So we have some regimens on the same Q2 week. We have other regimens of once a month in induction, and post-induction, we have once a month and once every three month dosing in the maintenance. So we really think that with, this is a unique study design, and with the maintenance period, there's a goal, you know, to give us the assessment of full efficacy, right? Because we saw 12 weeks of dosing and the efficacy it produced, and we think there's, maybe we even left some on the table. It could be more if we kept dosing. Yeah. That's one of the biggest things that we're excited to evaluate in this study. Do you expect to be able to have any of this maintenance data at the top line as well, or just induction data? ... Yeah, I was gonna add a little bit on that. So we do expect the top line induction data to come in the first half of next year. We haven't guided to having maintenance data at that point. Mm-hmm. But we are very much on track for the readout from the induction period. We started this trial in October of 2023. We've got over 120 clinical investigator sites enrolled in U.S., Canada, Australia, and Europe, and it is completely on track. And I think we're very grateful for that in a competitive landscape. It's a testament to sort of the data set that we've created and also to the team that's working on it. I guess, you know, I briefly wanna touch on alopecia. How would you kind of rate the level of evidence for T reg as a target there versus atopic derm? Yeah. So I mean, in atopic derm, there's data, right? Yeah. And particularly our data, right? So in alopecia, there isn't any data yet, but there's a very strong translational hypothesis where people that have studied the human disease, you know, and not the mouse version, but the actual human disease, particularly, there's a very strong role of Tregs in maintaining immune privilege. Mm-hmm ... which is essential, right, for a healthy hair follicle, and so our hypothesis in that study is really to bring back the Tregs, bring back immune privilege, and then, as a consequence, be able to, you know, give the patient lasting effect, so for example, if you can withdraw a drug in alopecia the same way that we could in atopic dermatitis, that would be completely transformational, because right now it's only JAK inhibitors. Mm-hmm. And it's so difficult for a patient after they've grown hair to then have to go off a JAK inhibitor for toxicity or other reasons, and then lose it all again. It, it's psychologically devastating. So we hope that we can- And timing- Expect- Timing of this trial? Yeah, it's also expected next year, and we think it'll read out after the phase IIb study, like roughly six months after the atopic dermatitis trial. And then I know, JZ, your TNFR2, your baby, coming- Mm-hmm ... into the pipeline soon. Maybe quickly, on the timelines for that molecule, what could be interesting indications there? Mm-hmm ... would be helpful? Yeah, so just, you know, very briefly, it's a target that, you know, the community's been kind of salivating over, you know, for decades, since we've started to understand how powerful it can be to inactivate TNF-alpha and how therapeutically beneficial that can be. That gives control. It doesn't cure, it doesn't fix the problem, but it gives a lot of deep control. And really, TNFR2, we think is one of the missing links, because TNFR2 really turns off the actual pathological pathways, doesn't just blunt them. It physically inactivates them. And so if you can access them and agonize that receptor, but it's been very difficult 'cause it's regulated in a more complex way. So firstly, we're excited that we discovered a de novo designed antibody, right? This didn't come from a normal immunization, which would've been all the same epitopes we've known for a few years. This came from an AI-based methodology, so it's a completely novel finding, you know, specificity and a completely different binding, you know, epitope. So we're excited about that. And then we've grafted that, you know, into a key developable antibody, and we've shown that it has single-arm agonism, and then, of course, two-arm agonism as a normal bivalent. We're expecting that to enter the clinic next year, in the second half of the year. And then some key indications that we're exploring, you know, right out of the gate are MS. That's just a key role for TNFR2, where TNFR2 has even been shown to remyelinate MS neurons. Mm-hmm. We're also evaluating UC and Crohn's, the whole IBD space, 'cause mucosal immunology TNFR2 is critical for controlling Treg function in that setting. And then also we're looking at vitiligo, 'cause there's really a lot of genetic evidence that links TNFR2 into the pathogenesis of vitiligo. So those are three indications we're thinking of very deeply. But we'll be opening in a healthy volunteer study and then looking to explore those three indications after. Great, and then, Jennifer, maybe briefly, can you talk about your cash runway? Yeah. So we have guided to $200 million-$225 million at year-end, and that's a cash runway that takes us into the third quarter of 2026, and funds the two phase II trials and pushing the TNFR2 antibody into the clinic. Great! Jennifer, Jonathan, appreciate the time, and thanks for joining us. Thanks. Thanks, Alex. Great. Thank you for having us.