Back to the 46th annual TD Cowen Healthcare Conference. Marc Frahm from the biotech team here at TD Cowen. We're really happy to have with us now for the next session from Nektar Therapeutics, Jonathan Zalevsky, the Chief R&D Officer. The plan is Jonathan Zalevsky is gonna do maybe 10, 15 minutes of slides, kinda level set things for everybody in the room or on the webcast, and then we will do Q&A from there. With that, I'll hand it over to Jonathan Zalevsky.
Thank you so much. Good morning, everyone. We're excited to be here at Nektar and excited to share with you some of the upcoming developments, recent developments at our company, and kinda where we are in looking ahead to 2026, 2027 and beyond. Today I'll just cover a few slides sharing our progress, and there are some forward-looking statements. One of the things that's important for us at Nektar is we've had a transformation. We've really retooled ourselves focusing on our expertise in immunology, both in terms of the research, the discovery, and the development within the I&I indications. That's really led us to concentrate our efforts onto regulatory T cells, which is a subset of the immune system, sorta nature's natural immune resolving mechanism.
It's been an area of focus for many of our researchers and development staff, and it's really where we've heightened our intensity with our pipeline. You'll hear today about multiple examples. rezpegaldesleukin, our lead flagship molecule, really targets the Treg compartment. I'll also just briefly touch on our TNFR2 program, which also touches on regulatory T cells and even other regulatory cells in the immune system. We've achieved a lot of clinical success with REZPEG, which we'll touch on today, and this activity has focused into very large indications with high unmet need. Through those activities, the company has really done a lot to bolster itself. Most recently, as the maintenance data with 52-week treatment that we've announced just last month.
After that, we also executed a large equity raise and really set the capital in a, in a really good financial position going forward. This slide indicates our pipeline, it highlights where we are. The top section refers to our I&I programs, and we'll really be discussing REZPEG today. With TNFR2, though, I'll just mention we recently announced a collaboration with UCSF and the lab of Dr. Stephen Hauser, a very well-known researcher in multiple sclerosis, MS. We'll be advancing NKTR-0165 in a number of very exciting MS studies in collaboration with Steve and his lab. I'd like to begin by focusing on REZPEG for the treatment of atopic dermatitis.
This is a very simple cartoon that represents some of the interplay and the forces of the disease-driving elements of atopic dermatitis in the skin, the loss of barrier function leading to a fulminant immune reaction. It's characterized by mixed T helper subclasses, but TH2 being one of the more dominant forms of that. This complex interplay is what causes the itching, the scratching, you know, the lesions that form, and then the really significant impact on quality of life for these patients. With our studies exploring REZPEG, which is shown at the bottom, this molecule here, it's a very unique agonist of the immune system that is highly selective for agonizing regulatory T cells, causing them to activate and proliferate.
We've shown with our clinical studies that by targeting this axis and by increasing the fitness of the Treg compartment in patients, it could have profound efficacy in patients with atopic dermatitis, which has also really sort of launched one of the first sort of most significant clinical validations of this recent Nobel Prize-winning work, that you can target the Treg compartment for disease intervention in a disease like atopic dermatitis. We ran a very large phase II-B study. It was a 400-patient trial that evaluated multiple doses of REZPEG in patients that had severe or moderate atopic dermatitis, not controlled by topical corticosteroids. With that study, our aim was to answer three fundamental questions. The first is, as a typical phase II-B dose range finding study, how can we define the optimal phase III dose level?
How can we define the regimen and duration of that dose level for the phase III? These first two questions were answered when we gave the top-line results June of last year from this study. There, we explored treatment of three dose levels of REZPEG over 16 weeks. We saw a clear dose-dependent efficacy. We saw that the 24 mcg per kg twice monthly achieved statistical significance across all of the primary and secondary endpoints. We also saw that extended dosing beyond week 16 further deepened the efficacy, which allowed us to establish the 24 mcg per kg dose for 24 weeks as our key induction regimen and dose level and pivotal endpoints. We'll touch on that very briefly in a few slides.
