Let me go ahead and get started. I'm Stephen Willie, one of the Senior Biotech Analysts here at Stifel. And we have with us from Nkarta the technology's working. This is great. Nadir Mahmood, who is Chief Operating Officer, I believe, and Paul Hastings, who's also the CEO of the company. They're joining us via Zoom because I think, like a lot of people over the last week or so, they've run into some travel issues and could not escape SFO. We are going to do this virtually. I'm going to be on stage talking to a screen, which I believe will be the first time I've done this. I think this will work fairly seamlessly. Nadir and Paul, I appreciate you guys toughing this out and making this work. Thank you.
How are you back? Can you see us, Stephen, or no?
I can see you, yeah. I can see you.
Oh, good, good, good. OK, great. Nadir is President, and I'm CEO.
Thank you for the correction. I think most folks have some level of familiarity with the story. Maybe you can just kind of make some introductory comments, and then we can jump into Q&A.
Yeah. Nadir, do you want to give the overview?
Yeah. Thanks for having us, and appreciate the flexibility here with the logistics. Nkarta is an autoimmune disease company. We have a lead CAR-NK, a natural killer cell, targeted against CD19 that is currently in phase I clinical trials for autoimmune diseases. The cell therapy is engineered to have the expression of the CD19 chimeric antigen receptor, as well as a membrane-bound form of IL-15 to enhance its activity of persistence in vivo. We are currently testing this in two company-sponsored INDs. The first one is in lupus nephritis and primary membranous nephropathy. The other one is a basket trial, which contains systemic sclerosis, ANCA-associated vasculitis, and myositis. We also have two collaborative investigator-sponsored trials. One is in systemic lupus with Columbia University, and then the other one is myasthenia gravis with UC Irvine and Kansas University Medical Center.
We manufactured the cells out of our facility in South San Francisco. The company's been public for about five years. We just reported some data during our earnings on Monday, sort of just talking about the fact that we have a regimen that allows us to precondition treat the patients with fludarabine and cyclophosphamide leading to deep B-cell depletion. We're hoping to provide an update on sort of more efficacy data across the multiple indications that we have sometime in 2026.
The only thing I would add to that, Stephen, is to what Nadir just said, is that the deep B-cell depletion Nadir was talking about has just been presented again this morning by another NK company, Artiva, with their non-engineered cells in combination with obinutuzumab. So I think we're seeing deep B-cell depletion with NK cells now across the board. We saw it with Rui, we've seen it with Artiva, we're seeing it with Nkarta in all the patients we've treated with fludarabine and cyclophosphamide as preconditioning. This is a good sign for the field that we're getting the same kind of B-cell depletion that the CAR-Ts are getting. We're getting it rapidly. Now we've got to get the reset and the long-term durable clinical responses.
I think we're on our way to showing the world that an NK cell is probably an autoimmune disease engineered exactly for this disease because it's short-lived, resets the B-cells quickly, and allows the durability of clinical response. That's what we have to prove next. That's what we'll update on the data next year.
Yep. OK. I want to get into all those things. Maybe we can just start off a bit higher level. I think when we were having this discussion last year around the same time, there was a lot of talk around how competitive a process it was to find patients to enroll in some of these cell-based therapy studies, just given that the FDA was kind of requiring all these sponsors to step through the most refractory patients. How is that competitive pressure over the last 12 months or so relative to last year? Has that intensified? Has it de-intensified? What have you done as a company and, I guess, as a team to kind of improve your competitive positioning on the accrual front?
Yeah. All of the above, by the way. It's intensified in some areas, de-intensified in other areas. There's a lot of other people in the space now. This is a crowded space. It used to be that CAR-T and CAR-NK were crowded in oncology. Now they're crowded in rheumatology and autoimmune disease. Also, alongside of us are bispecifics, trispecifics, T-cell engagers, gamma delta T cells. There's a lot of agents now competing for the same patients in these clinical trials. That's intensified a little bit. What's interesting is we just came back from ACR, and we got a lot more intensity, a ton of traffic, and a lot of interaction with KOLs around our CAR-NKs, and interestingly, in lupus as one disease which was classically hard to enroll.
