Hey everyone, we're back. Happy to have Jonathan Zalevsky here, Head of R&D at Nektar Therapeutics. Maybe Jonathan, if you want to give a quick company overview and then we'll get into the Q&A. Yeah, hey Alex, nice to be here today. Thanks for the invitation. Really briefly, at Nektar Therapeutics, we're focused on immune science and we're focused on really addressing, in particular, the focus of regulatory T cell biology and its application as a new way to approach treating autoimmune and chronic inflammatory diseases. I'm very excited to be here with you today. Yeah, I think maybe to kick things off, because I want to spend the majority of the time talking about atopic derm, can you just give us a quick primer on the role of Tregs in atopic derm and sort of part of that disease pathology? Yeah, sure. Tregs are a normal part of the mammalian immune system. We have loads of them in us, and they really serve to hold back and regulate kind of inflammatory processes that are uncontrolled or unwanted. One of their main functions is to maintain something called peripheral tolerance, which is different than this thing called central tolerance, which is a deletion mechanism that happens during development. Peripheral tolerance really keeps back things that might be anagenic from being harmful, and Tregs serve that function. One of the issues that we have with many autoimmune diseases is that Tregs are necessary for maintaining that balance so that you don't get the autoimmune disease, but for a variety of factors, they stop working well, and then the autoimmune disease presents itself. It's a whole new way to approach the treatment of autoimmunity by bringing back that population of regulatory T cells, letting them do that natural work that they were supposed to be doing for you anyway, and then bring back the balance to the immune system so that to quell, you know, whatever was driving the pathology of that autoimmune disease. In atopic dermatitis, we've actually published some seminal work from our phase 1b study where we evaluated ResPEG as a key regulatory T cell inducer in patients and not only demonstrated dose-dependent efficacy while we were treating patients with ResPEG, but this profound control of disease after we stopped dosing. In fact, we saw maintenance of disease for six months after we stopped treatment, and it really wasn't a PK effect. I mean, the drug only has a 10-day half-life. The concept here is that by bringing back the regulatory T cells, they've addressed what were the major immunological deficiencies that the patients had that were driving the disease. Even if you withdraw drug, even for an extended period of time, you still are able to maintain control over the disease pathology. All very exciting things and things that started to establish a new paradigm for treating these kinds of skin diseases. For ResPEG specifically, where do you differentiate versus other IL-2s that have made varying degrees of forays towards immunology? Yeah, I mean, when we designed ResPEG, we took a completely different approach in the discovery of the molecule. I mean, we knew about the structural biology that was done in X-ray crystallography and mutagenesis studies that had really mapped out some of the receptor ligand contacts. We knew that what was most important wasn't just the receptor contacts, it was the actual in vivo phenotype that we needed to achieve with the potential treatment. When we identified ResPEG, which is a molecule that we called NKTR-358 before it became known as ResPEG, it was done by an in vivo phenotypic screening approach. We designed a number of different polymer-conjugated IL-2s. We injected all of them into mice, and we studied the on- and off-target effects, the Treg mobilization, and multiple other parameters all at the same time. We actually selected the molecule that had the best properties and later learned that what was so crucial to its biochemistry was that it was a full agonist of the IL-2 receptor. It was attenuated, which was important, so it doesn't oversignal onto the Tregs. It actually has this ability to occupy the IL-2 receptor and maintain a durable level of signaling for a very long duration of action, which is fundamentally different to how normal cytokines and interleukins work. They're designed for short high pulses, whereas we've created the ability to occupy IL-2 and to not oversignal for very long periods of time. Compared to the earlier approaches that really involve mutagenesis, they were really designed by that sort of first generation approach, high potency, high selectivity, but then they struggled to maintain durable dosing for months and months and months on end. ResPEG as a full agonist really achieved that. Now you've seen that in multiple studies. We have over 1,000 people that have been exposed to ResPEG. We've seen consistent PK and PD across nine completed clinical studies and two studies that are ongoing. We've seen consistent pharmacodynamics for