Good afternoon, everyone, and thank you for joining us on the third day of the Needham Healthcare Conference. My name is Gil Blum, and I'm a Senior Biotech Analyst here at Needham & Company, and I cover the cell and gene therapy space. It is my pleasure to have with me today Nadir Mahmood, President of Nkarta, Inc. Maybe a good place to start, for those who are a bit unfamiliar with the story, just walk us through the company's technology and maybe frame the pivot you guys made into autoimmune disease. Perfect. Well, thanks for having me, Gil. It's a pleasure to be here and participate in this fireside chat. Nkarta is an autoimmune disease company. Our lead program is a CD19-directed CAR-NK natural killer cell that we are developing for autoimmune diseases for people living with B-cell-mediated autoimmune disease. As you mentioned, we pivoted into the autoimmune disease space because, like many CD19 CAR cell therapy companies, we were in the oncology space to start. In fact, we had a program, both CD19 CAR-NK in non-Hodgkin's lymphoma, and we had an NKG2D-directed CAR-NK in the AML space. I think like many folks, we were impressed with the incredible transformative potential of cell therapy in autoimmune disease when Georg Schett's paper first came out, really showing the incredible possibility of driving an immune reset and potentially multi-year drug-free remissions in these individuals with SLE. There were a couple of features that were particularly interesting from that publication and from those early insights. The first was one of the key features of NK cells is that these aren't long-lived cells. These are allogeneic, these are off-the-shelf, they're available on-demand, and designed to be accessible for patients when they need them. There's no apheresis time between identifying a patient and then getting the cells. The cells are available as soon as the patient is ready to be dosed at the clinical site. The fact that NK cells have a finite lifespan when you put them in of a few weeks means that what we have to do is administer them at therapeutic doses. What you put in is eventually going to be probably the highest dose that the patient will see before the cells start fading and exhausting over time within a few weeks. What was interesting, particularly about this data coming from the early Schett publication, was that it looked like to drive this deep B-cell depletion and immune reset, you only needed early activity against B cells to bring that B-cell burden down. From a pharmacokinetics perspective, it lined up really nicely, and that was one of the challenges in oncology. Because in oncology, it looked like the tumor burden and the B-cell burden associated with that tumor was so vast that you needed a longer-lasting, more persistent cell type that probably had more dramatic in vivo expansion to get to therapeutic doses. That was one part of it. The other part was just the overall safety profile in an autoimmune disease versus in the oncology setting. I think the rheumatology community in general is probably more conservative than, say, the oncologist. Many of these patients are not facing immediate life-threatening situations. Over time, obviously, a chronic disease will wear out and can have challenges in terms of mortality. At least for these types of patients, there is a very different calculus being analyzed by the rheumatologist around the risk-benefit ratio. When we look at the historical data around NK cells and our own data of over 30 patients in non-Hodgkin's lymphoma with the CD19 CAR T or the CD19 CAR-NK, NKX019, we really felt like we have a favorable safety profile here with no life-threatening CRS, no ICANS, that lends itself maybe very ideally suited for an autoimmune indication like that. We're taking this program, it's got the CD19 CAR, it's engineered with a membrane-bound form of IL-15 to enhance its persistence, and we are now testing it in a variety of autoimmune disease indications. Maybe a broader question. Investor sentiment around cell therapy in autoimmune disease has softened. How would you respond to some of that narrative? Yeah, I would say we're starting to see it maybe pick up a little bit from some recent data. I would say in general, yeah, it softened. I think there's a couple of things at play there. One is there's always exciting new things coming out, whether it's a T-cell engager or an in vivo CAR approach. I think a lot of the promise of new modalities and the potential that they may have, I think creates excitement, and capital often starts shifting direction. I think the main thing really is we haven't had a lot of data in the autoimmune disease space, not a real meaty set of data that you can dig into and say, "Okay, this is a large number of patients with sufficient follow-up that's going to show me that this is really commercially positioned in the autoimmune disease space for this patient population." I think we're starting to see the maturity of some of the data sets now, and we expect to see that throughout the course of 2026 as we come up on conferences like EULAR, ACR, et cetera. I think that's been the main thing is like, show me with data, because a lot of those data for the allogeneic approaches didn't pan out in oncology the way that people had hoped. Maybe a little bit now. Allogene had some real nice data earlier this week that looks like folks have gotten excited about. I