Most recently, last month, we presented the results from that same study where we continued dosing from week 16 to week 52. This is the maintenance portion of the study. There, our goal was to see would people maintain the efficacy they achieved at week 16? Would they potentially see new and deepening efficacy as well beyond what they originally achieved at the end of the induction? What would the long-term safety look like at 52 weeks? With the goal of assessing all three of these things with a very low frequency, monthly or quarterly regimen. The next few slides really sort of highlight some of these unique differentiating features of REZPEG. Shown here is just a very simple snapshot of the time to responsive activity across the different dose levels of REZPEG for four key endpoints from the 16-week induction.
One of the key things that we see from here, example, if you look at the itch NRS in this lower right, this shows how quickly patients achieve an itch response when treated with REZPEG. The high dose of REZPEG, 24 mcg per kg, is the red line. You can see how quickly it separates from the placebo as early as four to six weeks after the start of treatment and how it continues to really deliver key itch efficacy to these patients. We know this is so important because the main driver of quality of life in this disease is itch. That's what keeps you awake at night, makes it hard to wear clothing. It really has the debilitating features of the disease tied to itch and how it drives itch pain and the skin responses.
Being able to quickly resolve that is very, very important for a successful therapy. That's one of the things that REZPEG does quite well. Most recently, last month, we reported the results of the 52-week maintenance, and a snapshot of that is highlighted in the next few slides. What's shown here is a pooled analysis from all of the patients that at the end of the induction period achieved either an EASI-75, 90, IGA or an itch response. The Ns for the people are shown here. The % on this chart demonstrates the proportion of people that maintained that response from week 16 through week 52. On the left, either on a once-a-month regimen, and quite impressively on the right on once-a-quarter regimen.
You can see that really a very large proportion of people maintain their response with very, very low frequency dosing four times a year. These results are highly important because when we compare those results to the standard of care DUPIXENT, which is shown in the middle panel of each of these charts, you can see how well REZPEG, given on either a monthly or a quarterly regimen, compares to DUPIXENT, which really is only able to maintain efficacy when dosed on a two times a month regimen, which is their indicated dose. When DUPIXENT is dosed monthly or once every two months, the activity really quickly drops off. For some of the endpoints, it's really quite important. If you look at the IGA response shown here, this is the registrational endpoint in the U.S. This is really the higher bar of efficacy.
You can see that half of the patients on DUPIXENT lose their IGA response. Whereas with REZPEG, as many as 85% maintain their IGA response, really showing the power of the Treg mechanism. Another way that that additional power reflected itself was when we put together the high durability of response, and we put together the fact that many people deepened and, for example, if they had an EASI-75 could convert to a 90 or beyond, and if they didn't have an EASI-75 could convert to a 75. When we put together the deepening, the new responses in the maintenance, we saw some very profound efficacy in terms of the 52-week response rates that we saw in the trial. Shown here is the highest bar for efficacy. This is EASI-100, so this is 100% clearance of disease.
This is effectively your skin being completely clear and all the symptomology of the atopic dermatitis that you had is absent when you achieve an EASI-100 response. You can see from weeks 16 to week 52, we had a four- to five-fold increase in the proportion of patients that achieved an EASI-100. Here the data is presented in two different ways. We define the maintenance population as EASI-50 in phase II, but in phase III, we'll define the maintenance population as an EASI-75 or IGA. That's the main difference between these two analyses. It's the same data set, just cut two different ways.
Again, what you can see is that either the quarterly or the monthly regimen, we see a very large percentage, as many as one in three patients achieving completely clear skin at the end of 52 weeks, which we think sets a new bar for efficacy, something we're really, really excited about. It also, in my mind, as an immunologist, really speaks to what a Treg mechanism can do. This is an ongoing agonist, and it's the cell that's executing the efficacy. It's not blocking a pathway like would be the case with an IL-13 inhibitor or a STAT blocker or so on. It's really letting the cell and your natural immune system overcome and sort of fix the pathology and the disease, and that's really the promise of a Treg therapy.
