Ladies and gentlemen, thank you for joining us, and welcome to Nektar Therapeutics EADV Analyst and Investor Event. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Vivian Wu, Investor Relations and Corporate Affairs. Vivian, please go ahead.
Thank you, and good morning, everyone. Thank you for joining us today to discuss new data being presented at the EADV 2026 Congress. On today's call, we expect to make forward-looking statements regarding our business, including statements regarding the potential of and future development plans for rezpegaldesleukin, the timing and plan for future clinical data presentations, and other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, many of which are outside of our control. Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our most recent annual report and quarterly report on Form 10-Q, available at sec.gov. We undertake no obligation to update any of these forward-looking statements, whether as a result of new information, future developments, or otherwise.
A webcast of this call will be available on the IR page of Nektar's website at nektar.com. Today, you will hear from Dr. Jonathan Zalevsky , our Chief Research and Development Officer, and Dr. Mary Tagliaferri, our Chief Medical Officer. We are also joined today by Dr. Benjamin Ungar . Dr. Ungar is an Assistant Professor of The Waldman Department of Dermatology at the Icahn School of Medicine at Mount Sinai and an expert in this field. We are very glad to have him with us here today. With that said, I would like to hand the call over to our Chief Medical Officer, Mary Tagliaferri. Mary?
Thank you, Vivian. At Nektar, our strategy has been to advance a first-in-class regulatory T- cell, or T-reg mechanism, to address the underlying biology of autoimmune and inflammatory diseases. Rezpegaldesleukin, also known as REZPEG, is a first-in-class IL-2 pathway agonist designed to selectively expand regulatory T- cells. With T-reg s, we can address multiple inflammatory pathways at once, including Th1, Th2, Th17, Th22, JAK-STAT, and others, which drives the efficacy and resolves the symptoms and underlying heterogeneous pathology of the disease. This is in contrast to therapies that only target Th2 disease pathways. Our REZPEG development program is addressing three distinct autoimmune diseases: atopic dermatitis, alopecia areata, and Type 1 diabetes, each of which represents a substantial commercial opportunity. Alopecia areata affects roughly 160 million people worldwide, with approximately 30 million new cases diagnosed every year.
The only class of systemic medicines approved are oral daily JAK inhibitors, which have significant drawbacks. JAK inhibitors possess box warnings, and they are also associated with high relapse rates after patients stop treatment. We believe this provides a significant opportunity for Nektar to advance REZPEG as the first biologic to be approved to treat these patients, offering potentially better safety and efficacy, which could improve over time with continued treatment. Additionally, JAK inhibitors are taken orally once daily, which can present challenges for long-term drug adherence. A therapy with less frequent dosing makes long-term treatment more manageable for patients. Beyond adherence, a therapeutic option which has an extended biologic pharmacodynamic effect can offer durable and stable efficacy even in the setting of imperfect compliance. There also remains an opportunity for a therapy that reduces or eliminates the routine laboratory monitoring requirements associated with JAK inhibitors.
Finally, an option that offers a more straightforward market access with broader eligibility can greatly benefit patients. These parameters, if met, could provide physicians with an alternative to JAK inhibitors and redefine first-line systemic treatment in alopecia areata. We believe that REZPEG's novel Treg mechanism has the potential to address these major unmet needs. Shown here are findings presented at the 2026 AAD meeting from an external analysis of Symphony Claims data evaluating treatment patterns of patients treated with approved JAK inhibitors. These results demonstrate that most patients are initiated and treated with low-dose baricitinib. The data also demonstrate poor persistence on therapy, with most patients discontinuing treatment within the first six months. We designed the treatment period of the phase IIb REZOLVE-AA study to answer four important development questions for our phase III study design.
First, can a T-reg cell-directed biologic provide meaningful efficacy with a robust safety profile? The answer to this first question is yes. REZPEG demonstrated consistent separation from placebo across efficacy measures evaluated, with the safety profile consistent with prior studies. Second, because we hadn't completed any prior trials in AA, we wanted to understand the kinetics of hair regrowth. What the trial showed is the greatest increase in hair regrowth occurred after week 16 and continued beyond the initial 36-week induction period. Third, we asked what dose should be advanced to the registrational trial, and based on the data, the 24 microgram per kilogram Q2 week regimen has been selected for our phase III clinical trial. Finally, we needed to determine how long the induction period should be.
The additional responses observed from week 36 to week 52 in the treatment extension cohort support a 52-week phase III induction period for the evaluation of the SALT score of 20 or less, which is the registrational endpoint. As a reminder, our phase IIb REZOLVE-AA trial enrolled 92 adult patients with severe to very severe alopecia areata. The current episode duration was up to eight years. Patients received treatment every two weeks with subcutaneous REZPEG 24 micrograms per kilogram, 18 micrograms per kilogram or placebo. Unlike a traditional maintenance phase of an atopic dermatitis trial where responders advance to additional weeks of treatment, this study included a blinded 16-week treatment extension for patients who demonstrated hair growth but had not reached SALT ≤20 or less at week 36. This created a total treatment period of 52 weeks for the extension cohort.