We're seeing enrollment pickup across the board, across all autoimmunity, with the NK cells because I think people have now they know what T cells can do. They've been studied in these diseases. They are consistently good. Can you do something better with an NK cell to allow a more accessible, off-the-shelf, convenient cell for the patient? I think we're seeing that that interest is high now. We're encouraged by that. The other reason that we're seeing that is that we've turned up the volume on a bunch of and you know our modus operandi is patients first. We've done a lot to increase awareness amongst the patient communities and to bring them services that will help them to want to enroll in a clinical trial where they have to travel from home.
We've reached out to the community centers in a model that allows us to refer patients into these major centers. There are no shortage of patients. I think anyone that tells you that is full of it. There are patients all over the United States who are not being treated in clinical trials, who need to be treated, who want to be treated. This notion that, well, maybe the market's not there because of fludarabine and cyclophosphamide, or this has nothing to do with any of that. What all of this has to do with in terms of enrollment is reaching, and you're seeing Fred do it at Artiva too, by the way, to give my friend some credit here. He's reaching out to community centers. That's where these patients are. No autoimmune patient wants to travel to New York City.
Look, we didn't travel to New York City today. Right? For the lack of convenience, and imagine a patient, by the way, who has to go from Albany to Manhattan to be in a clinical trial in the shit show that we're in right now with this overall administrative issue we have here in the United States. Being able to reach out to the patients, to get to them where they're sick, and bring the services to them as much as possible, or help them by providing services that allow them to have child care, child support, spousal support. None of these patients want to travel alone to give them that kind of service. It's not cheap, but neither are these trials. It's minimally expensive compared to the expense of the trial. It has paid off for us. We're really happy about that.
That's what we've done to increase awareness and to increase enrollment. We're seeing a much more rapid enrollment pace. We're seeing investigators more interested. I also think we made a mistake last year. We led the way in [silone] lipo depletion. We had a person in our CMO seat who was adamant about that. He was wonderfully adamant about that. He was thinking about safety first. Safety first with fludarabine and cyclophosphamide, we just saw it again this morning with Artiva's data. We've seen it with Rui's data. We're seeing it with our data. There are no safety issues with flu and cy that are severe. They need to be managed. Giving the right lymphodepletion regimen is important. We started off on the wrong foot. We switched strategies in the middle of last year.
We got that IND amendment approval from the FDA to move forward. We had to get all the local IRBs to go along with it. That is the other thing that has enhanced our enrollment. We had investigators coming to us saying, you know, cy looks really great. If you put flu in there, you are probably going to hit the cover off the ball versus a triple you might get a home run. What we announced the other day was in all the patients we treated with Flu/C y, deep B-cell depletion. Not all the patients with [silone] got deep B-cell depletion. It is incrementally better. I think that helped us also.
It gives us confidence that the combination of the lymphodepletion, full lymphodepletion, and cells is going to be what it's going to take, NK cells, to get the kind of results that maybe not quite exactly what Schett saw in those very selective patients, but to get that kind of level of response.
Yep. Yeah, no, it's good to see that the reinstitution of fludarabine into lymphodepletion has paid some dividends here, not only on depth of B-cell depletion, but also helping to drive patient enrollment. I think for us, for the investors in the room, it's certainly going to make our job a little bit easier as well when we try to competitively benchmark some of the data that's been generated on the standardized lymphodepletion front.
We'll go back and figure it out. By the way, patients first means safety first. If you go back and look down the road, where can you use silone? Probably less severe patients, probably patients who have diseases that are not as severe as some of the others, or the symptomatology is not as severe. There will be a place for that. I think we did it backwards. We admit that. Now we are going forward the right way. We feel we have the right strategy.
There are still some competitors out there that are looking at lymphodepletion-free regimens, i.e., with no preconditioning. Do you think that that's a derivative of the trend that you started last year and they just haven't figured out that you actually need these things? Or how do you think about that continuing effort?
