Okay. Great. Well, thank you, everyone, and welcome to the UBS Healthcare Conference. Very happy to have Nektar Therapeutics here with us today for a fireside chat. Joining us from Nektar is Jennifer Ruddock, Chief Business Officer, and Mary Tagliaferri, Chief Medical Officer. Thank you both so much for joining us. Maybe if you can just start with a brief high-level overview of Nektar and summarize the highlights of some of your recent progress. Great. I'll kick that off. So we are a research and development stage biotech company working in the area of primarily immunology. The majority of our pipeline are biologics, and our lead asset is actually a T regulatory cell stimulator that is in two phase II studies, one in atopic dermatitis and one in alopecia areata. So our primary focus in the clinic are those. We do have some earlier stage programs that are headed towards the clinic. One is a TNFR2 antibody and a bispecific program as well based upon that antibody. We're hoping one of those is going to go to the clinic next year. And then we also have a CSF1 program that utilizes pegylation. So the company is relatively small. So we have approximately 60 employees. We just divested out of a manufacturing facility. And after the close, we'll have about 60 employees. So we're running very efficiently, I think, at this point as a company. And we're going to end this year with $265 million in cash, which will bring us with a cash runway into the fourth quarter of 2026. And with the data readouts from the phase II studies coming in the first and second half of next year, we're very well positioned going into those data readouts. Great. Well, I guess starting with RezPEG, just in terms of the basics, can you give an overview of the mechanism of action and the biology supporting this and why this mechanism could be ideal for autoimmune or inflammatory conditions? Sure. I can kick that off. So RezPEG is a pegylated IL-2, and IL-2 is a cytokine that has been well known all the way back in the '70s. It was used to actually proliferate lymphocytes in the earliest HIV studies. And IL-2 is pleiotropic. It can both expand effector T cells as well as T regulatory cells. And in many autoimmune disorders, there's an impaired IL-2 function such that T regulatory cells are not expanded, and you have an imbalance of your T convs versus your T regulatory cells, and this leads to a breakdown of self-tolerance. So we designed very cleverly an IL-2 using our longstanding polymer conjugation technology. And what this does is it really overcomes the shortcomings of low-dose IL-2, where low-dose IL-2 has a very narrow therapeutic window and a very short half-life. So our pegylation technology allows us to overcome the narrow therapeutic window by having a very highly selective agent for the proliferation of T regulatory cells without increasing the bad T effector cells. And second, it expands the very short half-life to 10 days, which allows for very convenient dosing in the outpatient setting. And then finally, unlike a lot of other companies pursuing IL-2s, we use the native amino acid sequence for IL-2, and so that really limits and reduces the risk of mutagenicity, which could hamper both safety and efficacy. So the whole goal here is to reach immune homeostasis by using IL-2, the growth factor of T regulatory cells, boost up, reconstitute T regulatory cells in patients who have impaired T regulatory cell numbers and function to rebalance the immune system and address the underlying condition. Great. And you're in development for atopic dermatitis, and there certainly are a large number of assets and different mechanisms in development or approved for atopic dermatitis. Where do you see RezPEG fitting across this landscape? Sure. So the most commonly used drug now is Dupixent, and Dupixent is an antagonist to two cytokines, IL-4 and IL-13, and those are cytokines that are increased in expression due to a TH2 inflammatory condition, and while Dupixent works well in some patients, one of the problems is that the disease is actually more heterogeneous than just a straightforward TH2 dysfunction, so there's also TH1 involvement and TH17, so Dupixent has that limitation, and the second limitation it has to not treating 100% of the patients because of the mixed picture. It also, once those patients who have a TH2 disease pathway, when they stop taking Dupixent, 79% of those patients must restart after four months because they have a rebound of their disease, so Dupixent is like, if you consider a sink that's overflowing with water because the faucet is on, Dupixent is like the mop. You mop up the water, and when you stop mopping up those cytokines, your floor is all wet again. Your disease returns. In contrast, RezPEG is like turning off the faucet. It's moving upstream. And as such, it can impact the overactive T effector cells, which, just blocking a cytokine, you're not doing. So a regulatory cell can decrease those overactive T effector cells. It can also decrease antigen-presenting cells. And in and of itself, it