One of the important things that we also observed in the study was this represented a 52-week treatment duration. To this date, this was the longest treatment duration that we've seen. We were very excited to see that the safety profile is consistent with what we've seen across all of the other studies. We have now treated over 1,000 patients with REZPEG through various durations of time. We had a very low rate of discontinuations on REZPEG, and there was no imbalance for risk of infection relative to placebo. We've seen that point across our safety database. REZPEG does not indicate or show any features of being an immunosuppressive mechanism like a steroid or another general immunosuppressant would be. It's much more focused.
We didn't see any of the sort of common thematic adverse events that you see with the standard of care classes of agents. There was no imbalance in conjunctivitis, ulcers or any of the infectious outbreaks. The most frequent adverse event were ISRs, which we've seen across the entire program. They occur at a high frequency from an individual patient event, one or more. When you count the total number of events the patient sees, they're actually relatively infrequent, meaning that it's very rare that a patient sees an ISR after every administration. On average, they see it after two, one, or zero, that actually buckets most of the patients for whom we see an ISR event. The discontinuation rate to ISR is very low. It's 0.7%.
One important thing that we saw is in the maintenance, as we decrease the dose frequency, we also saw a lessening in the ISRs relative to the induction. Again, all highly indicative of the fact that patients appear to tolerize to the ISRs over time. When we kind of take a step back and we think about this data, we see that this is really highly validating for the whole Treg class, and it's highly validating for REZPEG as being an agent with a simple subcutaneous administration that can target the Tregs for a therapeutic axis. We've seen that across the study in both the induction and the maintenance arms, and we see a very highly differentiating data set for REZPEG. Firstly, it's a novel mechanism of action.
We see a very rapid onset of action of the most disease-driving pathology in the itch standpoint, very quick resolution. We've also presented data that REZPEG is able to treat asthma in the patients that have atopic dermatitis and asthma at the same time. This is a common comorbidity that we see in about one in four people with atopic dermatitis. They also have asthma, right now only DUPIXENT has activity in both of the conditions. Now REZPEG is the other agent that's demonstrated activity in both of those maladies. With the maintenance regimens, including quarterly dosing, we see a very strong durability as well as deepening of responses, achieving very, very high bars for efficacy, including EASI-100.
The other very important aspect is we have a safety database with over 1,000 patients treated with REZPEG, a number of very highly differentiating features for a novel potential medicine. Next quarter, we'll kick off the phase III for atopic dermatitis, this demonstrates the design at a high level. We know, as I mentioned, the dose level, the dose regimen, and frequency, a 24-week induction period with 24 mcg per kg dosed twice a month. In the maintenance section, we will be evaluating both the monthly and the quarterly dose regimens. This will be through one year after a 24-week induction period. IGA, which is the key approval in the U.S., will be the primary endpoint. We'll capture the other key secondary endpoints like EASI-75, EASI-90, EASI-100, the asthma questionnaire, and so on, and others.
I just want to very briefly touch on the activities that we've seen with REZPEG and alopecia areata. In December, we presented top-line data from our phase II-B REZOLVE-AA trial. Mechanistically, this slide shows why REZPEG and Tregs are important for this disease. Patients with alopecia have a Treg dysfunction. Normally, hair follicles have this very unique immunological state called immune privilege, where the entire immune system is excluded from the hair follicle, and that keeps the body from mistaking hair stem cells as potential tumors, which would be bad, and that would cause hair loss. In alopecia, that's exactly what happens. The immune system invades the follicle, and the hair stem cells go into a state of senescence because of the ongoing inflammation. Tregs are involved in fighting back the immune system from this hair follicle.
Our goal is to restore that pathology by giving the patient back a healthy Treg compartment, and hopefully, this will allow the patient to grow hair. This slide shows one of the highlights from our data presentation in December. This shows the change in SALT from baseline. SALT is the main endpoint that we use for measuring hair growth. It basically measures how much of the scalp contains hair follicles that are actively growing hair versus bald patches. Side by side, you can see the activity that we saw with REZPEG relative to standard of care Olumiant.
