Good morning, everyone. Thank you for joining us at the H.C. Wainwright 28th Annual Global Investment Conference. My name is Emily Bodnar, and I am an Equity Research Analyst at H.C. Wainwright. I am pleased to be here with Paul Hastings, CEO of Nkarta, and Nadir Mahmood, who is coming shortly. Maybe to start, for those who are newer to the story, and given all the recent changes in the cell therapy space, give us a bit of background about your CAR-NK allogeneic cell therapy platform and some of the ongoing programs.
Yeah. We are a fully off-the-shelf allogeneic, here he comes. This is his question, actually. I wanted to give it to him because he is really good at this. Emily wants to know about the platform. You want to give her the platform?
Yeah.
Nadir is our President, by the way. I am the CEO.
Great. Well, thanks for having us. As a quick overview, the company is an autoimmune disease company. Our lead program is NKX019. That is a CD19-directed CAR natural killer cell, NK cell. That is engineered to express a chimeric antigen receptor that recognizes CD19 antigens on pathogenic B cells, and it is also engineered to express membrane-bound IL-15 to enhance its persistence and activity in vivo. We have been studying this program now in phase I-II clinical trials in a variety of different autoimmune indications. The first one, Ntrust-1, is primarily nephrology indications, lupus nephritis, primary membranous nephropathy. Ntrust-2 is our basket trial, which is focused on systemic sclerosis, myositis, vasculitis, and we recently added rheumatoid arthritis to this as well.
Our programs have been in the clinic for a little bit, and we are excited to be presenting our first data set later this year at the American College of Rheumatology Convergence meeting in Orlando in November.
Yep. There has been a lot of interest, obviously, for cell therapy in the autoimmune disease space, and we have had several companies, both autologous and allogeneic, which have now reported data across various indications. What role does CD19 play in these diseases and why is a CAR-NK approach potentially differentiated here?
All right. Let us talk about CAR-NK first and why that is differentiated. These cells are allogeneic. They are fully off the shelf. The accessibility of these cells is the patient goes to the clinic, the physician diagnoses the patient or qualifies the patient as eligible for cell therapy, and the physician goes to the shelf, picks up the vial of NKX019, and injects it into the patient, just like you would with an antibody. The accessibility is one factor versus autologous therapies, where you have to wait 30 days to manufacture, or if you wait for more rapid manufacturing, you can run into all kinds of issues with rapid expansion. Accessibility is one. Safety is another. To date, we have seen no CRS, no ICANS.
None of the toxicities that are associated with the rapid release of cytokines, associated with the rapid expansion of T cells, occurs with NK cells because the cell has a short half-life. It goes in, it targets, whether it's in the case of autoimmune disease, autoantibodies or bad B cells, and it does its thing and it leaves. You don't have it hanging around for a long time. Therefore, the toxicity profile of the NK cell could be, in autoimmune disease, much better for the patient than the toxicity profile of CAR T. We don't have the expansion, we don't have the toxicity issues that go along with the expansion. We have accessibility, and we have the ability to manufacture these cells and give you Nadir's NK cells.
I don't have to wait to get your cells, to have you wait for those cells to be administered. Anything to add to that?
You want me to talk about CD19 as an antigen?
Yeah. That was a simple question.
Yeah. CD19 is a marker that's expressed on the surface of B cells. It is probably, over the course of the maturation and life of a B cell, the most broadly expressed across the various stages of growth. You have other markers, CD20 and BCMA as well, but CD19 is the broadest coverage. B cells are the type of cells that produce autoantibodies that drive these particular autoimmune diseases. What we've seen from some of the pioneering work out of a German academic group in Erlangen University was the ability to target and deplete killing B cells by targeting CD19 expression. It was that data set that created this first real glimpse into potentially driving these drug-free remission and responses that have now lasted for, in some patients, multiple years.
