Q4 2019 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the Nektar Therapeutics fourth quarter 2019 financial results Conference.

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Nektar Therapeutics fourth quarter 2019 financial results conference. At this time, all lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star and then one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero.

This time, all participants' lines are gonna listen only mode. After the speakers presentation, there will be a question and answer session.

Good question. During this session you need to press Star then one on your telephone.

Please be advised to today's conference is being recorded you require any further assistance. Please press Star then zero.

Operator: I would now like to hand the conference over to your speaker today, Ms. Jennifer Ruddock, Head of Corporate Affairs. Ma'am, you may begin. Thank you, Crystal. Good afternoon, everyone, and thank you for joining us today.

I would now like to hand, the conference over to your speaker today Ms., Jennifer Ruddock head of corporate Affairs, Ma'am you may begin.

Thank you Crystal good afternoon, everyone and thank you for joining us today.

Jennifer Ruddock: With us are Howard Robin, our President and CEO, Gila Bruchery, our COO and CFO, Dr. Jonathan Zalevsky, our Head of R&D, and Dr. Wei Lin, our Head of Development. On today's call, we expect to make forward-looking statements regarding our business, including clinical trial results, timing, and plans for future clinical trials, as well as timing and plans for future clinical data presentations at medical meetings. The therapeutic potential of our drug candidates... Outcomes and Plans for Health Authority Regulatory Actions and Decisions

With us or Howard Robin, our president and CEO.

Killebrew, Sri our COO and CFO.

Dr., Jonathan Dylewski, our head of R&D and Dr. Whalen, our head of development.

On today's call, we expect to make forward looking statements regarding our business, including clinical trial results timing and plans for future clinical trials.

Timing and plans for future clinical data presentations at medical meetings.

The therapeutic potential of our drug candidates.

Outcomes and plans for health authority regulatory actions and decisions.

Jennifer Ruddock: Financial guidance and certain other statements regarding the future of our business. Because these statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict, and many of which are outside of our control. Important risks and uncertainties are set forth in our Form 10-Q that we filed on November 7, 2019, which is available at sec.gov. We undertake no obligation to update any of these statements as a result of new information, future developments, or otherwise.

Financial guidance.

Certain other statements regarding the future of our business.

Because these statements relate to the future they are subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control.

Important risks and uncertainties are set forth in our form 10-Q, we filed on November seven 2019.

She's available it FCC dot Gov.

Undertake no obligation to update any of these statements whether theres also as a result of new information future developments or otherwise.

Jennifer Ruddock: A webcast of this call will be available on the IR page of Nektar's website at Nektar.gov. With that, I will now hand the call over to our President and CEO, Howard Robin. Howard?

A webcast of this call will be available on the IR page at Nektars website.

Dr. dotcom.

With that I'll now hand, the call over to our President and CEO Howard Robyn Howard. Thank you Jennifer and thank you to everyone for joining us on call today on today's call. We will provide an update on our pipeline compounds, which include our I O pipeline of Nektar of Nichter aisle to Io 15, and TLR antagonist candidates and narrow.

Howard W. Robin: Thank you, Jennifer, and thank you to everyone for joining us on the call today. On today's call, we will provide an update on our pipeline compounds, which include our IO pipeline of Nektar IL-2, IL-15, and TLR agonist candidates, and our immunology program Nektar 358. We will also review our planned upcoming milestones for these programs and provide our financial guidance for 2020. But before I discuss the progress we made with our I.O.

I mean, how would you probably next week 58.

We've also review our planned upcoming milestones for these programs and provide our financial guidance for 2020.

But before I discuss the advancements we made with our I O in immunology portfolio I'd like to briefly cover some challenges we face. This here that are outside of the core focus of our pipeline starting wouldn't after 181 as you know we made a strategic decision last month to withdraw the N. da for Nektar 181, the Nektar one either one.

Howard W. Robin: and immunology portfolio, I'd like to briefly cover some challenges we faced this year that are outside of the core focus of our pipeline. Starting with Nektar 181, as you know, we made a strategic decision last month to withdraw the NDA for Nektar 181. The Nektar 181 adcom was the first of several that week that were negative for the opioid class, and it became clear from these discussions that the bar for approval of any opioid compound is much higher than what was established by approvals in the past. Additionally, since the time that we submitted our NDA, liability in the opioid class has become a significant consideration with numerous lawsuits filed against opioid manufacturers and distributors.

Calm was the first of several that week that were negative for the opioid class and it became clear from these discussions that the bar for approval of any opioid compound is much higher than what was established by approvals in the past.

Additionally, since that time that we submitted our India.