The short answer is yes. Longer answer is, you know, hey, that they're trying is a good thing. We're all trying to look for safe regimens. But Nadir, wouldn't you agree what they're going to see is what we saw, which is good B-cell depletion with cyclophosphamide or bendamustine or whatever else you want to not call lymphodepletion, which is. But all of that will lead to sort of partial or semi-complete B-cell depletion. Add fludarabine, you get complete B-cell depletion. When you have the rheumatologist coming to you telling you they want to use it, then you know they know they can manage their patients through the process. So that's also the good news. I think what these other companies will find is what we found. But they've already established deep B-cell depletion with full Flu/Cy. They've already shown those data, a lot of those companies.
They are trying to maximize their product. I think what they are going to find is they are going to get some reset, maybe some quick reset, some quick depletion. It is not going to be full depletion. The reset is not going to be as robust. The clinical results are not going to be as robust. That is my prediction.
Yeah. I would just add to that. I think the whole excitement and promise in this space is that potential for these long-term drug-free remissions and sort of all the data that has pointed us towards seeing those types of effects really come from a lot of the autologous CAR-T space, where they did get that deep B-cell depletion, getting the B-cells pretty much undetectable in the periphery. You sort of see the clinical responses over time. I think as you look at the data from these modified or no lymphodepletion regimens, you only see partial. With that, you see relapses happening. You see patients having to get other immunosuppressive drugs pretty soon after starting therapy.
I think if we're really going to look at this as a truly transformative therapy for patients, you're going to lose that power when you kind of take away the ability to get that deep B-cell depletion. Now, there's others who are starting, like Kyverna , got some really interesting data in pemphigus. In the one patient that didn't get the complete B-cell depletion, they didn't see a strong response. I think there's something to be said about that ability to get consistent and durable deep B-cell depletion to drive sort of the change in the immune repertoire and biology that eventually leads to these drug-free remissions. They are early. Time will tell sort of how responses play out.
Stephen, when you go back to the competitive landscape thing you asked about earlier, this is really interesting, right, what Nadir just said. What we're going to see in the middle of next year by the way, we haven't seen deep B-cell depletion and durable responses with T-cell engagers, bispecifics, trispecifics, other cell types either, other than those that get studied a long time ago. Now we're all on an even playing field here. Everyone's going to have data about the same amount of time. Everyone's going to have the same kind of data. It's going to be easy for you guys to compare it. It won't be perfectly long-term data. There'll be some data. It'll be flu cy plus cells against things like T-cell engagers and others that are going to be presenting data.
I think when the market finally, and I hope, I would encourage every investor in the room with you and investors that talk to you to take a look at this whole market and say, is it time to kind of take a look at this whole thing again? Everybody got excited about the new shiny object in the room that was coming along, the T-cell engagers and the bispecifics and trips. They have not shown any data either. We are all going to be showing data about the same time. I think now people have to pick. What are they going to bet on? What do they want to bet on? They want to hedge themselves across everything. I think that is really where you have to go.
We're feeling really good that you're going to see a gradation of effect from the traditional agents, the old shitty steroids, to the targeted agents, to the trispecifics, bispecifics, T-cell engagers, to the cell therapies where you're going to see, OK, good, better, better, better, best. I'm hoping that we're in the best category. I think we'll be there.
Yeah, I guess I'd be curious. I mean, you kind of answered the question. Just your thoughts around the bispecific data that you've seen to date and how you see these drugs potentially being competitively positioned against cell therapy, whether it's either autologous or allogeneic.
Nadir, you're the competitive intelligence expert.
Yeah. I mean, I think there's probably going to be opportunity and room for multiple modalities in this space. I mean, it's just a big enough area with a large enough unmet need. We see indication-indication differences where in some cases you might see an opportunity for a cell therapy and others for bispecific. I think if you look at the early data emerging from the bispecific studies, some of them have looked really good in the early time points looking at some of the B-cell depletion and early responses. I don't think we've seen enough kind of on the long-term durability follow-up to sort of say if we're getting these drug-free remissions. There are other examples where we just haven't seen much in terms of responses. I think a lot of that has been in the RA space.