It was that excitement that I think drove everybody into the field to really think about this concept of depleting and eliminating the bad B cells that are expressing CD19, that drives this immune reset mechanism that gives you these really prolific responses. We really believe that by engineering in an ability to recognize and kill CD19-expressing B cells, we're hitting probably the best target, or at least the one where there's the most demonstrable data showing efficacy right now.
Yeah. You mentioned the short half-life of NK cells. How has that translated to your data so far in terms of B cell depletion and recovery of B cells in the naive format relative to autologous CAR T therapies and other allogeneic CAR Ts?
Yeah. Well, you're going to see that at ACR in a couple of weeks. Look forward to our data being presented at ACR. You're going to see some myositis data and some scleroderma data. You're going to see how those cells act and where they might have advantages. Where they theoretically have advantages in autoimmune disease is rapid B-cell depletion along with fludarabine and cyclophosphamide, which is lymphodepletion. We believe that what you need to get a rapid depletion of B cells and then a reset of those B cells into memory B cells, good B cells, is a rapid depletion of the B cells right off the bat when you give lymphodepletion.
You give full lymphodepletion, which rheumatologists came to us and said, "You ought to do that instead of just having half lymphodepletion." So give full lymphodepletion, get rapid B-cell depletion, allow the cells to then do their thing, continue to help with the B-cell depletion, but also help with the reset of the B cells. The combination of those two things should give you rapid responses and durable responses. You probably do not need cells to last for a long time to do that in autoimmune disease, because what you want to do is reset the B cells. What you are seeing even with CAR T data is that they are working rapidly on these cells and that the cells are reset. Then you have the B cells that continue to expand, and that is where I think some of the issues come in.
Makes sense. Maybe talk to us about dosing a bit. You are currently dosing 4 billion cells per dose, and that is three doses per cycle. So, why specifically 4 billion cells, and do you think that that is going to be your go-forward dose?
It could be. I can say that we went from 1 billion to 2 billion to 4 billion, and we have the potential in this trial to go higher. So if one sees, and by the way, what we expect is a dose response with better responses with higher doses. It could be that 4 billion does the trick. But if 4 billion does the trick and the drug is still safe, as a drug developer, our job is to make sure we understand what the maximum tolerated dose is and what the minimal effective dose is. So it could be that 4 billion is a minimum effective dose, and then another dose, 6 billion or whatever, could be a maximal tolerated dose, or maybe not.
But we have the option to expand right now, just like we had the option to go to full lymphodepletion or half lymphodepletion if patients come into the trial and need half lymphodepletion. So we are going to be flexible in the trial design, but what we are expecting is that 4 billion cells times three is a very effective dose for patients with autoimmune disease.
I think it's just worth sort of highlighting this nuance that Paul pointed out, which is NK cells don't expand in vivo like T cells. I think with T cells, you don't need to spend time doing dose finding, true dose finding the way that we have traditionally with antibodies, small molecules, et cetera. But it is that in vivo expansion that is also directly correlated with efficacy and toxicity, which makes it great in some ways, but has all these other concerns that are now, I think, even getting even more attention. But with NK cells, we do have to spend the time finding that right dose, and I think that's sort of where we've gotten to over the course of this trial, as Paul pointed out.
Yeah. Another way to look at this is that the dose expansion with T cells is the expansion of the T cell, where the dose expansion with NK cells is increasing the dose because you give 4 billion cells, and you get 4 billion cells. If you were to give 4 billion T cells, that's going to expand to, what's the number you think?
I mean-
Infinitely higher than 4 billion cells, right?
Yes. 100 billion. That is why they give a million per kilogram or so.
Maybe let us talk a bit about scleroderma and myositis, given those are the key topics for the ACR readouts. Why were these two indications specifically highlighted? Was that driven by more data you have had or kind of quality of data for those indications?