The liability in the opioid class has become a significant consideration with numerous lawsuits filed against opioid manufacturers and distributors and based upon all of these factors. We made a business decision that further investment could not be justified for medicine in this class, which would have been at the expense of sacrificing important developmental work for him.

Howard W. Robin: And based upon all of these factors, we made a business decision that further investment could not be justified for a medicine in this class, which would have been at the expense of sacrificing important developmental work for immuno-oncology. As we look back at our successful development efforts for this program, I want to thank our team for their hard work, thank the patients and physicians who participated in our clinical trials, some of whom came to speak at the ad... We did not take this decision lightly but believe it is the appropriate action to take as we focus on the advancement of our ILO and immunology. Secondly, as you know, we were conducting the ATTAIN study for our chemotherapy agent, Anzeald, in advanced breast cancer patients who also had brain metastasis, which compared Onziold to a chemo agent of choice in these patients.

You know one called you pipeline.

As we look back at our successful development efforts for this program I want to thank our team for their hard work. Thank the patients and physicians who participated in our clinical trials someone who came to speak at the outcome.

We did not take this decision why do we believe it is the appropriate action to take as we focus on the advancement of our Otwo and immunology pipeline.

Secondly, as you know we were conducting the attained study for our chemotherapy agent ONZEALD in advanced breast cancer patients, who also have brain metastasis.

Which compared ONZEALD to a chemo agent of choice in these patients you obtain study was being partially funded from a former partnership we had with Daiichi sankyo and you'll recall that the attained study was designed based upon a doubling of survival that we saw in a subset of patients from earlier Beacon study of ONZEALD in it.

Howard W. Robin: The ATTAIN study was partially funded from a former partnership we had with Daiichi Senkyo, and you'll recall that the ATTAIN study was designed based upon a doubling of survival that we saw in a subset of patients from the earlier BEACON study of on-field and advanced breast cancer patients with brain mesh as compared to chemotherapy. The primary analysis of the ATTAIN study was completed late last week, and while Anziel performed at least as well as the Physician's Choice Standard of Care for PFS and OS, the study endpoint of improvement in overall survival was not met. As a result, we're planning no further clinical work on Anzald, and we're grateful to the patients and their families who participated in these trials.

<unk> breast cancer patients with brain Mets as compared to chemotherapy a physician's choice.

The primary analysis of the attain study was completed late last week and while ONZEALD performed at least as well as the physician's choice standard of care for PFS and unless the study endpoint of improvement in overall survival was not met.

As a result, we're planning no further clinical work on ONZEALD and we're grateful to the patients and their families who participated in the attained study.

With these actions behind US our company is highly focused in the core areas of immuno oncology and immunology, where we believe we have the potential to create transformative medicines for patients.

Howard W. Robin: With these actions behind us, our company is highly focused on the core areas of immuno-oncology and immunology, where we believe we have the potential to create transformative medicines for patients. Our IL portfolio is highly differentiated with two strong cytokine programs, IL-2 with BEMPEG and IL-15 with Nectar 255 and a small molecule TLR agonist program. This unique portfolio allows us to capture opportunities that span both solid and liquid tumors. In immunology, Nektar 358 is advancing into several clinical studies and multiple autoimmune conditions, the first of which are lupus, ectopic dermatitis, and psoriasis. And I'll talk more about those later on in the call.

Oh portfolio is highly differentiated with two strong cytokine programs I, all too with Mpeg and Io 15, with Nektar 255, and a small molecule TLR antagonist program. This unique portfolio allows us to capture opportunities that span both solid and liquid tumors in immunology Nektar 358 is advancing into several clinical.

Studies and multiple autoimmune conditions, the first of which are lupus atopic dermatitis in psoriasis I'll talk more about those later on the call.

Howard W. Robin: Let me first start with BEMPEG, our IL-2 pathway program and T-cell stimulant. Earlier this year, we announced a revised collaboration agreement with our partner BMS. Under the new joint development plan, we expanded the BMS Nektar Active Registrational Programs for the doublet of BEMPEG and NEVO from the three studies that were underway to now include seven studies in first-line and adjuvant settings across four tumor types with more than 3,000 patients. The new registrational program builds upon the opportunity in melanoma, bladder cancer, and renal cell carcinoma, and also adds plans for a phase two study in In addition to the three ongoing registrational trials in first-line metastatic melanoma, first-line CIS-ineligible metastatic bladder cancer, and first-line metastatic RCC.

Let me first start with Mpeg Rialto pathway program, a T cell stimulator.