We saw a very similar total amount of hair regrowth over 36 weeks, but we saw a very different kind of a slope, which indicated to us that additional dosing could be important in this indication, the same way we saw additional dosing was very important in atopic dermatitis. We demonstrated that REZPEG really grew a lot of hair in people in this trial. This is a waterfall plot comparing the placebo group on the far right in gray versus the REZPEG arms in blue. You can see how many more people grew hair with REZPEG. We also saw that the timing was important. When we presented this data, all of these green dots were people that were in an ongoing extension of dosing beyond week 36. They were ongoing from 36 for 16 more weeks to week 52.
We also, you know, disclosed in December that we already had seen three people in that extension period achieve a SALT 20 response, and they weren't even counted in the numerator when we presented the data in December because those responses happened after week 36. In the next quarter, in Q2 of this year, we'll report an update for this trial with these remaining 23 people as they've completed their 52 weeks of treatment. We're very excited about that because we do think that there's an opportunity to see, as we've mentioned in December, already more efficacy with ongoing dosing. This could represent a very, very profound opportunity as there are no biologics approved in alopecia areata. It's only JAK inhibitors. The JAK inhibitors are difficult to take chronically, but even worse, if a patient stops taking a JAK inhibitor, their hair falls out.
Over 90% of patients lose their hair quite quickly after stopping to take a JAK inhibitor. There's a very large opportunity for the first biologic in this indication, and we look forward to that data update next quarter. When you take a step back, one of the important paradigms of our work is that by creating for the first time a really preferential Treg targeting approach with REZPEG that's easy to dose, is scalable, is not a cell therapy, is a simple sub-Q. By showing how well it can elevate Tregs and the Treg function, it actually starts to represent what we've always felt as immunologists. We knew that Tregs were essential for so many different diseases, but we didn't really have an adequate way of targeting them in a reliable fashion.
If you consider the literature, consider what's known from approaches like low-dose IL-2, or the general study of Treg biology, either genetically or clinically, we know that there are so many indications that are potential for this true kind of pipeline in a product opportunity. Many of these are examples where we've already seen activity with REZPEG. Before I stop and open for questions, I just wanna highlight some of our key milestones coming up. For us in atopic dermatitis, next quarter will begin the first phase III study. The second phase III study will begin, you know, four to eight weeks afterwards. For additional phase II studies in REZPEG, we'll be presenting data at multiple medical conferences later this year, for atopic dermatitis. That's both clinical data as well as mechanism of action data as well.
We'll have data from REZOLVE-AA, the alopecia areata study, as I mentioned, in the second quarter, also later in the year, we'll have the 24-week off-drug data from that study as well. In the early part of next year, the atopic dermatitis study will read out its 52-week remittive portion. 'Cause all the patients that ended at 52 weeks of treatment then go on 52 weeks of follow-up off drug for the assessment of off-drug durability. We also have a trial running with TrialNet in type 1 diabetes, that's just kicking off now as well. We'll also be presenting data for our TNFR2 agonist antibody at a medical conference this year, and also, we've been developing that program as a bispecific, which is another unique entrant to our pipeline.
With that, I wanna thank you for your attention and happy to take questions.
Great. Thanks for that JZ. If you want, you can move over here. Give him a second to get settled. Maybe as you were presenting the data, obviously, the Q 12-week extent, you know, going out to Q 12 weeks certainly didn't look worse, but depending upon how you look at the endpoints may even have looked a little bit better than Q four-week. What gives you confidence that that is the optimal maintenance dosing and that it isn't something longer than Q two is actually a better regimen, something, you know, every six months or whatever that number might be?
Yeah. It's a really, really cool question. We ran this very unique phase I trial before this phase II. In that study, it was a small trial, only about 45 patients, 43 or so. We treated for 12 weeks subcutaneously twice a month. We took the patients completely off of drug, cold turkey, no step down or anything. We followed them for 36 additional months, 30 weeks, I mean. For six months off drug, we saw very deep durability in that trial. In fact, we saw about a 80% maintenance of IGA and about a 72% maintenance of EASI-75. That was without treatment at all. We kind of had a reason to believe that a very low frequency regimen could be possible.