We previously announced in April the 52-week treatment data from the study. Today, we are presenting the six-month off-treatment data. This slide shows the SALT ≤20 responses over time to week 52 for the entire enrolled patient population. Recall, SALT ≤20 corresponds to at least 80% scalp hair coverage and represents a clinically meaningful endpoint. The central observation is that the REZPEG response curve continued to rise through to week 52. It does not plateau. These data support that extended treatment beyond one year could result in additional gain in SALT ≤20 responses. On the right side are the corresponding 52-week time points for low-dose baricitinib from the BRAVE registrational studies. We achieved our goal of a similar response rate compared to low-dose baricitinib at 52 weeks for the key SALT ≤20 registrational endpoint.
With comparable clinical benefit to a low-dose JAK inhibitor, plus twice monthly dosing and a more favorable safety profile, it is easy to see how REZPEG could become the first biologic used as first-line therapy for alopecia areata. This previously reported analysis shows patients who completed 52 weeks of treatment. Eight new patients treated with REZPEG converted to SALT ≤20 among the 27 REZPEG-treated patients in the 52-week treatment cohort. The new response rates were 29% in the 18 microgram group and 31% in the 24 microgram group. No new SALT ≤20 responses were observed in the four placebo patients. Here we present, for the first time, a new analysis from the 52-week treatment cohort. For context, duration of the current alopecia areata episode is considered an important prognostic factor, with longer continuous episodes established as a more difficult to treat patient population.
In this cohort, REZPEG achieved similar week 52 SALT ≤20 response rates regardless of current episode duration, with comparable outcomes observed in patients with episodes shorter than four years and those with episodes of four years or longer. You can see the response rates were 29% and 30% respectively. Approximately 37% of the REZPEG-treated patients had a current continuous episode of at least four years. While the subgroup sizes are small, these results suggest that clinically meaningful hair regrowth was not limited to patients with a shorter duration of disease. Looking at current episode duration with low-dose baricitinib, you can see a clear difference between the two cohorts. Patients whose current episode is four years or longer achieved a lower SALT ≤20 response than those whose current episode is shorter than four years. Now let's look at the off-treatment durability.
In this trial, we followed all patients for up to six months off treatment. We believe this was particularly relevant to evaluate because REZPEG is a T-reg-directed biologic that enhances endogenous immune regulation rather than simply suppressing a downstream inflammatory signal. Shown here is the durability data for both the four-month and six-month off-treatment periods for patients who received 52 weeks of treatment in the study. For four months or six months off treatment, you can see highly durable efficacy with REZPEG, with 75% of patients maintaining the SALT ≤20 response at four months and 63% maintaining the SALT ≤20 response at six months. For context, we have shown here the historical data for low-dose baricitinib, also at four months and six months off treatment. These patients in the baricitinib studies also received 52 weeks of treatment prior to being followed off treatment.
You can see that only 30% and 20% of patients on low-dose baricitinib maintained SALT ≤20 at four months and six months respectively. This notable sustained SALT response off treatment is consistent with our findings in atopic dermatitis. These data support less frequent monthly and quarterly dosing after 52 weeks of REZPEG induction treatment in alopecia areata, and this will be incorporated into our phase III long-term extension study. The preceding analyses used the stringent SALT ≤20 or less threshold. Shown here is an analysis that asks a broader question: Do patients preserve the degree of hair regrowth they had achieved by week 52 when evaluated six months after withdrawal from REZPEG treatment? Among the 21 patients who completed 52 weeks of treatment and had observed data at the end of the six-month follow-up, nearly half of the patients maintained or grew additional hair six months off treatment.
These findings, coupled with the SALT ≤20 responses, suggest that treatment with REZPEG leads to restoration of immune tolerance and subsequently durable immune responses. This waterfall plot provides a patient-level view of hair regrowth of patients in the 52-week treatment cohort. During the six-month off-treatment follow-up, 41% of patients achieved a deeper best response than they had achieved during active treatment, and 22% maintained hair regrowth. Taken together, 63% of patients experienced either additional hair growth or maintenance of their prior best response during follow-up. The important takeaway here is twofold. First, response to REZPEG did not simply erode across the entire patient population when treatment was stopped. Second, many people continued to regrow hair in the off-treatment period. Shown here is what happens when we look at deeper responses, such as SALT ≤10, which represents near complete scalp hair regrowth.