Earlier this year, we announced a revised collaboration agreement with our partner BMS onto the new joint development plan, we expanded the BMS nektar active registrational programs for the doublet a been pega nivo from the three studies that were underway to now include seven studies in first line and adjuvant settings across four tumor types with more than three.

2000 patients the new Registrational program builds upon the opportunity in melanoma bladder cancel and renal cell carcinoma and also adds plans for a phase two study in first line non small cell lung cancer.

In addition to the three ongoing Registrational trials in first line metastatic melanoma.

Personal lines CES ineligible metastatic bladder cancer and first line metastatic RCC, we've already launched a new phase three study in muscle invasive bladder cancer and we are initiating a phase three study an adjuvant melanoma.

Howard W. Robin: We've already launched a new phase three study in muscle-invasive bladder cancer, and we are initiating a phase three study in adjuvant melanoma. I will, therefore, cover the design of these new Phase III studies in a moment. The economics of the revised agreement reflect BMS's continued commitment to the collaboration. At a high level, if you look at BMS's share of clinical costs for the new joint development plan associated with the seven studies, it is approximately $1.2 billion. There were also some enhancements to the economics for Nectar, which provide additional and accelerated near-term milestones. This includes a $25 million accelerated milestone payment that we received in Q1 of this year with the initiation of the MIBC study. It also includes a new $25 million milestone for Nektar at the start of the adjuvant melanoma study, which we expect will occur in Q3 of this year. In addition, the new agreement includes a $75 million accelerated milestone payment at the start of the first Phase III Registrational Non-Small Cell Lung Cancer Study with NIVA. The rest of the economics is unchanged.

I will let way cover the design of these new phase III studies in a moment.

The economics of the revised agreement reflect BMS is continued commitment to the collaboration at a high level. If you look at BMS is share of clinical costs for the new joint development plan associated with the seven studies it is approximately $1.2 billion.

There were also some enhancements to the economics for Nektar, which provide additional and accelerated near term milestone payments. This includes a 25 million dollar accelerated milestone payment that we received in Q1 of this year would the initiation of the I might be study. It also includes a new $25 million milestone for Nektar at the start of the argument.

Melanoma study, which we expect will occur in Q3 of this year.

In addition, the new agreement includes $75 million accelerated milestone payment at the started the first phase three registrational non small cell lung cancer study with Nivo.

The rest of the economics are unchanged BMS ones two third of the development cost Nektar contributes one third Nektar books global revenues. The profit split is 65% Nektar, 35% to BMS, we're also entitled to $650 million and total milestone payments upon the first approve.

Howard W. Robin: BMS funds two-thirds of the development cost, and Nektar contributes one-third. Nektar records global revenue.

Howard W. Robin: The profit split is 65% Nektar, 35% to BMS. We're also entitled to $650 million in total milestone payments upon the first approvals of BEMPEG in the US, Europe, and Japan, and then $260 million per each of the next three approved indications for BEMPEG. As many of you know, BMS is currently enrolling patients in our registrational trial in first-line metastatic melanoma, and all of the investigator sites are now up and running. Last year, we obtained an FDA breakthrough therapy designation for Bempleg plus Nevo in patients with metastatic melanoma based on positive data, including complete response rates from our PivotO2 study. The Phase 3 study enrolling in this setting has three endpoints, ORR, PFS, and OS. The current projected earliest timeline for reaching the follow-up time period needed for the number of patients required for the first interim ORR endpoint is the end of Q4 2020.

Sales have been pegging U.S., you're up in Japan, and then 260 million per each of the next three approved indications for Ben.

As many of you know BMS is currently enrolling patients in a registrational trial in first line metastatic melanoma and all the investigator sites are now up and running last year, we obtained FDA breakthrough therapy designation for Ben plague, plus nivo in patients with metastatic melanoma based on the positive data, including complete response.

Right from a pivotal to study.

The phase three study enrolling in this setting has three endpoints or PFS and awareness. The current projected earliest timeline for reaching the follow up time period needed on the number of patients required for the first interim or endpoint is the end of Q4 2020 this year.

Howard W. Robin: The PFS endpoint is projected to occur roughly six to seven months later, but as a reminder, this is event-driven, and the timing could change. For both ORR and PFS, the results will be analyzed by blinded independent radiology review, so also keep in mind that this process will affect the timing for the completion of any data. So the first data readout will most likely be Q1 of 21. As we get closer, we should be able to refine this timeline.

The PFS endpoint is projected to occur roughly six to seven months later, but as a reminder, this event driven and the timing could change.

For both or our and PFS. The results will be analyzed by blinded independent Radiology review. So also keep in mind that this process will affect timing for the completion of any data analysis. So the first data read out will most likely Billy Q1 of 21.