releases immunosuppressive cytokines like TNF-β and IL-10 and IL-35. And so it's really important to actually have a broader mechanism more upstream to have a more holistic effect on the immune system and bring the immune system into balance so there is self-tolerance and you can have durable, lasting effects from treatment. Absolutely. And are there certain subsets of atopic dermatitis patients that you think might be particularly responsive or well suited to RezPEG versus, say, some of the other mechanisms? Yeah. What's nice about this broad mechanism is we believe we could address all patients. And again, not only do you have the problem of like JAK inhibitors seem to work very well in a broad patient population like a RezPEG, but the main difference there would be, again, rapid rebound with a broad cytokine inhibitor. And second, it's coupled with so many black box warnings for malignancies, serious risk of infection. So you want to have a broad mechanism that also has a lot of safety. And that's why we believe RezPEG is well poised to be a first-line treatment for a broad proportion of patients with atopic dermatitis. Great. And yeah, let's talk about your phase II design and timelines. Great. So in October of 2023, we launched our phase II-B in atopic dermatitis, and we expect to have data next year in the first half of 2025. And in terms of the design, we designed it very similar to our phase I-B trial and similar to other phase II and phase III trials in biologic naive patients. And the 400-patient study will randomize to three different doses of RezPEG versus placebo. We use standard criteria for what is a patient with moderate to severe disease based on three endpoints: the EASI, the body surface area, and the IgA. We then will have an induction period for 16 weeks, at which time point we'll have our primary efficacy endpoint of mean% change in EASI or the eczema area severity index. We are running a relatively large phase II so that the second part of the trial, we can re-randomize patients to each specific dose to a maintenance of one month versus every three months. That would be a highly differentiating feature of RezPEG versus Dupixent, which after their induction period, they continue to treat every two weeks. Imagine we could have a maintenance phase of every one month or every three months. That would be highly differentiating in our study. Timelines for when we'll get the data? Yes. So we'll have the data in the first half of 2025. We're very close to completing our enrollment. Unlike a lot of other companies that we've been watching, we've been able to stay on our timeline and our projected enrollment curve. I think the reasons for that are people are very excited about a novel mechanism of action that can have this durability of effect and really aims to harmonize and rebalance the immune system as opposed to just suppress cytokines. How did you approach the dose selection for this trial? Yeah. So we've actually dosed about 600 patients with RezPEG in nine different clinical trials, some in healthy volunteers and some in other autoimmune diseases. And we did see a signal of efficacy in cutaneous lupus and psoriasis in our phase I-B in atopic dermatitis. Extracting the data from our phase 1-B or excuse me, our phase 1-B in atopic dermatitis, we saw at 24 micrograms per kilogram a very rapid onset of action. So a large proportion of patients after one or two doses having an EASI- 75. Second, we saw a very large magnitude of benefit after just 12 weeks of treatment. We saw a mean% change in EASI of 83%, and that was statistically significant versus placebo in our phase 1-B. And then most importantly, as we've been talking about, those patients stopped being dosed at week 12, and we followed them all the way out to week 48, so nine months of no treatment. And we saw the durability of effect with a mean percent change of still 83% after nine months without any therapy. And so we felt very confident about moving forward, certainly with this dose where you're getting efficacy better than any biologic and this durability of effect, and it was also very safe. Makes sense. And in terms of the patients enrolled, I know you mentioned you see frontline potential in atopic derm, but just curious, are you enrolling any patients that are Dupixent experienced and what you're expecting in terms of the patient mix of those enrolled? Yeah, this is such an important question. We thought long and hard about whether or not we should enroll biologic experienced patients in our trial. Since we saw this very strong signal in biologic naive patients, it naturally made sense to move forward in the exact same patient population. Likewise, we can benchmark that data to Dupixent, which would be the primary competitive agent. So that was the thinking. As we move forward in our program in phase III, we could certainly consider the incorporation of biologic experienced patients. We certainly believe those patients that have been exposed to a cytokine. When those patients stop and their disease