think there's opportunity there with data to get investors geared and excited about the story. I do want to challenge that position a little bit. We've been talking about cell therapy and autoimmunity for a couple of years now. The dearth of data, why? Is this a lack of investment? Is it a lack of patients, enrollment, or just a lack of efficacy? I think it's really been a lack of, call it meaningful data sets, like large, robust data sets. What we've seen are mostly five, six, seven patients with a few months of follow-up, which I think is important, and those are meaningful in the sense that they can give you early confidence that you've got a program that is headed in the right direction. But very few have seen and have the data set like a Georg Schett, where there's 30 patients, many of whom are several years out in drug-free remissions, right? This is someone who was thinking about the space maybe close to 10 years ago at this point. When he first started spinning his ideas and getting his trials up and running. I think some of that has created a bit of a benchmark as well in terms of what we expect to see. That's a single academic center, very careful, thoughtful patient selection, to get his near 100% complete response rate in these drug-free remissions. The fact I think part of it is, as we do company-sponsored trials, or these are going to be multi-center trials, more heterogeneous patient populations. I think some of the lack of investor excitement early on was probably because these six to eight patient data sets were not 100% response rates. They were in the 70s and 80s, which is still pretty amazing for this patient population, but I think there had to be a bit of a reset around real-world expectations and how we go forward with a potential commercial program. I would probably add that, in some ways, Schett is both the progenitor and the bane of this industry, just because when you run a clinical study, an FDA-sponsored clinical study, you're going to start with the toughest patients, not the easiest. Yeah. I think that might be missed on some investors. That's a great point. Yeah, that's true in oncology. I would be surprised if it's any different in autoimmune disease. No, you're right. Oftentimes, these patients have failed a lot of other therapies, failed biologics, right? Some cases, they've already seen a B-cell depleter, like a rituximab or something, and failed it. You got to catch them at the right point in time, and it's going to be very different what patient population we see in our trials versus what he is able to probably select more carefully, at least early on. I feel this is kind of a silly question because we're still ahead of any commercial launch in any of these. Do you think rheumatologists' attitudes towards lymphodepletion have changed just because of all these companies in the cell therapy space? Our experience has been, yes, that has changed. I can walk you through what our experience has been. When we started this trial, our IND had lymphodepletion in a modified form, where we were using cyclophosphamide and no fludarabine. Right? Traditional lymphodepletion and what the Schett-Erlangen group has shown, all those studies were done with cyclophosphamide and fludarabine. Early on in our conversations, as rheumatologists were looking at this space and starting to hear some of the positive feedback from what folks had seen at conferences from the Schett presentations and publications was that, "Well, this could be really transformative, but I don't know about this fludarabine agent." We're like, "All right. We'll make it easier. We'll remove fludarabine. Maybe we can get what we need with the cyclophosphamide." We ran that experiment, and the patients we dosed, we did not see the level of B-cell depletion that would give us confidence that we would drive an immune reset that could lead to these remissions that we want to try and achieve. Interestingly, it was a couple of the rheumatologists in our trial that came to us and said, "You guys really need to go full lymphodepletion with fludarabine. We've seen the data. We've done trials in the autologous CAR T space. That is where the bolus of data is today." This is probably going back a year and a half now. What we see is to give our patients the best chance of success, you need to maximize the B-cell depletion, and fludarabine and cyclophosphamide is part of the regimen that gets us there. These aren't chemotherapeutic doses. These are sub-chemo doses. Start, if you want to try and give your patients the best shot, this is what you need to do." We actually made the pivot last summer, and we went back to fludarabine and cyclophosphamide. We can still give cyclophosphamide if a patient's cytopenic, but the main regimen really is with fludarabine cyclophosphamide. Frankly, I think our enrollment has picked up since we made that switch, so we think that the rheumatology community is embracing it. Even in the community settings outside of the specialist cell therapy centers, we've seen that uptick, and we've seen rheumatologists without a cell therapist administer both the flu/cy and then our NK cell regimen. But- Sorry, to add to that, now we can also, on your earlier panel, our CEO mentioned we can now move to outpatient dosing. For us- I want to spend a second on that. I think that's a really important point to emphasize. Cell therapy in general, CAR