Tregs. Now, of course, we've seen numerous examples of efficacy, particularly around skin diseases. Yeah. Obviously you've put out top line data from your phase 2b a few months ago now in atopic derm. I think I want to talk about the design of the trial, but I also want to talk about the execution. Maybe if you could touch on sort of the overall design, and then we can talk about the thoughts around maintaining a low placebo response in this trial population as well. Sure. Yeah. We designed the study almost like a carbon copy of the phase 1b study, except with a much, much larger sample size and a bit longer duration of dosing, at least for now, with ongoing dosing through a year, quite a bit longer. This study had 400 patients, just under 400 patients that we enrolled, 393 that were in the ITT population. It was randomized 3 to 3 to 3 to 2, for three dose levels of ResPEG, 24 microgram per kilogram and 18 microgram per kilogram dosed twice a month subcu, and 24 microgram per kilogram dosed once a month subcu or placebo over a 16-week induction period. The patient population were biologic-naive people with moderate to severe atopic dermatitis. They had to have at least the IgA, a validated IgA score of three for moderate, an EASI score at baseline of at least 16, and they needed to have 10% body surface area skin involvement of disease, as well as an active diagnosis for over 12 months. They had to be no longer controlled by topical corticosteroids or any topical medication. This is really the population that is the next candidate for treatment with a systemic biologic, right? For example, the other key elements are that the primary endpoint was the EASI percent change from baseline at week 16, and that was a continuous endpoint. You measured all of the time points over two-week intervals, and then the key secondaries. We're talking about atopic derm, right? Not alopecia now? Sorry about that. Thank you for that. Yeah, the EASI score. The other key secondaries were the responder rate, such as EASI-75, as well as the validated IgA atopic dermatitis score, the itch response, and so on. It was really a study design that was informed greatly by the phase 1b, where ResPEG showed such consistent efficacy, and that completely replicated, if not extended, those findings in the 400 patient phase 2b. I guess maybe I'll ask you to, you know, how would you place these data into context with the broader atopic derm development or treatment landscape today? Yeah, I mean, I think that the approved, you know, medicines are the IL-4, IL-13 class. We have three examples, you know, Dupixent, Adbry, and Lebrikizumab. Those are really all in the same, you know, kind of pathway. They're not exactly the same. One's a ligand blocker, others are different kinds of receptor blockers, but they do have very similar trends. They have similar sort of kinetics and rates of their disease control, and then they have kind of set a kind of a standard of care threshold, right, for activity. It's important to note though that in the real world and in the clinical setting, those are quite different, right? Both the good effects of the drug, like the durability of the effect, the stability of the efficacy, and the EASI-75 and IGA rates, they do change in the real world versus the clinic, as does the rates of some of the kind of adverse drug reactions like conjunctivitis for that class. Overall, you know, that represents a very significant advance for patients with atopic dermatitis. You can see that reflected in the success, you know, of these agents. These are really large markets with very large addressable patient populations. These are blockbuster, you know, drugs, all three of them. Now what we are really seeing is that as we see in many autoimmune disease indications, new mechanisms can really, really help and can push that. It gives patients more opportunities, new mechanisms, you know, different options for both physicians and patients. Also there's opportunities to differentiate from the existing standard of care, whether that's by driving the deepest efficacy, whether it's by having, you know, prolonged periods of disease control, like remitted potential, really not something that you've seen in this field. All three classes of IL-13 drugs are drugs that require continuous dosing. Drug interruptions or holidays with those or with JAK inhibitor classes causes a rebound. There's a very exciting opportunity for new mechanisms. We have two examples of phase 3 programs now from the OX40 class, the receptor and the ligand. What do you make of the amlodipine data now? I think it's, you know, their results probably softened a bit relative to what they were hoping to see based on phase two. I mean, they really didn't change their dosing paradigm, right? It's the same dose that was the most successful in phase two was what they advanced into the phase three study. Their phase two study was kind of dominated by a geographical region. Maybe they're