On the left side, at week 52, 7% of the 27 extension patients had achieved SALT ≤10 or less. Six months after treatment ended, that proportion almost tripled to 19%. Three patients with SALT ≤20 score at week 52 converted to SALT ≤10 score during follow-up, demonstrating a deepening of clinical responses after treatment discontinuation and suggesting durable biological activity. On the right side of the slide, we are presenting historical baricitinib data to provide context for these results for REZPEG. Among baricitinib-treated patients who achieved a SALT ≤20 after one year on treatment, only 10% had a SALT ≤10 at six months after treatment discontinuation. To contrast that, among REZPEG-treated patients who achieved a SALT score ≤20 at week 52, 63% had a SALT ≤10 at six months after treatment discontinuation. From a safety perspective, the 52-week safety findings remained consistent with the previously reported REZPEG safety profile.
Importantly, no increased risk or safety signal was observed for oral herpes, conjunctivitis, facial swelling or erythema, aphthous ulcers, myocardial infarction, pulmonary embolism, deep vein thrombosis, or malignancy. No adverse events were observed that would require routine laboratory testing or monitoring. This favorable safety and monitoring profile is particularly relevant for a chronic dermatologic disease and may represent an important point of differentiation from oral JAK inhibitors. The photographs shown here are from a 40-year-old man whose response continued to improve with extended treatment beyond the original 36-week induction period. We previously presented this case in April when he had already demonstrated meaningful hair regrowth. Following an additional 16 weeks of treatment, the patient experienced a further 63% improvement in SALT score by week 52. Importantly, the clinical benefit did not plateau when treatment stopped.
During the six-month off-treatment follow-up, the response continued to deepen, improving from a SALT ≤20 at the end of one year of treatment to a SALT ≤ 10. This case illustrates that continued treatment can further enhance clinical responses and that those gains may not only be maintained but can continue to improve even after REZPEG is discontinued. This second case highlights a similar pattern of continued improvement and durable efficacy in a patient with a much longer history of disease. The patient had been living with alopecia areata for 13 years prior to treatment and received REZPEG 24 micrograms per kilogram for 52 weeks. At week 36, the patient's SALT score remained 24, including that a SALT ≤20 response had not yet been achieved by the end of the original induction period.
However, within an additional 16 weeks of treatment, the response improved substantially by week 52 and then continued to deepen during the six-month off-treatment follow-up period, ultimately reaching a SALT 10. This case is particularly noteworthy given the patient's age. At age 64, she represents a population where JAK inhibitors are less desirable because of age-related comorbidities, including hypertension, hyperlipidemia, obesity, and diabetes. Despite a long-standing disease history, the patient achieved a durable SALT response with near complete scalp hair regrowth that was maintained and further improved six months after discontinuing REZPEG. Importantly, this case underscores the potential for REZPEG to provide meaningful, durable clinical benefit in patients with limited treatment options. Now, in closing for the clinical data, let's review the highlights from the study. First, REZPEG demonstrated consistent efficacy through 52 weeks, and the response curve continued to rise beyond week 36.
Second, efficacy of patients treated for a year was similar for individuals with a current episode shorter than four years or longer than four years, with SALT ≤20 response rates of 29% and 30%, respectively. Third, as just mentioned, the safety profile remained consistent with prior studies, with no new findings during the 16-week extension and a low adverse event discontinuation rate. Fourth, longer treatment was associated with greater off-treatment durability. Six months after the last dose, 63% of week 52 SALT ≤20 or less responders maintained that response. Fifth, responses did not merely persist. Some continued to deepen after treatment ended, with SALT ≤ 10 or less increasing from 7% at week 52 to 19% six months later.
Finally, these findings support the planned phase III strategy of advancing REZPEG 24 micrograms per kilogram every two weeks for an induction period of 52 weeks, as well as evaluation of less frequent monthly or quarterly maintenance dosing in responders. The phase III ZENITH AA trial is planned to enroll approximately 850 patients and initiate in early 2027. Collectively, these data support REZPEG as a potentially differentiated first-in-class T-reg-directed biologic for severe to very severe alopecia areata, combining meaningful clinical activity, durability after withdrawal, and a favorable safety profile. With that, I'll hand the call over to J.Z. to discuss the biomarker findings from the phase IIb REZOLVE-AD study in patients with moderate to severe atopic dermatitis. J.Z.?
Thank you, Mary. Switching gears, I will be talking about the biomarker sub-study we conducted in the phase IIb REZOLVE-AD study in patients with moderate to severe atopic dermatitis. Let us first look at the initial translational data we presented a year ago. Here, we show a clear, objective, and meaningful immunological impact of REZPEG on lowering key Th2 inflammatory markers associated with atopic dermatitis. We observed dose-dependent reduction in IL-19, TARC, which is also known as CCL17, periostin, and MDC, which is also known as CCL22. These are the absolute mean reductions from baseline to week 16 in patients that had baseline levels of these markers above the upper limit of normal. As you can see, we saw a dramatic decrease in CCL22, one of the chemokines for the CCR4 receptor, and dose-dependent reduction at week 16 for CCL17, the other chemokine ligand.