comes back, frequently it's no longer a TH2-only disease. It is this TH1, TH2, TH17 mix of an inflammatory pathway. We believe that RezPEG would be an excellent choice for, again, going upstream and having a very broad immunosuppressive capability and then bringing the immune system back into balance. We believe RezPEG would be an excellent second choice for somebody who has had disease progress after an agent like a cytokine antagonist. Makes sense and as we head into this phase II readout, the first half of next year, certainly an important milestone, what are you looking to see in terms of what would be good data and in particular, what would support further development? Sure, so the nice part about there being three cytokine antagonists on the market now is that there's a lot of phase III data to benchmark to, so Dupixent in their phase IIIs had an EASI-75 of roughly 44%-51%, and their IgA responders of 0 to 1 were about 36%-38%. So we know what the dermatologists are looking for in terms of efficacy, so we want to certainly hit that level of clinical benefit for patients that makes sense, and I think anything above that is excellent. And then we continue to differentiate on a couple of other points. Number one, none of the agents that are on the market now have durability, so you have to take that for life, and when you stop, your disease rebounds. We are seeing from our phase I- B this beautiful ability to maybe even be disease modifying and have a remissive effect that lasted for nine months. So even if we had similar efficacy, but allowed for patients to be able to pause treatment or have infrequent dosing in a maintenance period, that would be highly differentiating. And then in terms of safety, conjunctivitis is a real issue in the real-world setting. Up to 60% of patients can have conjunctivitis. It's pretty bad to go to work and have your eyes all red and they're itching. So that's a serious consideration for differentiation. We've looked at our 600 patients who have been dosed, and we don't see any risk there for conjunctivitis. Makes sense. And then just broader, the immune system sometimes can be a double-edged sword in terms of efficacy and safety. Just big picture, how are you thinking about the potential safety liabilities? Yeah. So I think if you look at broad mechanisms, so we know the JAK inhibitors have this very broad mechanism of action with dampening multiple different cytokines in multiple different pathways. Look what happens with that broad mechanism. You increase the risk for cardiovascular disease, thrombosis, malignancy, serious infections. And then the doctor has to actually draw blood on the patients and look at their CBC for neutrophils and lymphocytes and look at their metabolic panel for LFTs. And they have to monitor their lipids while they're on treatment. And you have a highly efficacious drug, but you have a lot of monitoring, and you have to look and worry about these serious untoward side effects. To date, we are not seeing low-dose IL-2 in 30 clinical trials looking at low-dose IL-2 used in 30 different settings. You haven't seen these risks for infection and cardiovascular disease in those historical studies. We too have looked at 600 patients dosed with RezPEG. We've looked very closely at LFTs, and we don't see any increase for hepatotoxicity based on liver enzymes. We have not seen any increased risk for COVID. A lot of the trials were conducted during COVID. We haven't seen any increased risk for infection, reactivation of herpes. And so we believe, in contrast to a JAK inhibitor, which is a broader mechanism of action, we have a broad mechanism of action that can bring the immune system back into balance. It doesn't have a rebound effect like a JAK inhibitor or any of the cytokine antagonists with a relatively safe profile to date. So we're really encouraged by not worrying about rebalancing the immune system. A lot of patients who have autoimmune diseases have impaired IL-2 functioning, and so you're giving back the IL-2 to restore these T regulatory cells, which are so critical to self-tolerance, and once you do that and once you bring the body back into balance, there is this opportunity then to stop treatment, which is always great from a safety perspective. Absolutely. Yeah, being able to stop treatment certainly would be unique in the immunology field or even less frequent dosing. Turning to alopecia areata, clearly there's potential for broad applications, but can you walk us through the biology specifically here? Sure. So first, a lot of people don't understand that alopecia is a dermatological skin problem, and you have hair follicles. And it's really interesting. There is what we call immune privilege for certain tissues in the body. The testes are one area, placenta are another, the eyes and the brain. And the reason for that is you don't want to create this rapid inflammation in these areas and damage tissue. And the hair follicle is very similar. It is an area of immune privilege, meaning that there are very few CD8 positive