seeing the effect of what we see sometimes in phase three. When you really broaden out the region, the different countries, you start to see some impact. What I do think is important as well, maybe this doesn't help some of the commercial aspirations for that class. We can't deny that those were two very positive studies. I think Sanofi knows this space incredibly well. I mean, they are the leaders with Dupixent. They clearly saw a very important opportunity with OX40 ligand, and I don't see them backing off of that program. I think they will really, really effectively advance it into approval in the future. One of the signals that you also showed in your study from a safety perspective was injection site reactions. You know, given the fact that it's a pegylated molecule, like one, was this expected? And two, is this something that is going to be an issue for you moving forward? Yeah, so firstly, this is something that's been known for IL-2 for a really long time, going back to the 1980s when some of the first subcutaneous administrations of IL-2 were done by the NCI and others. It's been a known thing. One of the things that was important for us in studying this was in our study, really collecting data that allowed us to understand the frequency of these ISRs and how much they have an impact. Firstly, it's really a local reaction, right? This isn't like a systemic, you know, an ITIS or anything. This is a local tolerability effect. What we saw, because we report always adverse events on the patient level, we saw about 70% of people have one or more injection site reaction. That's across 320 people that were treated with ResPEG over the 16-week induction. However, we also saw that about 60% of people had two or fewer occasions of an ISR. That means that even though on, let's say, a Q2 week regimen, you actually took eight drug administrations, for the vast majority of people, two or fewer times you had an ISR. These are really transient. They resolve on their own. They're self-limiting. They're mild to moderate in 99.6% of the time. They don't lead to discontinuations. I think we report only two people or 0.6% had a discontinuation due to an ISR. They primarily present as an erythema, as like a pink spot. They're primarily asymptomatic with any other features. They tend to go away on their own. We also find that their frequency tends to be the highest at the beginning of treatment. As people are on for longer periods of time, they stop experiencing them as problematic. They come and go on their own without the need for intervention. That's sort of the state now. In the future, we have multiple mitigations that we're applying. We've been studying the mechanism with additional scientific detail to understand the signaling pathways that could be responsible for driving those locally in the skin. Also, we are developing an autoinjector. We also intend to launch the product as an autoinjector device, which will really standardize the drug administration process and take away that kind of variability, wet needle, and other elements that also could be contributing to those now. We feel very excited that we have a completely different profile that ResPEG provides. Having local tolerability as the most frequent issue is actually quite good comparatively relative to systemic adverse events and viral reactivations or infection risk and other things like that. sense. You'll be at the American Academy of Dermatology later this week. What more, if anything, should we expect beyond the top line presentation of the 2B? Yeah, there's two additional pieces of data that we'll be covering in the presentation beyond the June top line. The first are patient reported outcome secondary endpoints. As you can imagine, we had such a profound and rapid effect on itch. You can imagine how that has such an impact on quality of life, how much that could impact the other key patient reported outcomes. That'll be one set of data. The other is this interesting observation that one of our KOLs, Dr. Jonathan Zalevsky, made in our June presentation. When he was asked to comment on our results, he said, I don't really know where this drug plateaus. We've seen dosing from 12 and 16 weeks, and the curves are still going. Yeah. They haven't reached a plateau. How do we get, you know, some more information about that and where is the actual efficacy profile, right? The week 16 report is sort of like a time point, you know, when you think about it. We have this, if you remember our study design, all the patients that reached week 16 that were not EZ50 had the option of entering into an escape arm, which was the high dose of ResPEG, 24 micrograms per kilogram, dosed twice a month. Excuse me. Within that patient population, when we showed the patient disposition, we showed you that a unique subgroup are the placebo patients that took the placebo during the induction and did not reach EZ50. That population of 42 people crossed over onto the drug arm. The