As we had closer we should be able to refine this timeline as a reminder, or is designed as an accelerated approval endpoint. We spent only a small amount of alfond. This and PFS is the full approval endpoint.

Howard W. Robin: As a reminder, ORR is designed as an accelerated approval endpoint. We spent only a small amount of alpha on this, and PFS is the full approval endpoint. With the breakthrough designation, the potential for the doublet in melanoma is quite promising, and as part of our amended agreement with BMS, our two companies are excited to expand our development efforts into adjuvant melanoma. This essentially doubles the number of patients that could potentially benefit from this double-litten melanoma and represents a significant opportunity for BEMP. Given BMS has the leadership position with nivolumab across all lines of therapy in melanoma, we're pleased that BEMPEG with nivolumab has the potential to further advance the standard of care in both early and advanced stage melanoma. In bladder cancer, we are enrolling a 200-patient study in first-line CIS-ineligible bladder cancer, which is intended to support a potential We expect the first potential data on the ORN point from this trial in Q2 or Q3 of this year.

With the breakthrough designation the potential for the doublet and melanoma is quite promising and as part of our amended agreement with BMS. Our two companies are excited to expand or development efforts into the argument melanoma setting. This essentially doubles the number of patients that could potentially benefit from this dublin melanoma and represents a significant opportunity for Ben.

Peg.

Given BMS has the leadership position with Nivolumab across all lines of therapy in melanoma. We're pleased that Mpeg with Nivolumab has the potential to further advance the standard of care and both early in advance stage melanoma.

In bladder cancer, we're enrolling a 200 patient study in first line sison eligible bladder cancer, which is intended to support at potential accelerated approval pathway. In this setting specifically in patients with PDL, one low expression as defined by a Cps score under 10.

We expect the first potential data on the or endpoint from this trial in Q2 or Q3 of 21 and to build on this opportunity in bladder cancer. We've also initiated a confirmatory phase three study in patients with sison eligible muscle invasive bladder cancer. This gives us the ability to capture the opportunity both early and late.

Howard W. Robin: And to build on this opportunity in bladder cancer, we've also initiated a confirmatory phase three study in patients with cis-ineligible muscle-invasive bladder cancer. This gives us the ability to capture the opportunity in both early and late stage bladder cancer, expanding the potential for BEMPEG and NEVO to help even more patients. In metastatic first-line renal cell carcinoma, BMS and Nektar have chosen a comprehensive approach that positions the doublet with a TKI-sparing and a TKI-inclusive regimen.

Stage bladder cancer, expanding the potential for Ben Pegging Nivo to help even more patients.

In metastatic first line renal cell carcinoma, BMS and Nektar have choosing a comprehensive approach.

Positions, the doublet with a T.K. I sparing and a teekay inclusive regimen.

Howard W. Robin: Our Phase III Registrational Study evaluating BEMPEG and NEVO versus a TKI and first-line RCC is now enrolling nicely, and we are on track to potentially have the first interim OS readout in the first quarter of 2022. The TKI-inclusive regimen development work will start mid-year under the new BMS agreement and is designed to support a registrational path forward in a first-line metastatic RCC study with this triple We will conduct a phase 1-2 dose escalation and expansion study to evaluate BEMPEG plus NEVO in combination with AXI and first-line RCC to establish the dose and administration schedule for future registration. Finally, BMS and Nektar agreed on a development path for the doublet and first-line non-small-cell lung cancer that we believe positions BEMPEG nicely for a flexible registrational path forward in non-small-cell lung BMS will run a dose optimization and expansion study to identify the appropriate dose regimen, and BMS is paying 100% of the cost of that program.

Our phase three Registrational study evaluating Ben Peg in Nivo versus a T.K. I in first line RCC is now enrolling nicely. We're on track to potentially have the first interim or west read out in the first quarter of 2022.

Teekay inclusive regimen development work will start mid year under the new BMS agreement and is designed to support a registrational path forward and a first line metastatic RCC study with this triplet.

We will conduct a phase one two dose escalation and expansion study to evaluate Mpeg plus nivo in combination with actually in first line RCC to establish the dose and administration schedule for future Registrational trial.

Finally, BMS Indictor agreed on the development path for the doublet in first line non small cell lung cancer that we believe positions Ben pick nicely for a flexible registrational path forward in non small cell lung cancer.

BMS will run a dose optimization and expansion study to identify the appropriate dose regimen and BMS is paying 100% of the cost of that program and we will continue our work evaluating pembro, we've been peg in non small cell lung cancer and our propel trial, which is currently enrolling patients. This gives us the flexibility in the.