I think it's going to be mixed. If you think about sort of the experience in oncology, this could be an area where you might need more frequent dosing or higher doses. That then speaks to just how accessible it will be if you do have to tolerate additional tox because you have to dose higher or more frequently. There is sort of this convenience angle, I believe, that is being pitched. Maybe in some cases it's there. If you are dealing with a lot of the toxicities and sort of logistical challenges of having to dose regularly, then are you really that much more convenient than an autologous cell therapy?
In that space, that's where we believe a CAR-NK really has a unique opportunity to deliver the potential of the cell therapy effect on a response side, but with a much more convenient profile given the safety that we've been seeing in oncology and that we hope to continue seeing in autoimmune disease that makes it much more broadly accessible and logistically easier given it's off the shelf.
Add to that the in vivo companies, right? Those folks, what we've seen so far is encouraging data in healthy volunteers. We need to see the same thing from them. We need to see that the lack of lymphodepletion plus in vivo CAR-T or whatever cell type it is, is going to lead to consistent deep B-cell depletion and durable responses in sick patients. I think that's going to be another competitor that's coming along that people have to kind of watch out for and say, what have we seen so far? And what do we think we're going to see? Then how does that compare in terms of what might work with the landscape that's out there? I think it's time to really look at all that.
Yeah. No, it's going to be an interesting data point. Obviously, a lot of strategic activity of late around the in vivo CAR-T platforms. I think some of this data, right, where we're getting clinical responses that either use full lymphodepletion or even partial or none, to me, it's kind of an interesting thought experiment for the industry, right? I still think that there's a lot of investors that are asking the question of what is the contribution of lymphodepletion to some of these clinical responses that have been reported by Schett and some of these other folks. I think seeing that data maybe helps.
I'll tell you, the beauty right now for us is we've got two incredible rheumatologists on our team, Shawn and Rob, our CMO and Head of R&D and our VP of Clinical Development. Lymphodepletion alone will not do what we're seeing. Lymphodepletion alone will not do what Fred is seeing and what the CAR-Ts are seeing. It just won't. Go look at all the data. That's the thing to do. Go look at all the data with Flu/C y or other kinds of lymphodepletion. You're not going to see durability response. It's the combination that's creating this. I hope that will bear out with clinical results. If you just did a Flu/C y experiment, you're not going to see the kind of deep, durable B-cell depletion. You'll see deep B-cell depletion, but you're not going to see reset.
I think that's what the cells contribute, a part of what the cells contribute. I think that's what longer term is going to really show, the combination is the right way to go.
I think if you asked Georg Schett the question too, which I did at ACR just a few weeks ago, he's like, we've seen this before. He said, we've done the experiment. We've looked. We have a lot of history with cyclophosphamide. Also now looking at the potential what fludarabine contributes to that. To Paul's point, his comment was, he's like, I don't see these long-term drug-free remissions with just those agents. He's like, this is the power of the cells. He said exactly where they're going, what they're doing. I mean, there's a whole slew of translational work that's happening to understand that from whether it's lymph node biopsies, tissue biopsies, to look at sort of where do the cells get that the lymphodepletion agents or monoclonal antibodies, for example, don't get to.
I think given that he's sort of the pioneer in the space, I think there's a lot of experience and history there that he has too that suggests that the cells are a major contributor to the actual long-term durability and drug-free remissions that he's observed, at least.
Yep.
Yeah, we need more KOLs like Georg Schett. You're seeing that happen in the U.S. You're seeing the younger, more academically minded rheumatologists come along now and follow in his footsteps and actually take the risk of treating patients with new therapies. We need a lot more Georg Schetts out there. We're hoping we'll help those folks.