maintenance period is a 36-week duration period. That unique cohort allows us to look at continuous up to 36 weeks of treatment. That is an ongoing cohort. At our earnings call, we gave an update that by now half of the population has crossed 24 weeks of treatment. We're excited to present some data that look at the potential of deepening responses with increasing treatment. We've shown a 16-week endpoint in June, and now we have the opportunity to look at extended duration dosing and the potential for deepening of responses. That's a component of the presentation later this week. That's something we're very excited to present. Great. You're going to have longer-term maintenance data from the full 2B population in the early part of next year? Yeah. In this study, in the first quarter of next year, the next main catalyst is basically all the people through study week 52. That will include the 36-week extension, which for people EZ50 and higher is the maintenance period. These are the people on once a month and once every three months treatment. All of the escape arms, which are all the people that did not achieve EZ50, the placebo arm, which will be featured later this week, and the other arms as well are included. It is really a rich data set and multiple catalysts continuing from the study. One year later, in the first quarter of 2027, we'll report another catalyst, which is the long-term off-drug, remitted follow-up period of the study. There we'll look at a year of treatment followed by a year off-drug. We believe that there's a great opportunity to replicate what we saw in phase one. Our other critical catalyst for ResPEG also comes in December of this year. Yeah. Exactly. There's the SALT score. Yeah. We've been running this phase 2 study where we enrolled over 90 people, in the 3 to 3 to 2 randomization, two dose levels of ResPEG, 24 and 18, twice a month versus placebo. Here people will take nine months of continuous therapy. In December, we'll read out the top line. That'll be all of the people crossing that nine months or 36-week treatment time point. We'll be looking at the SALT% change from baseline. Our patient population there are all severe to very severe. SALT 50 is severe, and then 95 to 100 is the very severe. We're at roughly, you know, about between a third and a half of our population is in that very severe category. Really, a very high unmet need patient population, you know, most people have almost complete, if not complete baldness. Very exciting study for us. There's really a lot of really strong translational data that puts Tregs central, both into the disease of alopecia, but also into the hair growth cycle, maintaining the homeostatic environment for hair stem cells by giving them the delta ligand that they need for their notch pathway signaling. Really something that we're very excited about. This has always been one of our lead indications for a Treg mechanism. I guess maybe my last question on that is just what does good look like for you to move forward, in alopecia? Yeah, this is a very interesting indication. There's no biologic proof, right? We have multiple JAK inhibitors and the pros and the cons that the JAK inhibitors bring. Rinvoq just posted some very exciting phase 3 data, but you're still left with the same challenge. If you're a patient lucky enough to have grown hair, if you have to stop your JAK, you will lose all your hair, right? We've seen that with very high consistency with that mechanism. It's highly symptomatic, but it does not fix the underlying pathological problem the patients have. Now for us, because there's really no benchmark, we're focusing on the standards of care. Low dose and high dose JAK are two key benchmarks for us. Low dose, for example, for SALT% change from baseline, about 30% for low dose, about 40% for the higher dose. Those are example benchmarks. We need to be, we could be actually in any range because again, we're a biologic with a completely different profile, but we'd like to use an anchor to those because those are very straightforward for metrics. We've had the chance to test a number of TPPs for alopecia. Really being a novel mechanism that doesn't have a black box is very highly resonating with both physicians as well as with patients. We were also even surprised to find that taking daily pills for chronic use is actually tested less desirably than a once or twice a month injection. Actually had better compliance. The fact that missing a couple of days of pills puts the patient in a potentially shaky condition, hair can start thinning very quickly, whereas that wouldn't be the case with a mechanism like ResPEG. Something that's very exciting and could definitely substantially add to the ResPEG profile. Okay. JZ, I think we're out of time. Always a pleasure. I would love to spend some more time talking about TNFR2, which I know you loved as well, but we'll have to do that another time. Thanks, thanks Alexandra. Have a nice day. You later.