True to evaluate moving forward with either Nivo were pembro in non small cell lung cancer.

Howard W. Robin: And we will continue our work evaluating PEMBRO with BEMPEG in non-small cell lung cancer in our PROPEL trial, which is currently enrolling patients. This gives us the flexibility in the future to move forward with either NEBO or PEMBRO in non-small cell lung cancer. We're pleased to have the renewed agreement in place and look forward to this phase of our collaboration.

We're pleased to have the renewed agreement in place and look forward to this phase of our collaboration the structure also removes certain exclusivity restrictions from the old agreement for a list of indications for Ben Peg and still provides us enhanced flexibility to pursue other combinations for Ben Peg.

Along those lines were exploring the potential Ben peg with other checkpoint inhibitors and other mechanisms and expanding this work is a Q over us this year.

Howard W. Robin: This structure also removes certain exclusivity restrictions from the old agreement for a list of indications for BEMPEG and so provides us with enhanced flexibility to pursue other combinations for BEMPEG. Along those lines, we're exploring the potential of BEMPEG with other checkpoint inhibitors and other mechanisms, and expanding this work is a key role for us. In collaboration with Pfizer, we have an ongoing Phase 1B2 study in head and neck cancer and castration-resistant prostate cancer. The study will evaluate Bempeg and Avelimab in head and neck cancer and also evaluate two triplic combinations, Bempeg plus Avelimab plus talazoparib and Bempeg and Avelimab and enzalutamide in prostate cancer.

In collaboration with Pfizer, we have an ongoing phase one be two study in head and neck cancer and castration resistant prostate cancer. This study will evaluate Ben pegging development in head and neck cancer and also evaluate two triplet combinations, then peg plus of Allomap, plus tell us operated and Ben Peg.

Well, the villain lab and Enzalutamide side in prostate cancer, we're very excited to work with Pfizer on this because of the opportunity in these two solid tumor settings for Ben Peg, particularly in patients with PDL one negative tumors.

We've also started a study in head and neck cancer in partnership with Baxter body. The study combines Ben Peg would there personalized vaccine approach and could pave the way for a novel treatment regimen with them peg in this tumor setting. In addition, we have plans to start a study with bio excel combining their molecule Mpeg and Pfizer's Avila Meb and.

Howard W. Robin: We're very excited to work with Pfizer on this because of the opportunity in these two solid tumor settings for BEMPEG, particularly in patients with PD-L1 negative tumors. We've also started a study in head and neck cancer in partnership with Vaxabody. The study combines BEMPEG with their personalized vaccine approach and could pave the way for a novel treatment regimen with BEMPEG in this tumor.

Pancreatic cancer.

As you can see the Ben Peg program is emerging as one of the largest registrational and development programs in immuno oncology and we're excited about the potential this novel agent to combined with checkpoints and other mechanisms.

Turning to our next immuno oncology candidate Nektar 262, our TLR seven eight agonist our phase one to reveal study is advancing and we recently reached achieved our recommended phase two dose of Nektar 262, we've been back.

Howard W. Robin: In addition, we have plans to start a study with BioXcel combining their molecule, Bempeg, and Pfizer's Avilumab in pancreatic cancer. As you can see, the BEMPEG program is emerging as one of the largest registrational and development programs in immuno-oncology, and we're excited about the potential of this novel agent to combine with checkpoints and other mechanisms. Turning to our next immuno-oncology candidate, Nektar-262, our TLR78 agonist, our Phase 1-2 reveal study is advancing, and we recently achieved our recommended Phase 2 dose of Nektar-262 with Bempeg. You'll recall that because this was a novel-novel combination, we had to evaluate staged dosing of Nektar-262 with Bempeg in dose escalation. We've observed high levels of TLR activation in the tumor microenvironment, and the dose escalation allows us to understand PK, and PD, and then characterize safety for Nektar 262.

Recall that because this was a novel novel combination we had to evaluate staged dosing of Nektar 262, with Ben Peg and dose escalation.

We've observed high levels of TLR activation in the tumor micro environment and the dose escalation allows us to understand PK PD and then characterize safety for Nektar 262.

Our current plan is to take the recommended phase two dose of Nektar 262 into a focused expansion in at least one tumor types, starting with 24 relapsed and refractory melanoma patients based upon the biology of the innate and adaptive immune system interaction. We will now we'll evaluate simultaneous dosing of the.

Well, our and Mpeg two explore the combinations potential in the Io relapsed refractory melanoma study.

Scientific community is beginning to recognize the importance of natural killer cell biology, and the treatment of cancer and as many of you know this area of research is generating much excitement. So let me now turn to our newest clinical candidate our I O 15 agonist program known as Nektar 255.