T variety, and also the T-cell engagers, have very strict requirements for follow-up because of CRS and ICANS. It seems that NK cells are moving away from that paradigm, and you can elaborate as to why. Yeah. The beauty of the NK cell approach, and this is the challenge in oncology, but appears to be the benefit in the autoimmune setting, is we don't see this in vivo expansion. For us, phase I is truly dose-finding to find that therapeutic dose. We put in the therapeutic dose, which right now we're dosing 4 billion cells given 3x for a total of 12 billion cells given to a patient over the course of a week. When you don't have rapid expansion in vivo, you're not going to see the CRS and the ICANS. That was our experience in oncology. When we went to FDA to propose moving to outpatient, now they're going to look at our safety profile to help adjudicate how comfortable they are with that. We now have agreement with them that we can start moving outpatient. The safety aspects of NK cell therapy, I think, are one of the really unique features that helps position this therapy in a really interesting way, where we believe we can drive, and the data will show this hopefully, as we announce that later in the year, that we can get to those CAR T-like responses, but with a safety profile that gives you the convenience and accessibility of a large molecule. I think that's where we can not only differentiate the CAR NK approach from all the CAR Ts, but also from some of these other modalities that still rely on in vivo T-cell-based activation. Maybe to fill in that point a little further, you mentioned this. You have now rheumatologists running their study on their own, basically? Yeah, we don't need to be, and we haven't been limited to your traditional cell therapy centers. We have rheumatologist sites that can do this without a cell therapist. They just need an infusion chair, and they can be trained to do this. This was actually a pretty significant debate point early on in this space because you have to always partner with an oncologist. Yeah take their beds, and they would take your patients. Yeah. I think that was a challenge early on for a lot of folks was, these are oncologists that control the cell therapy centers at these sites. I think I ran into, at the poster session at an ACR last year, there was a poster from one of the large medical centers, and it was a poster on these autoimmune diseases. I said, "Okay, so what's your role in this poster?" He said, "Oh, I'm a hemonc by training, and I'm presenting this on behalf of this group." I was like, "Oh, so if I'm a rheumatologist or a neurologist, say, if I want to look at MG or MS, how do I do this trial at your center?" He's like, "Well, we have a cell therapy committee, regardless of the therapeutic area or indication." I was like, "Okay, who's on this committee?" He's like, "Well, me and a bunch of hemoncs like me." I said, "Okay, so everybody is an oncologist on this committee, and if I'm a rheumatologist, I have to come pitch that you should give up and utilize some of your dedicated space for my trial." He said, "Yeah, I can see how that looks, but yes, that's basically how it works." I think that's the reality, is a lot of this is managed by the hemoncs, and they have great experience with this, but when you have a convenient therapy that can be administered like a CAR-NK, I think you can move away from that. That is really what we want to do because there's only so many autoimmune disease patients that you can see in these large medical centers. Many of them live outside the city, and not everybody's going to be wanting to give up and put their life on hold and their care partner's life on hold for a month or several weeks to go spend that time in the big city or near the large medical center for this care. If you can come in to your community rheumatologist clinic and get sit down and get your 30-ish minute infusion, and then have a two-hour observation period, and then go home, go back to your life, I think that's where the potential for this type of approach really lies. Every rule has some level of exception. We saw some data from Rui. Remember these guys that are similar to you in some ways. Yeah. That suggests low but non-zero rates of low-grade CRS for NK therapeutics. Do you see any threshold where this becomes a problem, just given ultimate expectation of community use? Yeah. Interestingly, I think what we have become used to as a cell therapy community is calling any fever, any low-grade fever, CRS. What does CRS mean? Cytokine release syndrome. You can have a fever and no elevation in cytokines. Is that truly CRS or is that infusion-related reaction and fever that can be managed with some Tylenol? Our experience and what our experience was in oncology, and obviously what FDA is starting to see as they let us move into the outpatient setting is, this isn't the CRS that would require a complex monitoring or intervention. I'm pretty sure, or my guess is that's probably what Ruby saw as well, was more of these infusion types of reactions. I think a lot of folks still continue to characterize these as CRS. Frankly, as a field, I think we need to move away from that because if you don't see increase in TNF, you don't see an increase in IL-6. Are you really having cytokine release syndrome? Yeah. We don't see what we've seen in the NK space as a barrier to enable this. Maybe