T cells, there's very little MHC expression, there's very few dendritic cells for antigen presentation, and that then allows the stem cells to allow hair to grow. In contrast, when you suffer with alopecia areata, there is what we call a swarm of bees. So if you were to look on a biopsy, you just see all of these CD8 positive T cells around the hair follicle damaging it, and then people eventually fully lose all their hair. Dr. Ralf Paus has done an enormous amount of animal testing showing the key role of T regulatory cells to restore that immune privilege in the hair follicle. We believe mechanistically giving RezPEG will allow that ability to restore the hair follicle, restore immune privilege, dampen all those CD8 positive T cells. You won't see a swarm of bees on biopsy, and people could grow back their hair. Likewise, we're hoping we could see something very similar in atopic dermatitis where you could treat a patient. You have to treat patients for a longer period of time in alopecia areata. The induction periods of studies are like 36 weeks because it takes so long for hair to grow. But the aim would be, again, to be able to restore and reconstitute and replenish T regulatory cells to heal the hair follicle, allow for hair growth, and then to be able to pause treatment. In terms of the landscape in alopecia areata, sort of can you discuss the standard of care and where you see the largest unmet need and where RezPEG could fit into this? Sure. So in atopic dermatitis, you have the JAK inhibitors, you have the biologics. In alopecia areata, Dupixent did go into a large trial in this condition and was not successful. And we believe, again, Dupixent's working well on the TH2 axis, but alopecia areata seems to be more of an inflammatory disease associated with TH1 and TH17. So those biologics that are approved for atopic dermatitis likely won't work in the area of alopecia areata. So what does work are the JAK inhibitors because, again, you can quell all of that inflammatory state with those CD8 positive T cells, but you're not getting rid of them. And so the moment you stop taking a JAK inhibitor, your hair just falls out because those CD8 positive T cells are still around. You are just suppressing the inflammatory milieu around the hair follicle. That's a devastating experience for patients who have patchy hair. They finally grow all their hair back. They're not wearing a wig. They're not wearing a hat. They feel really good about themselves. 80% of patients are younger than 40 who have alopecia areata. So it's a very psychologically devastating disease. And then for all of your hair to fall out very quickly after you stop taking a JAK inhibitor, there's obviously a big unmet medical need here. So we believe we're well poised as a new biologic that could come in and treat alopecia areata and then, again, hopefully allow these very young patients to get back to their lives, have their self-esteem back, and stop taking treatment and not have to take it for the rest of their lives. Anytime you go to an alopecia areata conference, the doctors say a JAK inhibitor is something you need to take for the rest of your life. And a lot of people say, "Wow, these are really young patients. What is our concern about the long-term sequelae of malignancy and cardiovascular disease and increased risk for serious infections?" That's quite concerning for people. So big area of unmet medical need and a much more grave disease than a lot of people understand to be afflicted by this type of hair loss in particular. Can you discuss your phase II strategy and timeline? Sure. So we started our phase II-B in alopecia areata in March of this year. Again, the induction period is longer than in atopic dermatitis. It's 36 weeks. So in terms of timeline, it's going to read out. Since we started after atopic derm and the induction period is longer, it'll read out in the second half of 2025. We started out with a smaller trial, and then when we considered other phase II studies, we expanded the size of our trial to 84 patients. We're looking at two different doses of RezPEG. We certainly carried forward the efficacious dose of 24 micrograms per kilogram from our phase I-B into this study because we feel like that does have a strong effect in a skin disorder. And we will then look at what's called the Severity of Alopecia Tool mean% change after 36 weeks. We are going to follow patients then all the way through to 52 weeks to, again, look at the durability of effect. One important aspect of alopecia areata studies that you should be aware of is in atopic dermatitis, the placebo effect can be up to 50%. We don't see that in alopecia areata. We see the placebo effect being 10% or less. That's really nice because you can have a highly powered trial with much fewer patients than in the setting of atopic dermatitis. That's why we can run a trial with 84 patients and still have a very robust and well-powered trial to assess the efficacy. And so another important readout for you next year. So as we head into that data, I