Howard W. Robin: Our current plan is to take the recommended phase 2 dose of Nektar 262 into a focused expansion in at least one tumor type, starting with 24 relapsed and refractory melanoma patients. Based upon the biology of the innate and adaptive immune system interaction, we will now evaluate simultaneous dosing of the TLR and BEMPEG to explore the combination's potential in IO relapsed and refractory melano The scientific community is beginning to recognize the importance of natural killer cell biology in the treatment of cancer, and as many of you know, this area of research is generating much excitement.

Nektar 255 is designed to capture the full biology of the Io 15 pathway to close both proliferation of NK cells and the expansion of CD eight memory cells.

Which provides us with a wide range of potential development pathways for Nektar two to 55.

Howard W. Robin: So let me now turn to our newest clinical candidate, our IL-15 agonist program known as Nektar 255. Nektar 255 is designed to capture the full biology of the IL-15 pathway to cause both proliferation of NK cells and the expansion of CD8 memory cells, which provides us with a wide range of potential development pathways for Nectar 250. Given the product profile, we are advancing forward on multiple fronts with this program, and Jay-Z will provide more details on the data emerging from this program, but let me provide a high-level overview of the progress on this promising mechanism. First, we're enrolling patients into our first in-human clinical trial of Nektar 255, which began last year. The study is evaluating Nektar 255 first as a monotherapy and then in combination with Dara or Rituximab in multiple myeloma and non-Hodgkin's lymphoma, respectively. In addition, we have two research collaborations ongoing with partners who are entirely funding the research.

Given the product profile, we're advancing towards forward on multiple fronts with this program and Jay Z will provide more details on the data emerging from this program, but let me provide a high level overview of the progress on this promising mechanism.

First we're enrolling patients into our first in human clinical trial of Nektar 255, which began last year. The studies evaluating Nektar 255 first as a monotherapy and then in combination with Dara or rituximab in multiple myeloma and non Hodgkin's lymphoma, respectively.

In addition, we have to research collaborations ongoing with partners who are entirely funding. The research first Janssen is conducting preclinical studies of Nektar 255 in combination with a number of their internal oncology mechanisms and separately and virology Gilliat is exploring the potential nektar 255 and.

On human Primate studies in combination with a number of anti roles in their portfolio. So no nektar 250 highs five has the potential to have many applications and oncology as well as potentially virology, we look forward to its progress.

Moving on to next 358, our T regs stimulus Tory program, which is partnered with Lilly.

Howard W. Robin: First, Janssen is conducting preclinical studies of Nektar-255 in combination with a number of their internal oncology mechanisms. And separately, in virology, Gilead is exploring the potential of Nektar-255 in non-human primate studies in combination with a number of antivirals in their portfolio. So Nektar-255 has the potential to have many applications in oncology as well as potentially in virology, and we look forward to its progress. Moving on to Nectar 358, our Treg Stimulatory Program, which is partnered with Lilly. We reported significant progress with this program in 2019. Last year, the first human data in healthy volunteers were reported at ULAR, and these data demonstrated the candidate's dose-dependent and selective proliferation of Tregs. We recently completed the Phase 1b Multiple Ascending Dose Study in lupus patients, and we have submitted these data to be presented at this year's ULAR meeting.

We reported significant progress with this program in 2019 last year first in human data in healthy volunteers were reported at you lore and these data demonstrated the candidates dose dependent and selected proliferation of T. Reg cells. We recently completed the phase one be multiple ascending dose study.

In lupus patients we have submitted these data TP presented at this years you are meeting our partner Lilly also recently initiated phase one be studies in two new autoimmune indications of psoriasis atopic dermatitis and these studies are ongoing and enrolling patients. Our partner Lily also has plans to start a phase two dose.

Most ranging study in lupus the middle of this year and they plant at another phase two auto immune indication to the development program. This year.

So we're very pleased with their commitment and abroad nature of this development program, which reflects the potential of this novel mechanism to treat auto immune diseases.

With that I'd like to turn the call over to wait to review the phase three study designs for been back way.

Thank you Howard I like to discuss briefly the comprehensive plan with evolve with our partner BMS for the doublet Abend Peg plus nivolumab in the melanoma study.

Howard W. Robin: Our partner Lilly also recently initiated Phase 1B studies in two new autoimmune indications of psoriasis and ectopic dermatitis, and these studies are ongoing and enrolling patients. Lilly also plans to start a Phase II dose-ranging study in lupus in the middle of this year, and they plan to add another Phase II autoimmune indication to the development program this year. So we're very pleased with their commitment and the broad nature of this development program, which reflects the potential of this novel mechanism to treat autoimmune diseases. And with that, I'd like to turn the call over to Wei to discuss the Phase 3 study designs for BEMPEC.