from a product point of view, another interesting feature of NK cells, potential for redosing. This is a broader question. A, how do you view redosing? Where would you time that? Secondly, if redosing requires another round of lymphodepletion, is this practical? Yeah. Redosing is actually something that we now have, as an option if we need it in both our studies, in INTRUST-1 and INTRUST-2. The way we see redosing is part of the flexibility and potential convenience of an NK cell approach. It could be in the context of a relapse after a certain amount of time. Certainly, if a patient is relapsing, worst case, within a couple of months or something, I don't know if that necessarily is the way we want to think about this as a treatment paradigm. We think about this several months, a year plus down the road. If there's a relapse, you can go back in. I think if you're able to get a year or more of remission with a cycle of NK cells, then the lymphodepletion equation, I think, still makes a lot of sense in that context because you're still off the immunosuppressants. You're not on some high dose. Maybe you can manage some low-dose steroids. I think for this patient population, shifting away from the chronic administration of these immunosuppressants and steroid drugs that are going to have these long-term effects to get an infrequent, occasional cycle of lymphodepletion and cells that keeps you in a remission state for an extended period of time, I think that's feasible. In oncology, we used redosing in a couple of different ways. We had patients that relapsed who we redosed and drove them back in a complete response. We also had patients who had a partial response, and so we gave them another round of NK cells for lymphodepletion, and that drove them into a complete response. It's flexibility, and I think it's going to depend on the patient, their situation, the clinician, the comfort, what other options might be available for the patient to ultimately get there. I think it's another tool that we have to use to maximize potential benefit for a patient. I do want to spend a second on manufacturing. Maybe put for us in context how easy or difficult it is to make the kind of doses that you make as it relates to costs, and let's say compared to, I don't know, a regular CAR T, a biologic, and maybe something IPSC-derived. CAR-NK, we've got the engineering. These are not engineered cells. We definitely have an engineering step where we use a retrovirus to transduce the cells. Your cost here is order of magnitude different than your traditional bespoke autologous CAR T. That's one of the inherent benefits of utilizing an allogeneic approach. Within the allogeneic space, you're going to have gradations. IPSC, probably close to the very low end of that because you have a single master cell bank that you can expand out and get tens of thousands, maybe more doses out of that. I would say ours is probably somewhere in the middle at these higher doses. Definitely a lot more like a traditional biologic in terms of cost. As we've gone from 1 billion to 2 billion cells per dose to 4 billion cells, we continue to try and optimize the process so that we can have the best opportunity to have, call it pricing flexibility and optionality as we think about what the commercial opportunity looks like for this, both in terms of yield, because we need to be able to scale sufficiently, but then also, how is the world going to view pricing for an autoimmune disease versus an oncology therapeutic? Making sure we have sufficient room to maneuver there. My guess is, if you have a biologic comp and people need to be on it chronically, you get an idea for a number per year. I think that's pretty fair. Yeah. I think that's a strategy we've seen at least for a few other companies. Yeah, exactly. We're not talking chronic dosing here. Yeah. Another topic that we should spend some time on is the clinical studies that you are conducting. Pretty broad family of indications you're looking at. I don't think you have a current winner, so to speak. Also you had a bit of an update this morning, so maybe if you can set the stage as to what indications you guys are in and timing, any updates that you can provide on clinical development. Yeah. I'll start with what we currently have in terms of indications. We have two company-sponsored INDs. The first one is INTRUST-1. Those are our nephrology indications, so lupus nephritis and primary membranous nephropathy. The second IND, company IND, is INTRUST-2, and this is more of a basket study. This has systemic sclerosis, myositis, ANCA-associated vasculitis, and we just announced today that rheumatoid arthritis has been added to this IND as well. We have two investigator-sponsored trials, so we work in collaboration with academics. The first is in systemic lupus, and the second one is myasthenia gravis. It's a number of indications right now, because what we want to do is give ourselves multiple shots to see, one, where do we see the strongest, most compelling data? Two, how do we continue to make sure that whatever indications we see a compelling data in, we can actually move quickly to the next stages of development so that we can continue to generate and create milestones for the company as we move forward. As we look at the totality of the data coming across all of these indications and all these studies, we are planning to give our