In contrast, placebo patients showed increased levels of CCL17 over the 16-week induction period. Consistent with our profile, we saw dose-dependent decreases in serum IL-19 and periostin, a key marker present in the lesions of patients with atopic dermatitis. Our PK and PD profile is consistent with prior studies of REZPEG. We saw up to a sixfold increase in T-regs at the high dose of that study, which is very similar to what we observed with the same high dose level and regimen in our phase Ib study. I would like to briefly discuss some of the highlights from yesterday's late-breaking presentation from Dr. Emma Guttman-Yassky's lab at Mount Sinai. Emma's lab conducted transcriptomic and proteomic analysis of skin tape strips and matching blood samples. Let us turn to that talk and briefly profile the disease.
Atopic dermatitis is a chronic inflammatory skin disease characterized by T-cell-mediated immune dysregulation, highly impacting patients' quality of life. Although current biologics effectively target Type 2 inflammation, more than 50% of adults report inadequately controlled disease despite treatment, underscoring the complexity of treating this heterogenous disease and leaving a major unmet need for a novel approach to immune modulation. As you know, REZPEG targets the IL-2 receptor complex to preferentially stimulate the proliferation of T-regs, thus working as a master immune modulator upstream of the pro-inflammatory cytokine pathways and other currently available therapies. The phase IIb REZOLVE-AD study enrolled 393 biologic-naive patients with active, moderate to severe atopic dermatitis. For the 16-week induction treatment period, patients were randomized to receive one of three dose arms of REZPEG or a placebo.
The primary endpoint and secondary endpoints were assessed at week 16 at the end of the induction period, and these results were recently published in The Lancet. Emma's lab conducted a biomarker sub-study analyzing samples taken from the induction portion of the study from patients in the high 24 microgram per kilogram Q2W dose that we are taking into the phase III, as well as their comparison to samples from the placebo group. Tape strips were collected from lesional skin and blood samples of 100 patients, 59 in the high dose and 41 in the placebo arm. Shown here are the study methods and objectives. Samples were collected at baseline and at weeks two and four, while clinical assessments were conducted at baseline and every two weeks through week 16.
The analysis was designed to profile gene and protein expression in the skin and serum during the first weeks of treatment, and to assess whether early molecular signals were associated with later clinical outcomes. Further allowing us to identify correlations between REZPEG dosing, pharmacodynamic changes seen in blood and tissue, and the correlation of those to each other, as well as their correlation to the clinical efficacy of REZPEG in this indication. Patients in the REZPEG and placebo arms were well-balanced across demographics and baseline disease characteristics. The mean reduction from baseline in EASI at week 16 was 64% in the biomarker sub-study population, consistent with the 61% reduction observed in the overall 24 microgram per kilogram Q2W cohort in the entire study population. These results from the biomarker sub-study showed a broad transcriptomic response in skin as early as week 2.
REZPEG induced rapid Treg-associated molecular changes, including significant upregulation of FOXP3 and IL-2 receptor alpha genes as early as week 2 of treatment, as compared to baseline and as compared to placebo. We also saw concurrent modulation of multiple immune pathways, which are dysregulated in atopic dermatitis, and a notable magnitude of difference between REZPEG and placebo by week four. These results are very consistent with REZPEG's agonistic mechanism of action. Transcriptomic and proteomic analysis demonstrated significant systemic and cutaneous normalization across multiple immune pathways, including Th1, Th2, Th17, Th22, and the JAK-STAT signaling pathways. These normalization responses across multiple immune pathways were also seen in the proteomic networks as early as week two of treatment as compared to baseline. Importantly, these changes included early modulation of key disease-associated T helper inflammatory pathways, including fibrosis and tissue remodeling biomarkers that further deepened by week four.
Proteomic analysis also demonstrated significant improvements in cardiovascular, atherosclerotic, and alopecia areata signatures as compared to baseline or placebo. These results are consistent with REZPEG's broad T-reg-targeted agonist profile. Finally, we looked at correlations between these early biomarker signals and subsequent clinical responses at the end of induction. We see that early serum biomarker changes at week two, including increases in IL-10 and TGF-β1 expression and reduction in CCL17 and TARC expression, were associated with subsequent EASI improvement at week 16, linking early molecular effects with later clinical responses. Correlations between early biomarker changes and week 16 EASI improvement were statistically significant in the REZPEG-treated patients, but not in the placebo-treated patients. In conclusion, REZPEG induced rapid T-reg-associated molecular changes with concurrent modulation of the complex immune dysregulation underlying atopic dermatitis.
These changes demonstrate the breadth of REZPEG's effect on different inflammatory pathways, which span both direct immune targeting and disease-resolving mechanisms. So taking a step up to 10,000 ft, these translational data provide to us a scientific framework for how the REZPEG mechanism of action addresses disease pathology through causal biology and how it can result in deep and durable responses that persist for months after dosing is completed. With today's data, we now have multiple examples of off-drug durability in two different diseases. Our nine-month off-drug results in our phase Ib study in patients with atopic dermatitis that we published in 2024, and now today, the six-month off-drug durability we reported in patients with alopecia areata. This highlights the unique and what we believe to be transformational properties of REZPEG.