An area, where the IMO two pathway has already been validated as Howard stated we have generated.

Breakthrough designation worthy data in first line metastatic melanoma or pivotal to study up and pack place Nivo.

At a median follow up of approximately 18 month, 34% of patients had a complete response as determined by blinded independent Central review.

42% had a 100% reduction target lesions and 47% almost half had a greater than 75% reduction in target lesions.

The significance of deep responses in metastatic melanoma and to association with survival have recently been demonstrated by the F.D.A. in men analysis. They presented at ASCO 29 team.

Wei Lin: Thank you, Howard. I'd like to discuss briefly the comprehensive plan we've developed with our partner BMS for the doublet of Benpeg plus nivolumab in the melanoma setting, an area where the IL-2 pathway has already been validated. As Howard stated, we have generated breakthrough designation-worthy data in first-line metastatic melanoma from a PivotO2 study of MPEG plus Nevo. At a median follow-up of approximately 18 months, 34% of patients had a complete response as determined by blinded independent central review, 42% had a 100% reduction in target lesions, and 47%, almost half, had a greater than 75% reduction in target les The significance of deep responses in metastatic melanoma and its association with survival has recently been demonstrated by the FDA in a meta-analysis they presented at ASCO 2019. Based on this analysis, patients who achieved a 75% or greater tumor shrinkage in their recessed TART lesions, including patients that achieved a complete response, had a very high likelihood of having the greatest improvement in progression-free survival and overall survival, especially if they were treated with immuno

Based on this analysis patients, who achieved a 75% or greater tumor shrinkage in their resist target lesions.

Including patients that achieved a complete response.

Very high likelihood of having the greatest improvement in progression free survival and overall survival, especially if they were treated with immunotherapy.

So definitely response is very highly correlated with survival in melanoma with Io agents.

With that context, our data from the pivotal to study showing that nearly one half of the melanoma patients had a 75% will create a response.

Reinforces our confidence in the doublet in melanoma.

And indeed as we presented in November at Citi 29 team with approximately 18 month, a follow up median PFS had not been reached we plan to share updated data from this cohort at a future meeting in the second half of this year.

Our confidence in the potential clinical benefit and type plus Nivo may offer in melanoma has let us and Dms to initiate a study in accident setting. This study will evaluate extended treatment a post surgical patients within tech placebo.

In endpoint of event free survival attribute duration will be 12 month, we estimate that this study will enroll between 901000 patients.

Wei Lin: So definitely, response is very highly correlated with survival in melanoma with IOH. With that in mind, our data from the PIV02 study showing that nearly one-half of the melanoma patients had a 75% or greater response reinforces our confidence in the doublet in melanoma. And indeed, as we presented in November at CITSE 2019, with approximately 18 months of follow-up, median PFS had not been reached

And we'll compared to double it a band pack plus Nivo two single agent Ebola map.

We are finalizing the protocol with BMS and expect to start this trial in the second half of this year.

Due to the long duration attachment melanoma studies, we expect a potential first we out.

2024.

With the ongoing phase three metastatic melanoma study and the new Ashwin studied.

Wei Lin: We plan to share updated data from this cohort at a future meeting in the second half of this year. Our confidence in the potential clinical benefit that BEMPEC plus NEVO may offer in melanoma has led us and BMS to initiate a study in the adjuvant setting. This study will evaluate the extended treatment of post-surgical patients with BEMPEC plus NEVO with an endpoint of event-free survival; treatment duration will be 12 months. We estimate that the study will enroll between 900 and 1,000 patients, and we'll compare the doublet of MPEG plus Nivo to single-agent Nivolumab. We are finalizing the protocol with BMS and expect to start this trial in the second half of this year. Due to the long duration of adjuvant melanoma studies, we expect a potential first readout in 2024.

And that's an actor now have a comprehensive approach to expanding the transformative potential.

I'll be bamtech Nivo doublet, two more patients with melanoma.

In addition, as Howard stated in January BMS started at the new phase three bladder cancer study, which is enrolling patients with muscle invasive disease in the Perry Atkins setting.

Our ongoing metastatic study in Urothelial carcinoma is in the says platen ineligible patients and this new phase three study extends our doublet into earlier disease for essentially the same patient population.

In addition.

The trial will also serve us the confirmatory study for a potential accelerated approval filing planned with our ongoing metastatic trial.

In the muscle invasive study, we will stratify patients by stage and PDL one status.