initial data update later this year, which is going to focus around, here's the data that we've seen so far, but also, here's the indication or indications where we are going to focus our efforts going forward. Our plan is not to take all these indications into the next stages of development, where we're not going to be doing five or six registrational trials. We're going to narrow this down to one or two indications and the regulatory path forward for those when we show our data later in the year. That's really how we're thinking about taking this current lot of indications and focusing. Let's say one challenge that at least I've had in covering this space is defining what good looks like in autoimmune disease. You're probably aware of this, but there's a salad of different metrics depending on which indication you look at. Yeah. At least one thing that I've tried to focus on, and I'm just wondering if the FDA thinks about it the same way, is it like a PFS, shall we say, way of thinking about the data? How long does a patient stay off treatment once they receive one of these? I don't know if this is something you guys talked about with the agency, or is this something you're seeing? I think the way we're thinking about it is, initially at least, a first data update is not going to have the ideal long-term follow-up, right? Unless we're waiting for even longer, most folks aren't going to give you a minimum of 12 months of follow-up, right? You're going to have a few months. When you start there, and you look at those data, you have to say, one, from an efficacy perspective, are we seeing endpoints, even early indicators moving in the right direction? You need to see that in terms of clinical activity. The second part is, what are we seeing on the translational side that we can use to give ourselves confidence that the durability of this early response that we're seeing is going to last and play out longer term? That's where I think things like looking at the amount of B-cell depletion, the immune reset, the class switching that happens, then starts building upon a data set where you can start making some comparisons to, say, Schett-like data to say, "Okay, at least I'm seeing the signs in these different areas." But ultimately, I think what regulators are going to want to see, certainly at the time of a registrational, is longer-term data. I don't think we know yet what that minimum timeline is. What we're thinking, and ideally I think what we'd want to see is 12+ months of not necessarily drug-free remission. I think even low-dose steroids. If you talk to Schett, he's gone in these drug-free remissions and actually given occasional low-dose steroids to keep people from flaring. Something where at least they come off the immunosuppressants and can be managed more carefully. I think that getting out to that many months, I think can be pretty compelling and transformative. Certainly possible that you can have, with a redosable therapy, you could see it shorter. You can go and redose. Again, I think it comes back to the question you were saying earlier. If that redosing does include lymphodepletion, then how quickly do you want to go back in, right? I know we touched on this earlier, but I do want to get back to that topic again. Have you guys faced any challenges in enrolling these studies, and how has that evolved over time? Well, I think we definitely faced some challenges early on in the space as, one, there's just a flood of companies going to largely a lot of the same sites and investigators and the same indications, right? At the time when we started, like I mentioned before, we were cyclophosphamide only. We were doing this without fludarabine, and we definitely saw a pickup in enrollment as we pivoted from Cy only to flu and Cy together. I think the other part is as data have emerged and more rheumatologists are seeing the continued benefit of cell therapy in these indications, I think they've gotten more comfortable. A PI, a KOL at a big academic center, the way they work and the reason that they are who they are is because they've gone and tried these novel ideas and modalities. They've been one of the early adopters. There's only so many of those that you have in these indications. If you really want to enroll, you got to move outside of that. I think that's where it took a little bit of time for some of these rheumatologists just to get comfortable to where they were willing to do this. Some of these sites early on, to be honest, the rheumatologists didn't even know who the cell therapist was in their institution, and so they couldn't even give a cell therapy until they had buy-in and a plan with their cell therapist. We honestly, in some cases, we did some matchmaking, bringing the cell therapist and the rheumatologist together, and they're like, "Oh, you're in building such and such in the clinic." I'm like, "Yes. Now it's time for you guys to work together to find options for all these autoimmune disease patients. I think we have hopefully gotten past a lot of that. I think part of what we're excited about is we've been able to go into these community settings without needing a cell therapist, have the rheumatologist do this, even with the overnight 24-hour monitoring, which now, once we get the amendment through the IRBs, the sites won't even need to worry about that. I think then you're unlocking a whole different population