You know, it's a small phase I, and you're never really sure of that. In this phase II, we decided to test both monthly and quarterly. The maintenance results, I think, are consistent with our phase I. I agree with you. I think for maintenance, you could probably go down in frequency even more and maintain responses. The second question we wanted to ask in the phase II was what happens when you keep dosing? 'Cause that was unknown from the phase I. What really kind of surprised us was the deepening of responses, right? The EASI-100. I didn't have it in the slides today, but we presented about two-thirds of patients at week 52 achieve an IGA, which is really, you know, spectacular level of efficacy.
I do think that there's an opportunity to push the dosing even further, as you're suggesting, and that could be some of the things we do in future studies.
Okay. Some investors have noted the, kind of the frequency of the ISRs in your trial, which you mentioned in your presentation. Can you speak a little bit more about, you know, how impactful that is to patients, and particularly in the AD space where, you know, there are fairly well-tolerated drugs. Are there any kind of programs in place that you're trying to work on to see if there's ways to reduce those ISRs?
Yeah. Yeah. We've done a lot of polling. We've asked patients, and we've tested that, you know, both in terms of kind of qualitative research, you know. Also from the physicians in our studies talking to their patients and sharing their feedback with us. Patients noted, but it's not problem for them, which is why we see really such a low rate of discontinuations due to ISRs across all of the program. When it does happen for a person, it comes up a few days after the injection, and then it lasts roughly a week, and it self-resolves. The reason why it hasn't been a big issue, we believe, is because the most common presentation is erythema. It's a pink or a redness. Whereas secondary manifestations like pain or itch, those are very uncommon or rare, right?
Because of that, patients, they don't actually care as much. When your skin is clearing and your itch goes away and you have a local reaction, you know, that's a very decent, like, trade-off as far as patients see. There's two more things I wanna say. People do really tend to tolerize against them. For example, in the 16-week induction, people take eight administrations. For people that had an ISR, the vast majority had either two or one case of ISRs, even though they took eight drug administrations. That's one of the things we see repeatedly. We have found that there are ways to mitigate this. We've developed a primary skin organoid culture where we can collect skin samples from tummy tuck surgeries, and you can actually inject them.
You can mimic an injection site kind of a reaction. We've studied the mechanism. We know some of the pathways that are involved. We're drilling down into the cell types that we believe are driving that, which gives us one avenue of mitigations that are ongoing in our labs. Also, when we launch the drug, we'll be launching it in an auto-injector, which also will help standardize the, you know, the drug administration. The needle will be dry, the depth, the speed, the angle, all of those things are all things that we believe will mitigate this even further.
Okay. You presented the, a phase III trial design there, the two trials that are starting in the next quarter or so. They are both identically designed as that. Is that the extent of the phase III program, or are there additional studies? We often see for some programs like a TCS combo or some other kind of-
Mm-hmm.
Trials out there as well.
So for the whole BLA, there is a whole, you know, clinical development plan that supports that. There are like other phase I studies. There are other studies in the program that support the BLA. There will be other studies besides those. There's also gonna be a long-term extension study as well, which is key. The people that complete that one-year study that I showed, they roll over into a study where they take additional longer-term dosing. I guess as the years go on, we can give more information about that. The key information, right, and the key kind of sort of catalyst events, right, is that the first phase III will begin next quarter, and then in 2028 is when we would expect the results of that study.
Maybe how should we think about enrollment into that phase III? I mean, do you think the older phase IIIs of the few approved drugs in atopic dermatitis are good proxies for how we should think about enrollment pace? You know, there's a lot, not just your program, there's a lot of other things happening in AD right now. Is that maybe burdening some of the sites, and we should think about any one program being a little bit slower?
Yeah, it's a great question. I mean, I think that when you get to phase III, the quality of the phase II data is important, and that gets doctors excited, that gets people, you know, wanting to participate and wanting to enroll. One of the good things that we have here is we have a really novel MOA, right, which the derm community really likes. They're very immunologically focused. We have really interesting phase II data, right, that's really pushing the envelope. We think that's going to be very important. For us, I think that if you kind of think about enrollment pace, I think our phase II is a good proxy of that. We began that study around October, November.