OK. Maybe just getting back to the clinical development program for a little bit here. I know one of the other updates that you reported earlier this week is now this harmonization of the two Ntrust trials that allows you to kind of streamline the dose escalation process. Maybe you could just kind of walk us through the logistics of that in terms of what it looked like before, what it looks like now, and how the way it looks like now can kind of expedite this enrollment and data generation process for you.
Let me tell you what it looked like. Nadir can outline for you what it looks like now because it's night and day. OK? It was patient-unfriendly before. It was ridiculous. We basically had to dose every single patient. Between the two different trials, Ntrust- 1, which is the SLE trial, lupus nephritis trial, sorry, and the Ntrust -2, which is the basket study, each patient in each indication had to, they could get their accessible on-demand cells immediately. One patient at a time, 28 days of follow-up. In SLE, you put in patient one, you have to wait 28 days. Put in patient two, you've got to wait 28 days. Put in patient three, you have to wait 28 days. Same thing with myositis, vasculitis, scleroderma. Each disease area, you could dose one patient at a time.
Now, Nadir, maybe you can outline from them where we're at. That was very hard because imagine a patient's lining up for your therapy and someone else gets that first slot. Then they've got to wait for that patient's 28-day safety. They might relapse by the time that patient gets through their 28 days. We were encouraging them to go to other studies because we don't want to lose them. That was just inconvenient for everybody. Nadir, maybe now you can outline where we are.
Yeah. And just to highlight a significant point that Paul made there, even in the basket study, which was three different indications, but in a basket trial, each one was being treated independently and differently. You have to wait for that stagger in each indication even though they were part of the same IND, so sort of defeating that purpose and concept of a basket study. What we have done now, and FDA has been very engaging and thoughtful about considering this for us and implementing it now, is we now can start at a given dose level with a sentinel patient. Regardless of indication, first patient gets dosed at a particular dose level. We wait 14 days. Then we can dose any number of patients across all indications.
Irrelevant of whether that's an LN patient or systemic sclerosis, myositis, if it's Ntrust -1, Ntrust -2, that sentinel patient, the first one to receive that dose level, then serves as the trigger. Fourteen days later, there are no more restrictions. We can enroll up to six patients across each of those indications as we continue sort of in this dose escalation and that dose cohort. With this combined integrated independent drug safety monitoring board, data safety monitoring board, what we can do now is we take the data collectively across all the indications. We can go and have the conversation about dose escalating or advancing beyond that. It has really streamlined the process and kind of kicked into gear enrollment in a way where we do not have to go through this painful cohort management process where folks are waiting.
We had our hands tied behind our back. Now we can really kind of think about lining up patients and getting them on the study and on trial as quickly as possible.
This took a lot of work, Stephen. I went to two FDA listening sessions where Makary and Prasad were. They actually listened. Two weeks later when we submitted a letter saying, hey, what Paul said, we've got to get rid of this stagger. Can we do it now? They came back to us rapidly. We were pleased with that response. Nadir also had contacts with RFK's office. We were kind of doing the strategic edge. Shawn was doing the tactical edge. They came back to us. They had two separate meetings set up, one for Ntrust- 1, one for Ntrust- 2. Shawn said to us, that's not going to work. Can you get them to have one meeting? Guess what? They gave us one meeting.
They said, why are we doing this with two different trials? Why don't we let you combine the two trials and be able to manage it? There are still going to be two teams. We are going to work closely together with them so that whatever happens with Ntrust -1 can happen with Ntrust -2 so it is consistent, as you mentioned earlier, across the board. All of that took some work. We were encouraged with the FDA, the new administrative FDA, that really likes cell therapy and really wants to make this work.
You're at dose level 2 now. You were at 1 previously. What is dose level 2 from just kind of an absolute cell count number perspective? Do you envision stepping up dose meaningfully above that?
Full lymphodepletion, 2 billion cells days 0, 3, and 7.
OK.
That's 2.46 billion cells in a cycle right now. That's the dose, right? Rui's gone as high as 4, 4.5 , I think, Nadir, right? Yeah, and more than 3x , I think, isn't it? Six times or something like that?