On this theme, we look forward to the 52-week off-treatment data from our phase IIb atopic dermatitis study that we will report in the first quarter 2027. With that, I'd like to turn the call over to Dr. Ungar to share his perspective on both the REZOLVE-AA six-month off-treatment durability data and the biomarker findings from the REZOLVE-AD induction period. Dr. Ungar, we would welcome your insights on the clinical significance of these results and what they may tell us about the potential of REZPEG in restoring immune balance and delivering durable patient benefit. Benji?
Hi, everyone. Absolutely. I'll get started with the REZOLVE-AA off-treatment durability data. Just as a reminder to everyone who's listening about the disease of alopecia areata, I think any conversation about drugs to treat alopecia areata really need to keep this in mind. Alopecia areata is a hugely monumental condition for patients suffering from it, and treating it is very, very crucial, and patients are very, very motivated. The impact of the disease on patients who suffer from it can be negatively transformative, and successful treatments, conversely, could really influence their lives in dramatic ways. One of the challenges with alopecia areata is that clinical responses improve how people feel.
For many cases, there is still this fear that hangs over patients' minds that they will lose response, whether that be because a drug stops working, whether that be because they lose access to the medication, if there are life circumstances that lead to delays in having the treatment, or they have to be off of it for some reason. That can have a huge impact. When patients subsequently lose hair, it really sets things back by months or even years because it takes time for the hair to regrow. Because of that, one of the key factors that I, and I think many of my colleagues, look for in terms of treatment and thinking about treating patients long-term is if responses are durable and if there is some level of confidence that if we continue treatment and stay on track, that they'll maintain responses.
Because of all of what I just said, the idea that we have responses that are maintained, or in some cases even improve off of treatment over the course of months, in this case, six months follow-up, is very encouraging. I think in general, as we collect more data on exactly this question, the more confidence that we have that there is the ability to maintain responses. If life gets in the way and people are not strict in terms of dosing for reasons that may be out of their control, I think that would be very encouraging for patients and physicians treating them. My initial response to the REZOLVE-AD biomarker data is also encouraging as well.
One of the things that we have seen very consistently in inflammatory skin diseases, and probably even more so specific to atopic dermatitis, is that biomarker changes with treatments are much more strongly predictive of clinical responses than other clinical responses in many ways. The sensitivity of biomarker assays is much greater than the clinical responses, and changes occur earlier and more clearly definable. From my perspective, whenever I see a new treatment or a treatment used in a new area, the question that I want to see is: Are we seeing molecular changes that are consistent with what we would expect clinical responses to look like? In short, we are seeing that here with REZPEG, and that provides, to me, a lot of confidence that the drug is addressing the underlying biology.
In general, once we see changes in underlying biology that we are looking for to normalize the disease pathology, then we have a lot more confidence that the clinical responses are going to be extrapolated in a much more significant way. Again, the biomarkers are something that I'm always looking for, actually, for drugs. Seeing the changes gives me a lot of confidence that we're going to see continued clinical responses that, again, extrapolate from what we've seen so far.
Great. Thank you so much, Dr. Ungar, for your thoughts. Operator, we can now open the presentation for questions.
We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Yasmeen Rahimi from Piper Sandler. Your line is open. Please go ahead. A reminder to unmute yourself locally if you are wanting to ask your question.
Yas, we cannot hear you.
We will move on to your next question. Your next question comes from the line of Julian Harrison from BTIG. Your line is open. Please go ahead.
Hi, thanks so much for hosting this, and congratulations on all the updates here. I will limit myself to one question. What I would love to get your perspective on more is any read-through to REZPEG's remitted potential in atopic dermatitis. I understand you have phase Ib results already providing some evidence of a remitted effect in atopic derm, but what would maybe be a win in your mind in terms of duration of responses off drug in the data you plan to share next year? Thanks so much.
Hi, Julian. It is Mary. Thank you for the question. I think right now the way we look at it is we have three different studies now that show strong durability of effect. When you go back to our phase Ib data and the Nature Communications paper, we dosed patients for 12 weeks. In atopic dermatitis, patients who had very severe, moderate to severe disease. When you remember, we then followed them for nine consecutive months off treatment. Those patients who had an EASI-75 response, 71% maintained their EASI-75 nine months off treatment, and 80% maintained their vIGA off treatment. Then we did our large phase IIb study.
In that study, when we looked at the maintenance cohort after 16 weeks of induction and then followed those patients through to 52 weeks, even on the Q12W dosing, where patients only had three doses, we had 83% of patients maintain their EASI-75. Now with the alopecia areata study, we have a third trial to show this durability of effect. I think when we unblind the data from the phase II, we are going to want to see that those patients with the EASI-75 in particular, the primary efficacy endpoint for registration, that they, with a high proportion, can maintain that EASI-75. I think we go into those data optimistic with these three different distinct clinical trials showing this level of durability after cessation of treatment with REZPEG. Thanks for the question, Julian. We look forward to sharing the data with you.