of rheumatologists that can administer. Yep. That's fair. Maybe kind of looking broadly at the competitive landscape. I know we're all friends here, but who would you consider your closest competitor or most relevant competitor? I'm just thinking of Rui, for example, right? That showed about 70% durability at 12 months. Do you think this is the bar that we should be looking at? Yeah, I think Rui is a great example. For folks that don't know, this is a private company in China with a CD19-directed CAR-NK. In terms of a comp for a program, it's probably the closest out there. The way we view those data that they've put out, that they presented at EULAR last year and then was subsequently published, a subset of that in The Lancet towards the end of last year, we think that should provide confidence to us, and we believe it does to get us excited that we've got something where the closest program out there has had some pretty amazing responses. Whether we hit that bar or we come close, I do think the expectation is probably to be around what we've seen from the autologous or from Ruby, 70%, 60%, maybe somewhere in that range, even a little bit less, I think is hugely transformative for this patient population. Especially if we can give this relatively safely in an outpatient setting with that flexibility of redosing, I think that just gives us a lot of room to operate in terms of what we expect in responses. Ruby definitely. Another company I think you cover, Artiva. They're an NK cell company, are really interesting with a non-engineered NK, so you don't have the CD19 CAR, but they have to give it in combination with an anti-CD20 monoclonal antibody. They're working in RA. I think, if they have great data, I'm excited because I think if their data look good later this year, then I think that continues to show positive momentum for the NK space. We are differentiated in that ours is an engineered NK. We don't need to give it with the monoclonal antibody. That possibility, I think, makes us pretty compelling. Then I would say anybody that's kind of targeting B-cell depletion, at least using a cell therapy to some extent. If it's an autologous product, the question will be how much can they move away from the cell therapy centers, and how broad of an autoimmune disease population can they access? I think that's again where an accessible off-the-shelf therapy like a CAR-NK can continue to show that it's differentiated. One bit of feedback that we get sometimes is that, why do we need these cell therapies? We can use a bispecific antibody and get the same effect. How do you counter that sort of argument? Yeah, I think the bispecifics have an interesting value proposition. They sort of were pitched as an off-the-shelf option. Still not a lot of data out from some of those studies. In fact, I think if you look at some of the early studies, then even in RA, those responses were not that compelling. You still have a pretty severe CRS profile that probably is going to limit. There's a lot of chronic dosing. Some of these next generation bispecifics sort of try to engineer out some of the side effects by managing the affinity to the target. The question is that going to give you enough of a clinical response, and can you achieve that without having to dose higher, which then could reintroduce some of these toxicities? Do you have to dose it more frequently, in which case, are you impacting the convenience factor of a bispecific versus a cell therapy? I think it's early days. There's a possibility that in different indications, different patient populations, there's an opportunity for all of these players. All right. Maybe a couple of last items just to remind everyone, cash position and runway. Yeah. We ended 2025 with just under $300 million in cash, and that gets us runway into 2029. For us, 2026 is focus, execute, get to data, show that we have a program that we're excited about taking forward and what the regulatory path and development path potentially looks like, and would still have plenty of runway, a couple of years at least, on the other side of that update. We believe that creates a lot of opportunity here for value and getting to meaningful milestones. We can focus on operating the company and getting to data, not having to worry about raising money right now. It's a good position to be in, and we feel privileged to be in it. Maybe last items that you want to share with investors or anything that we missed that you would like to emphasize on last time? No, I think we had a pretty robust conversation as we always do. I think, final takeaway is with the announcements from today, I think we take the next step as a company, as a program, to really enable our vision of giving autoimmune disease and patients living with these diseases a new option for treating these in a potentially transformative way. I think there's incredible data from all the cell therapy work that's happening, all these new modalities. But for us, it's how do we continue to position ourselves as a really exciting, compelling option for people with autoimmune disease and their clinicians, and I think being able to go outpatient with this therapy and hopefully showing folks later this year with our data that this is truly something transformative for patients. We're excited about what's to come. Excellent. As always, Nadir, thank you for attending. Thanks, Gil. Pleasure.