We read it out in the, we completed the enrollment in the early part of 2025 and read out in 2026. From the end of 2023 into that year. I think that's the kind of the right proxy to think about.
Okay. I think also now there are some patients who are being followed and said, up to a year off therapy. What's a, you know, interesting scientific finding? What's a maybe a game changer for the treatment of AD? You know, what are kind of the different levels of efficacy in terms of being able to maintain a response without drug?
Yeah. Well, I think this is what. When we had that phase I study, that was the most sort of breathtaking element of it, was that we treated for 12 weeks, we saw six months of durability. Whereas if you would take a JAK inhibitor, a DUPIXENT or any of those kind of classes, the disease would have come back, right? When you think about what is the concept behind a resolution therapeutic that targets your own natural immune system, right? The idea is not to shut off a bad pathway, but to turn on your own natural, you know, repair, right, if you will. What I think is so exciting about that is that if we find that we can achieve a state of remission, which to me probably is something like six months of EASI-100 or something.
Like, that's a good example of what would be, you know, a measured kind of definition of remission or something. That would, I think, start to change, you know, how you would think about a medicine. 'Cause as a patient, I mean, the best drug that you could imagine is a drug that you could take and then stop taking, right? Because it worked for you, and you don't need to take a drug forever. Those are some of the things that would be kind of a new approach.
Okay. Maybe I know we're running up on time, alopecia areata, I think, a number of investors are maybe skeptical of as a, as a true market, from a commercial perspective in terms of size. Maybe what do you think they're missing the opportunity in alopecia?
Yeah. One of the things that I think alopecia it shows us parallels of is what we've seen when other biologics have been approved. If you take a field like RA before infliximab Remicade was approved. I mean, it was a field that was treated by like sulfasalazine, gold, azathioprine, and people didn't think it could really grow. What we found were the more rheumatologists started to prescribe a drug that they thought was more effective, and it wasn't even necessarily competing with the other agents. We saw the same thing happen in psoriasis when the biologics came in and grew the market. We saw the same thing in atopic derm when DUPIXENT and other biologics grew the market.
Our market research in alopecia has showed us that there are a lot of doctors that don't even wanna prescribe a JAK inhibitor to a patient that even would need it. They were much more likely to prescribe a safer biologic like they do with DUPIXENT or other agents. What we learned from that market research is that we don't even necessarily need to compete with JAK inhibitors. There are just many more doctors that wouldn't even write a script for that, but would write a script here. I think there hasn't really been a good analog, you know, to benchmark, but I think alopecia could be a field that would grow in the addressable patient population if a drug like REZPEG was available and approved and a standard of care.
In your slides, you just made that argument on the kind of safety comparison to JAK, and in the slides you showed kind of in the follow-up that you have today, the efficacy is kind of very comparable.
Mm-hmm.
As we get the longer-term data, and I get the argument that hopefully it's gonna continue to deepen, what level of deepening would in your mind be clearly differentiated not just on the safety but on the efficacy as well?
It's very hard to take a JAK chronically, right? It's just It's bad for your health, right? All of these cardiac and other things can creep in, and you have infection risk to constantly deal with. There's a reason why those drugs have a black box warning. Even though it's a mechanism that's great for growing hair, it really blocks interferon gamma, which is a big driver, right, of the issue of the disease. It's just hard to stay on 'cause for any reason, you might have a transaminase elevation, you need to go off, and then you've lost all your hair that you've just grown and maybe you've had for now a period of time for the first time in years for you. One of the...
I think the big paradigm shifts is that, reaching a level of efficacy that's in the ballpark, but then being able to go on, say, a monthly or a quarterly maintenance regimen, so you don't need to take a daily pill, or you don't need a high-frequency drug administration. You're protected because your hair doesn't fall off so instantaneously if you have any interruption of JAK inhibitor, and you've just ended up with a much, much better maintenance kind of a drug. That's where I think the whole field can, you know, can swap because it becomes very convenient for the patient, and they don't have to deal with the burden of the disease.
Okay. Unfortunately, we're up on time, we're gonna have to cut it off there, thanks a lot for joining, Jonathan.