Your next question comes from the line of Yasmeen Rahimi from Piper Sandler. Your line is open. Please go ahead.
Team, can you hear me?
Oh, yes.
I am so sorry for the technical difficulties I am creating to my colleagues and you guys. Team, obviously, this data is absolutely outstanding. How has it changed your view in terms of the inclusion, exclusion of the patients that you will be enrolling? I know it seemed like from the prepared remarks that maybe there is not a modification to the phase III, but I would love to, given this new data onset, especially when it comes to the continued response you are seeing, if you expect that. A second quick question that we have been getting from clients is, have you seen a deepening of response depending on whether it is on SALT ≤10 or SALT ≤20 based on time of diagnosis? Thank you again, and sorry for my technical interruptions.
Yeah. Great. Thank you so much for asking the question. So, what we are excited about in our 850-patient phase III study is we will be enrolling patients who are JAK inhibitor naive and patients who have previously experienced, been on a JAK inhibitor, as well as adolescents. So when we think about the label, it is a broader label. With respect to some people have run clinical trials where they only look at patients that have an episode of their alopecia areata that is less than four years. Our data now provides the confidence that we can, again, address a patient population up to eight years of a current episode. So that was very exciting for us as well.
In terms of time of diagnosis, you just saw that we shared with you this woman, age 64, who had a diagnosis of 13 years, and she did quite well. So we do believe that we will be able to address patients both who have had a longer history of alopecia areata as well as shorter. Again, in our trial, we did enroll patients that were both severe, as well as very severe. So, we are feeling very optimistic going into the phase III, one, that we can treat a broad patient population with REZPEG, and two, that we really have identified the proper schedule and the proper dosing and the proper induction period, to have a very competitive first-line treatment for the disease. So thanks a lot, Yasmeen, for the question.
Your next question comes from the line of Samantha Semenkow from Citi. Your line is open. Please go ahead.
Hi. Good morning. Thanks very much for taking the question, and congratulations on this great data update. My question is just about the greater response durability you seem to see with the patients that were treated through week 52. I am wondering just broadly when you look on a patient level, is there a correlation between the amount of time a patient spends as a SALT ≤20 responder, or in any response for that matter, and the magnitude of the durability benefit that they received off treatment? Thanks very much.
Yeah. It is a great question. We have saved some data to share in a publication, Sam. I think you are touching on a really great point, that if a patient reaches a stable SALT ≤20, meaning that in the 52-week timeframe, they had achieved a SALT ≤20 on more than one time point while they were in the 52-week period. We did find that those patients have greater durability. When we do look at our open label extension, we can really hone in on those patients with a stable SALT ≤20 and really look at this longer maintenance dosing, like a Q12 week as opposed to just even a monthly. We are really excited about that. I will say in terms of magnitude of benefit, we are seeing a diverse group of patients achieving a deep magnitude of benefit.
I think when we have data from 850 patients, we will be able to look further in these subgroups and have a good sense. I think going into the trial, what we are excited about is both, if you had a current episode of less than four years or greater than or equal to four years, we see analogous efficacy, which you do not see with low-dose baricitinib, and that gives us a lot of confidence, too, about being able to treat both patients with a poor prognostic factor as well as those patients who have been easier to treat. Again, you brought it up, too. We really firmly believe the 52 weeks leads to improved immune tolerance and is the right timeframe for our induction period in the phase III program. Thanks for the great question.
Your next question comes from the line of Cha Cha Yang from Jefferies. Your line is open. Please go ahead.
Hi, team. Can you hear me?
Yes.
Yep.
Okay, wonderful. Thank you for hosting this call, and congrats on all the updates at EADV. There were quite a lot. It was great to see you guys. I have a question for Dr. Ungar, if he's still on. Just based on this new data and based on the totality of data for the alopecia program, can you tell us more about the specific types of patients that you see REZPEG being a natural fit for in your practice?
Sure. I'm happy to weigh in on that. When I'm thinking about treating patients, it's a conversation and an evaluation that's holistic, that has to factor in their comorbidities, their risk factors, the impact of their hair, their goals, and importantly, thinking about this as a chronic condition that requires ongoing treatment, certainly in the current paradigm that we have. Patients are very motivated to have their hair regrown and to maintain it, and they, therefore, are really looking for treatment very commonly and really willing to go ahead with that. With that said, there is also a balance of safety considerations and risks involved that factor into really any treatment, let alone a systemic treatment. That's part of the conversation that we have.
Based on the data that we see so far in the phase II in terms of the magnitude of clinical responses, in combination with the safety profile that we're seeing, and now adding to the mix this potential for kind of sustained responses, even with gaps in treatment. I guess the answer is it's hard to see, to me, who wouldn't be a candidate for this kind of approach, is a short answer. I don't know that I see any patient for whom this wouldn't be a strong consideration.