Yeah. Let us talk about the landscape here for a minute in autoimmune disease. We were in oncology. We switched to autoimmune disease because we felt it was a good place to go. We felt that NK cells were handmade for autoimmune disease. The field was crowded in oncology first, and now the field is crowded in immunology and autoimmune disease. Myositis and scleroderma for us, and now rheumatoid arthritis, provided us with indications where getting enrollment was easier. Try to enroll a lupus trial right now with all the companies that are trying to roll lupus trials. It is ridiculous. The patients are all in the community, and all the centers are academic medical centers. What we did was we started focusing on community centers, and those community centers had a lot of myositis patients and a lot of scleroderma patients, and a lot of RA patients.
They came to us and said, "You should go in RA because we believe that CD19 is a better target for RA than another target." We were able to enroll patients, we were able to dose escalate and enroll patients. Unfortunately, the lupus patients were left behind because those clinicians that were dosing lupus patients could not find the patients to begin with or did not get the right patients because they did not know where to get them. These guys that came in to do the community-based enrollment were able to enroll these myositis and scleroderma patients. The numbers were better. The numbers were better, and the data were better. Therefore, when you look at that, you say, "Okay, if you are going to go forward, why would we go forward with five different indications as a small company?" Now we have cash until 2029.
We could probably g o forward with a couple of different indications in phase III on the current cash we have, so we wouldn't need to raise capital. The way we look at scleroderma and myositis are they are potentials to go forward with single arm trials with unmet medical need, in phase III trials that are doable and accessible for a company of our size, and probably makes more sense from a speed point of view as well, right? That's where those two indications could be very exciting for us, and we could go back to lupus, we could go back to vasculitis, we could go back to those other indications, even oncology down the road when we have success in the focus that we focus on, which would be those two diseases or maybe potentially RA after that.
Talk to us about efficacy endpoints for scleroderma and myositis. We've had some initial data from companies like Cabaletta, which is an autologous CAR T in myositis. Artiva Biotherapeutics had some scleroderma data, though early. Generally speaking, what should investors be looking for in these trials?
I think they need to look for T-cell-like efficacy with NK cell-like safety. Right? The kind of efficacy that they're seeing, moderate to major responses in both scleroderma and myositis with NK cells with a safety profile that offers an advantage. I think if you have that, you have a home run.
Yeah.
Yeah. I think in particular, if you think about scleroderma where the main endpoint is sort of this composite score, right, it's called CRISS, the composite remission index in systemic sclerosis, composite response index in systemic sclerosis, where it's sort of this mixture of a bunch of different Patient-Reported sort of questionnaire, clinician assessment, but then you also have skin scores as a component.
Patient global assessment, right?
Patient, yeah, patient global assessment. Then there is a skin score which measures skin thickness and fibrosis. You have these subjective and objective measures, and I think people typically say you want to see at least something that has three out of those five areas are improving in 25% or more of the patients. When you get to 50% or 75% scores, then I think you are really kind of hitting it out of the park. Not everybody is, or very few have gotten to that level. In myositis, like Paul said, that moderate to major response is a Total Improvement Score, which is also another composite index.
Right. The easy way to look at this is moderate to major responses in both disease areas. The more complex way, which Nadir just explained, is when you use these disease activity indices. As a person with an autoimmune disease, I have Crohn's disease since the age of 13. If you look at the Crohn's Disease Activity Index, and you try to measure how a Crohn's patient responds in a clinical trial with Crohn's Disease Activity Index, it gets complicated because of all the different factors.
One of the things that we are doing, by the way, despite that, companies are reporting these disease activity index and moderate to major responses within those indices are, quote unquote, "validation for moving into phase III." If you really want to hit the cover off the ball here, one of the things we are doing is alongside these CRISS and TIS, which is the score for myositis. I do not even know what TIS stands for but it is-
Total Improvement Score.
Total Improvement Score myositis. The other way to look at these diseases is to actually, instead of taking an academic approach, like if you look at an SF-36 form and it says, "When you go into a phone booth, do you get anxious?" Who goes i n a phone booth these days? People who enroll in the trials don't even know what a phone booth is. The young people, because we don't have phone booths anymore. But these instruments tend to be old, antiquated, and the only thing that the FDA accepts now.