guess in the second half of next year, what specifically are you looking for in the context of the landscape? What do you view as clinically relevant? Yeah, it's a great question. I think having efficacy similar to a JAK inhibitor like baricitinib or Pfizer's JAK inhibitor is a great way to look at the benchmark. They have showed their data for mean% change in SALT. And so I know the low dose of baricitinib has about 33%. So we would benchmark to those other JAK inhibitors. And again, if our safety profile continues and given the long-standing history of use of IL-2 that doesn't have an association with the same untoward effects of JAK inhibitors, I think we'd be well poised to have a first-line treatment. And can you discuss the phase I-B data that we've seen so far from RezPEG and specifically what we've seen from an efficacy perspective? And I think you mentioned it across a couple of indications as well. Yeah. So I think in atopic dermatitis, best place to start. I think people were really excited that we had a dose response. Our lower dose was better than placebo and higher dose was better than our low dose. So start there. Likewise, when we looked in the peripheral blood at the increase in the functional Tregs, we also saw a dose response. So highest dose had a larger expansion of those T regulatory cells. So the PD matched the efficacy. I think we talked a lot about it, but I can't emphasize enough this durability of effect, this remissive effect. I remember going to AD in 2023, and the data were presented by a physician we never spoke to. And he said, "This is groundbreaking. To be able to have a drug that our patients can take and stop treatment is highly differentiating and would really transform our notion of how we treat patients as dermatologists." So that too is important. And then finally, with just 43 patients, we saw a statistically significant difference in the mean percent change in EASI, which is the standard endpoint in these earlier studies, and that was 83%. No biologic has busted through the 83% threshold, and most of them are in the 60s, low 70s. So that was striking to see such strong efficacy. And we just dosed for 12 weeks in that study. All of these other biologics dosed for either 16 weeks, and some of them now have moved all the way out to 24 weeks. So I think with a shorter induction period and a deeper response in EASI, I think that's why our enrollment is on track, actually. When there's so much competition out there, there are hundreds of agents in clinical testing, we were able to deliver this study on time because I think people are excited about the mechanism and the results of the data. Great. Well, I want to make sure we touch on your other programs as well. Maybe, I guess, starting with 1065, can you walk us through sort of the biology here and the mechanism of action and where in the landscape across sort of autoimmune and inflammatory conditions this could fit? Yeah. So NKTR- 0165 is our TNFR2 agonist antibody. And there is a lot of interest in this area. And so the question is why? Well, we were really lucky because we're building on years more than a decade of development in the area of T regulatory cells. And this is very complementary. So where is it different? So TNFR2 is expressed not only on T regulatory cells, but also neuronal cells. And it's also expressed on myeloid suppressive cells and other immune cells. And as such, you can then expand the usage for T regulatory cells into neuroinflammatory diseases like MS, Parkinson's, or Alzheimer's. Then there's some real critical differences in how you would use an IL-2 to boost T regulatory cells versus a TNFR2. So when T regulatory cells develop in the thymus, they actually need IL-2 for complete maturation. And then when they're in the peripheral circulation, they need IL-2 for expansion and even in the secondary lymphoid organs like the lymph nodes. And IL-2 is the ideal agent, and it's dependent on JAKs that signaling pathway. So we have a great agent for that, and it's well suited for skin diseases. Now, when you get deeper into the tissue, deeper into organs, actually you move away from JAKs that signaling into NF-kappa B signaling pathways. And that's dependent on the TNF superfamily. And the most highly expressed TNF protein on T regulatory cells deep in the tissue now is TNFR2. And so it makes sense to have a targeted agent for TNFR2 for things like ulcerative colitis. And we talked about the neuronal inflammatory. And so our antibody, we used AI to come up with an antibody that could signal very selectively to TNFR2. It binds and it agonizes TNF-R2 on T regulatory cells without targeting other CD4s and CD8s and unwanted effects. So that was critically important. The second thing that's unique about our program is it works as a monomer. So why is that important? Well, you can now create a bispecific antibody where you could target TNF-R2, and you could target a second pathway, either a known one or even one that's in clinical development that isn't yet developed into a drug. So