Thank you for your question. Your next question comes from the line of Tara Bancroft from TD Cowen. Your line is open. Please go ahead. Just a reminder to unmute yourself locally if you are wanting to ask a question. We will move on to the next question that comes from Arthur He from H.C. Wainwright. Your line is open. Please go ahead.
Hey. Can you hear me?
Yes.
Yeah. Hi, Arthur.
Hey. Hey, J.Z. and Mary. Congrats on the data. Maybe, for you guys, I just wonder, Mary, could you give us more color on the three withdraw in the 18 arm, and is any withdraw is, SALT ≤20? For Dr. Ungar, given the activity continued for the off-treatment period, how should we think about the continued dosing in the real-world use of this drug? Also for the team, given these kind of off-treatment data, are we rethinking about interval for the maintenance dose? Thank you.
Go first, and then I'll answer his question.
Yeah. Benji, can you please answer-
Oh.
-the second question-
Oh, sorry.
-first.
Yeah. Something cut out. Yeah, absolutely. I think that when I consider a drug with a profile like this in real-world use, the short answer is, I think the phase III data with hundreds of patients is going to give us a better guide to what to expect. When I am treating patients in the real world, we take things on a case-by-case basis, factoring in considerations of disease impact, currently how severe it is, what the depth of response is, and so on. I think in real world, once we have the data, we are going to take an approach that allows for, in a sense, the least exposure to a medication that will allow for continued responses.
That ultimately is going to have to be guided by data that is going to be produced in the larger phase III trial. With that said, I do envision that patients maintaining responses off of treatment, or at least having this kind of potential dosing flexibility in a way or dosing reassurance will allow for maybe a more nuanced or a more acceptable approach to saying the continued treatment will maintain responses. So if I got the question correct, the answer is, I think this is going to allow for, I think, a very high degree of confidence that patients who receive ongoing treatment, even if not at the two-week or four-week dosing interval, will maintain the responses. Because ultimately, the risk of losing response is a very high one that needs to be addressed in a very conservative way.
Thank you, Benji. Arthur, I can answer your other question. When you look on the waterfall plot, there are four patients who discontinued during the six-month off-treatment follow-up, and you can see one patient had a very deep response, and the three others had less of a response. All of our responders did make it all the way through to the six-month follow-up timeframe. That allowed us to do an NRI analysis for our data. So thanks for asking the question. But you can see that one patient that did go off had a greater than 75% decrease in their baseline SALT.
Your next question comes from the line of Tara Bancroft . A reminder to unmute yourself locally if you are wanting to ask the question. We will move on to the next question, which comes from the line of Mayank Mamtani from B. Riley Securities. Your line is open. Please go ahead.
Yes. Good morning, team. Can you hear me?
Yes.
Yes.
Okay, thanks for taking our question and congrats on the data. Just a quick one on the SALT ≤20 responses at 36 weeks that you lost about, I think, nine of 10 patients, and then versus the three patients you had deepening to SALT ≤10 at 52 weeks, or even like, I think 11, you had total deepening of responses, best response. Any T-reg or additional biomarker data you've done so far to understand those differences would be helpful to know. Just maybe remind us on the phase III SALT ≤20, placebo-adjusted treatment effect you've assumed as you finalize the protocol here. Obviously, the big question is that how do you have your protocol identify who gets this less frequent dosing versus maybe it makes sense for some patients to continue on that every 2-week regimen? If you could just maybe give us some color on the protocol criteria.
Thanks so much.
Thank you. I can start with the first question, and then Mary can answer the second one about the phase III design and other features. We have some ongoing work from the alopecia study, Mayank, particularly serum-based proteomic analysis. That work is just underway. We just actually got a lot of the Olink data very recently. It's something that we'll be analyzing over the coming weeks and months. But your question, obviously, looking at people that had detectable pathway changes like we've seen with our serum analysis and with our agonist mechanism, we'll be looking at that, comparing and contrasting that to atopic dermatitis patients. For pathway networks, we'll be doing the same analysis. Then, of course, we'll be looking at the people that responded and the data that we have that could be helping us inform and understand durability.
One thing that I do think is very important to add is that the way that we interpret all of these results is that the duration of dosing is important. That's pretty clear. It was very clear to us that even just the efficacy between week 36 and week 52 was dramatically different. We know that the duration of dosing is very important. There are biological reasons for that that I can go into. Besides the basic clinical pharmacology of duration of exposure, which is greater, we also know that in the hair cycle, it's about a three-month-long cycle as a hair follicle moves through one course. The T-regs clear roughly once per cycle. It makes sense why the duration of dosing is important and why the ability to restore T-regs is important.
As the follicle cycles, you want to keep making sure that there's a new source of Tregs that it has available for it. We think that's an important element of all this as well. Our future translational work, we hope to uncover many of those additional mechanistic features. We're even considering a translationally-focused study that will allow us to really dive into that. I'll turn it over to Mary to discuss the phase III questions.