We are working with the FDA, and the FDA said, "Go look at patient-reported outcomes." Simultaneously with these two trials in myositis and scleroderma are these patient-reported outcome, separate IND, working with the trial centers that are doing our trial and actually sitting down with patients in the comfort of their home and saying, "What does it feel like when you entered this trial and what does it feel like now?" Instead of saying, "My disease activity index is much better now," they said, "You know when I started, I was exhausted, I couldn't breathe. I had diarrhea nonstop in certain indications," or, "I had the inability to swallow food because the scleroderma was around my vocal cords, was around my taste buds, was around everything and just strangulating everything. I couldn't open my mouth.
Now I can open my mouth." We're taking these patient-reported outcomes and creating a separate publication on those so that we can start to change the way that people look at the reviewing of these trials more in a patient-centric, new FDA sort of way. We're doing that alongside with the patient-reported outcomes you normally see in clinical trials, which are these older instruments. Hopefully we'll change that paradigm over time. But when you actually ask a patient, when they look at their TIS score or their CRISS in the case of scleroderma, if you ask them to identify the symptoms that they have, you won't find those words in those instruments. This will hopefully help everybody look at these diseases more in the way they should be looked at, is how does the patient get impacted by them? We're hoping to do that.
We may not have that data by ACR, but we will definitely have that data for a future medical meeting. One of our primary investigators in the study is the primary investigator on that study with our patient advocacy group that is doing the study.
Yeah.
I am excited about that.
That is very interesting. I think with Patient-Reported Outcomes and also in general, how are you kind of thinking about durability, and how do you kind of measure that durability when it comes to PROs as well?
Three months, six months, 12 months. You give someone three months durability, they want six months. You give them six months durability, they want 12 months. You got to let the trial play out and you got to let We are going to have at ACR three months of durability on a handful of patients. There will be a bigger handful of patients that have been enrolled in the study, but because the study is enrolling now, you are going to get the earlier patients with three months of follow-up. You will get 2 billion cell patients and 1 billion cell patients with lots of follow-up, but you will have that with the 4 billion cells. But then that trial will continue.
What you want to see with a cell therapy, when you think about the step therapy of patients with these diseases associated with rheumatology, what it looks like right now is that small molecules give you around a 20%, 30% response rate. Antibodies and T-cell engagers, we don't know what T-cell engagers will do yet, but antibodies will give you a number that's higher than that. Cell therapies right now are showing numbers that surpass both of those.
So what you want to see is those kinds of numbers with the kind of durability you see in the smaller numbers for the original agents. Six months, 12 months. 12 months of durability from one cell therapy. By the way, another advantage of NK cells, you can redose them if you want to, if you need to. So I think that's an advantage you have. But if you can give 4 billion cells day zero, two, and four with lymphodepletion and have a long-term one and done durable response, that would be perfect. If you can have a year, if you can have two years, that would be okay even.
But a real durable response with a cell therapy would be a long-term response for that patient so that those B cells have been reset and they don't go back to being those awful bad B cells that are throwing out autoantibodies. It's causing inflammation and rheumatoid arthritis or, in the case of scleroderma and myositis, the thickening of the skin to the point where these patients can't move.
Yeah. Maybe as the last question, how should we think about next steps from here? Are you going to be at the point where you could potentially go to the FDA and discuss pivotal trial designs, or at what time point do you think you could potentially do that?
We believe we will with this data set, and whether we continue to dose escalate or not. But we definitely believe that by the end of this year, we'll have a very clear strategy of where we're going in phase III.
Yep. Absolutely.
Got it. Scleroderma and myositis are likely to be go forward indications?
Those are the two indications that you'll see data on at ACR.
Cool. Great. Thank you very much, Paul. Thanks, Nadir. Thanks everyone who's been listening in. Hope everyone has a great rest of their day.
Thank you.
Thanks