Five doses in a cycle.
Yeah. So probably the dose is somewhere between a billion and that dose. Hopefully, it's two. That's what we're hoping.
OK.
We can dose escalate beyond that too. We've got the ability to go up at least 2x.
I know the opportunity for outpatient administration is kind of an attractive aspect of the longer term value proposition here. Has there been any engagement with FDA just on allowing for outpatient administration at some point in the construct of this study?
Yeah. I mean, we had it in oncology, as you know. They'd be sort of infusion centers. It's like a rheumatology clinic would have a chair and a person that could thaw the cells. Yeah, you could do it that way. We're going in that direction. That's where we want to head. Yeah. That's, by the way, when Makary and Prasad asked, where are we losing it to China, the Chinese have done a fantastic job of enrolling patients in China because they don't have all this horse manure going on between big community centers and their cell therapists and their rheumatologists. You've got an integrated system where people can get treated. We want to do that here as well. If these cells are allogeneic off the shelf on demand, you don't need a, no offense, you don't need a cell therapist to administer them.
You need a rheumatologist, someone that can thaw cells in a chair. We are pushing the FDA to go in that direction.
Maybe a couple of questions here in the minute that we have left. One of your peers, Kyverna, is now saying that they have regulatory alignment with FDA on the potential registrational capacity of kind of a single arm, 14-patient myositis cohort. I think they're talking about reaching alignment with the agency in a couple of different disease states, including myasthenia, including lupus nephritis. Is this kind of in line with what you thought the agency would ask for in terms of what would be needed? Or do you kind of view this guidance that they have as kind of an incrementally positive development?
We all have alignment with the FDA on what the next steps are. Every single company that's dose escalating that's gone to the FDA, that's had the foresight to do it, has alignment about where they can go next. We have that same alignment, right? What you have to have is an indication that they like and you like. They've seen you dose escalate. They've given us the leeway to say, if you're finished with dose escalation, your expansion could be pivotal. That's across the board. Fred got it at Artiva. Stephen got it at Kyverna. Now, Stephen has more data. He knows where he's going to go with what indication. I think he's got agreement on what that study actually looks like, I think. We all have agreement that there's this atmosphere at the FDA where cell therapy is really important to them.
This is a good thing for cell therapy companies across the board. It isn't just Kyverna or whoever has a special agreement with the FDA. We all have that agreement.
I think it was definitely a positive when we heard the initial feedback because I think Kyverna was the first with their dermatomyositis and antisynthetase syndrome potential registrational trials that FDA was looking at cell therapy and autoimmune in a similar manner to sort of what we had seen in the oncology space, right, that these would not be these sort of placebo-controlled large registrational trials, that the transformative potential here really speaks to being able to move quickly and be adaptable. I think that was very encouraging. That is sort of the, hopefully, the consistent message that we and others will continue to see.
Yep. Maybe just last question, if you can just talk about the balance sheet, cash runway, and just kind of what that allows you to execute on here.
Yeah. So we've got, as of the end of the third quarter, over $300 million in cash. That gives us runway, very importantly, into 2029, right? As we look at the landscape and kind of milestones ahead for us, we've got a lot of flexibility, a lot of optionality here to continue to be focused on clinical execution, creating value, and not have to worry right now about raising money. We're in a very fortunate position there.
All right.
The thing to look at now, Stephen, competitive-wise, is who's got the cash to see this through? Because anyone who thinks they're going to raise capital today in this space is fooling themselves unless you want to raise it at $0.20. I mean, now what you have to see is the folks have the capital to get them through the milestones they need to get through to have that proof of concept. And that's where we're feeling.
All right. Nadir, Paul, I really appreciate you guys making this work. Thanks a lot.
Yeah, we do too. This was fun, Stephen.
Always good to have you.
Let's do this more often.
Yeah.
I'll stay in our bubble. You can hang out in New York. How's that?
That's fine. That works well.
All right. Thank you, buddy.
Take care.
Bye.
Bye.
Thanks. Bye.