Yeah. Thanks, Mayank. I want to clarify that there is the phase III for registration, and then there's what will be the long-term extension study. Just focusing on the registrational phase III part. For dosing, it will be 52 weeks. It will be every two weeks for the entire 52 weeks. Obviously that's a huge advantage over a daily oral JAK inhibitor. Then we'll compare the 24 micrograms per kilogram to placebo. When you look across all of the JAK inhibitor studies, the placebo rate is in the single digits, and many of them in the low single- digits. We've always said that our target product profile is to have a SALT ≤20 similar to low-dose JAK inhibitor, the baricitinib, and then the BRAVE-AA1 and BRAVE-AA2 studies is roughly 21% and 24% for SALT ≤20.
These studies, because of the size, 850 patients, it's very well powered to detect statistical significance. The size is not driven by the need to reach a P value, but rather, the FDA requires a certain safety database in this patient population. That's really the driver for the size of the study, so the trial is very well powered to detect a difference between REZPEG and placebo. Now moving to the long-term extension is where your question comes into how do you decide which patients would go on a monthly maintenance dosing, which patient would go on a quarterly dosing. As you saw, we did have patients continue to have hair regrowth, but some of those patients did not reach a SALT ≤20 or a SALT ≤10.
After one year, the patients who do not achieve a response could continue on Q2 week dosing. When we look at responders, we are going to look at deep responders and then randomize patients to two different maintenance doses to evaluate that. Those patients in that study are not for registration, but will certainly guide clinical practice once REZPEG is on the market for alopecia areata. We will share the study design for the long-term extension after we get started with our phase III program, which begins in the first quarter of next year. Thank you for the good question.
Your next question will come from the line of Tara Bancroft from TD Cowen. A reminder to unmute yourself locally if you would like to ask a question.
Hi, all. I just got an email from Cowen with a question. The question is, for the long-term extensions for the ZENITH AA phase III, I think you touched on this in a prior question, but can you discuss how you will evaluate both the monthly and quarterly maintenance doses? How will you determine which patients move to one of these two maintenance doses?
Yeah. Thanks. I just answered that question with Mayank, and we are right now designing the long-term extension. Again, patients that do not reach a SALT ≤20, those patients will continue on Q2 week dosing. Then we will really look and interrogate our data very closely and also look at the question that Sam brought up about patients with stable SALT ≤20 while on treatment to really determine which patients we would advance to a Q monthly and a Q quarterly dosing. We will share the full details of the long-term extension study after we get started here with our phase III program, and they are all really important and really great questions.
All to say that this dosing, Q2 week, Q monthly, and Q quarterly is really favorable to patients who, if they go on vacation and they forget to bring their JAK inhibitors, they can already start to experience hair loss just a week into their trip. Whereas, a biologic that is dosed every two weeks and has this durability of effect certainly is far more forgiving, helps with adherence, and could be instrumental to ensure patients don't lose their hair, even if they don't adhere very closely to their dosing regimen. Thank you for the good questions.
Your final question will come from the line of Jessica Fye from JP Morgan. Your line is open. Please go ahead.
Hey, guys. Good morning. Thanks for taking our question. Probably similar kind of vein as some of the other questions. I am curious how you guys are thinking about REZPEG treatment duration in alopecia, given what you are seeing with the sustained off-treatment effect. Just kind of a modeling question, right? How should we be modeling average duration of treatment?
Yeah. So, you are onto the same question that Mayank and others have asked, Cowen have asked, and we think it is a really important one. First, when you look at the SALT ≤20 curve over time, as you saw, there is not a plateau of the curve. And we are really excited and our advisors and Benji, who is on the phone here, really have noted that even those patients that didn't reach a SALT ≤20 by the end of 52 weeks, continuing treatment Q2 weeks could really push more patients over into being responders and having 80% and 90% hair regrowth. I think when we talk about the long-term extension, we are going to interrogate our data very closely. We are going to look closely at what is the threshold SALT ≤20, SALT ≤ 10, maybe even SALT ≤ 5, to decide which patients then go on the quarterly dosing.
That will be built into our long-term extension, and we have the ability to randomize patients to monthly and quarterly to really look at the optimal maintenance dose after one year of treatment. But suffice to say, if you don't reach a SALT ≤20 by the end of 52 weeks, we will continue those patients on Q2 week dosing to push over and convert more patients into a SALT ≤20.
There are no further questions at this time. I will now turn the call back to Dr. Jonathan Zalevsky for closing remarks.
Well, I'd like to thank everyone for joining us today. I'd like to thank all of the patients that participated in the clinical studies, all of the investigators that we work with, and all the employees of Nektar for all their hard work. Thank you all, and have a nice morning. Bye-bye.
This concludes today's call. Thank you for attending. You may now disconnect.