there's something very exciting about that as well. So we've had a lot of enthusiasm about our TNF-R2 program. And again, it complements our IL-2 very well to be able to treat T regulatory deficiencies and autoimmune diseases and neuroinflammatory diseases. Interesting. And can you walk us through the timelines here and how you're thinking about indication selection? Yeah. So we've done some work on our TNFR2. We have some animal model data that we presented at EULAR. And again, we're thinking about this highly differentiation. So we're working right now on our IND enabling studies and our manufacturing upstream and downstream processes. And we will be filing an IND at the end of 2025. We, for a lot of competitive reasons, we haven't shared two things. One, we haven't shared all the bispecifics that we're developing right now. And the second thing that we haven't shared is what specific indication or indications we're going to go into because we also think that that's highly competitive because we seem to be on the cutting edge of this field as well. Absolutely. It makes sense. And I guess turning to IL-15 in oncology, can you walk us through your programs there? Sure. So I'm extremely excited about IL-15. I think that we've now put together a lot of data to show the incredible versatility and broad applicability of our IL-15. And we've really worked in two main areas. One in cellular therapies and the second in combination with checkpoint inhibitors. And in the area of cellular therapies, we actually have four trials of which we've shared data for two of them and even a third we've given a hint of. And the fourth trial is ongoing. So let me just briefly tell you about the data. In terms of CAR T cell, the whole goal with IL-15, which was well established from the early Yescarta studies in large B cell lymphoma, is patients with higher levels of IL-15 had greater expansion of CAR T cells, greater area under the curve, and that translated into better efficacy. And so we've used IL-15 to increase CAR T cells in B cell ALL. Stanford just published data in blood and showed that in comparison to their CAR T cell that they developed at Stanford versus the combination of the CAR T cell and IL-15, we extended the relapse-free survival from 38% at one year to 67%. And again, mechanistically, what we thought would happen with the expansion of CAR T cells happened. And second, we ran a trial that 15 patients is placebo-controlled. And in that study, again, we showed that the six-month complete response rate in large B cell lymphoma patients was higher than placebo and greater than what we know from historical trials. And again, we were able to greatly expand CAR T cells, increase the area under the curve, and directly link that to an improvement in the six-month complete response rate. We have an ongoing trial with AbelZeta with their TILs for lung cancer. Then in terms of checkpoint inhibitors, we have an ongoing trial run by Merck KGaA in the maintenance setting for bladder cancer. It is a randomized trial with Avelumab versus Avelumab and three different agents. Either at the end of this year or next year, we will see those data. Finally, Dr. Steven Lin showed data for using NKTR-255 for radiation-induced lymphopenia. He just presented that as a late-breaking abstract at SITC. Those data are very positive and show the applicability of NKTR-255 with durvalumab in the setting of locally advanced non-small cell lung cancer. Great. Well, you have a lot of programs going on. Maybe taking a step back from a strategic perspective, how are you thinking about your strategy high level on partnerships, what programs you might want to keep in-house and develop on your own versus others that are more suited for collaboration? Yeah. So 255 is definitely suited for collaborations, right? So it's working across several different modalities. And one of the things that we're in the process of evaluating right now is, do we potentially do a sort of a non-exclusive license structure across multiple partners, right? Because there may not be one partner that has all of the modalities in their pipeline. So the data as it's emerging has really driven this thinking for us. And so we are looking to partner that. It's a combination asset. It makes a lot of sense for us to partner in different ways with folks that have something in their pipeline where we can actually help and accentuate the outcomes for patients. When we look at RezPEG, we wholly own it, obviously. And I think as we go into the data readouts next year, we want to maintain strategic optionality for how we proceed in development. And that'll certainly be the goal there. We've had a lot of interest in the T regulatory space from potential partners. And so I think we continue those conversations and thinking forward as we want to have optionality for how we develop the pipeline. So that's the way we're thinking about the immunology space. Great. Thank you both for joining us. Yeah, thank you for everyone for attending. Thank you, Eliana. Great questions.