Wei Lin: With the ongoing phase 3 metastatic melanoma study and the new adjuvant study, BMS and Nektar now have a comprehensive approach to expanding the transformative potential of the Banpeg Nevo doublet to more patients with melanoma. In addition, as Howard stated, in January, BMS started a new Phase III bladder cancer study, which is enrolling patients with muscle-invasive disease in the periatom setting. Our ongoing metastatic study in urothelial carcinoma is in cisplatin-ineligible patients, and this new Phase III study extends our doublet into earlier disease for essentially the same patient population. In addition, the trial will also serve as the confirmatory study for a potential accelerated approval filing planned with our ongoing metastatic trial. In the muscle reinvasive study, we will stratify patients by stage and PD-L1 status.

During the Neoadjuvant pre surgical phase 540 patients will be randomized one to three arms receive treatment with either NPAC, plus nivo or nivo or no treatment at all which is the current standard of care.

And after suspected Mi they will continue along the same pre surgical treatment regimen for a 12 month period.

The primary endpoint will be Pathlogic complete response and event free survival.

Again this is a longer study and our first potential readout is expected to be in 2024.

With that I'll hand, the call to JC to discuss more on our Nexstar to five five program.

Thanks Bye.

I'd like to spend a little more time discussing the aisle 15 program Nektar 255 as it is the next large cytokine program in our pipeline that is generating significant interest.

Wei Lin: During the neoadjuvant pre-surgical phase, 540 patients will be randomized into three arms to receive treatment with either BenPeg plus Nevo or Nevo or no treatment at all, which is the current standard of care. Then, after cystectomy, they will continue on the same pre-surgical treatment regimen for a 12-month period. The primary endpoint will be pathologic complete response and event-free survival. Again, this is a longer study, and our first potential readout is expected to be in 2024. With that, I'll hand the call to Jay-Z to discuss more on our Nektar 255 program.

Nektar 255 was designed to capture the full biology of the aisle 15 pathway, specifically, meaning that Nektar 255 is designed to capture all the receptor ligand interactions available through targeting the aisle 15, I mean as pathway.

As a consequence nektar two by five functions as a significant expander of natural killer cells and an agent that promotes the survival and expansion of memory CDH T cells.

The clinical and research community is increasingly recognizing the importance of NK cells and memory cells in the Io Cascade.

Now as I just stated a key differentiating factor for Nektar 255 is that we have engineered it to bind to all forms of the aisle 15 receptor versus other muting proteins in development that only buying into beta gamma receptors.

Wei Lin: Thanks, Wave. I'd like to spend a little more time discussing the IL-15 program, Nektar 255, as it is the next large cytokine program in our pipeline that is generating significant interest. Nektar 255 was designed to capture the full biology of the IL-15 pathway, specifically meaning that Nektar 255 is designed to capture all the receptor-ligand interactions available through targeting the IL-15 Igneous pathway. As a consequence, Nektar 255 functions as a significant expander of natural killer cells and an agent that promotes the survival and expansion of memory CD8 T-cells. The clinical and research community is increasingly recognizing the importance of NK cells and memory cells in the IO cascade. Now, as I just stated, a key differentiating factor for Nektar 255 is that we have engineered it to bind to all forms of the IL-15 receptor versus other mutine proteins in development that only bind to beta-gamma receptors. We believe that this will translate to enhanced efficacy.

We believe that this will translate to enhanced efficacy.

For example, we know that in order to support NK cell mediated cellular killing you need to induce intra cellular Grands IB.

And data presented it since he 2019 showed that we get Maxsimil Grands I'd be production versus other mutations and even more the native iOS 15.

Additional preclinical data we generated to date highlights the various combination opportunities for this candidate first we see an opportunity to combined with antibodies such as Dara tumor mabin rituximab that work through an antibody dependent cellular cytotoxicity or ADCC mechanism of action.

In the ADCC reaction antibodies bind to the target cell surface by the antigen recognition portion of the antibody. This coating of a cell with antigen recognizing antibodies is an immune process called optimization.

Jonathan Zalevsky: For example, we know that in order to support NK cell-mediated cellular killing, you need to induce intracellular granzyme B. And data presented at CIDSE 2019 showed that we get maximal granzyme B production versus other mutines and even more than native IL-15. Additional preclinical data we have generated to date highlights the various combination opportunities for this candidate. First, we see an opportunity to combine it with antibodies, such as daratumumab and rituximab, that work through an antibody-dependent cellular cytotoxicity, or ADCC, mechanism of action. In the ADCC reaction, antibodies bind to the target cell surface via the antigen recognition portion of the antibody. This coating of a cell with antigen-recognizing antibodies is an immune process called opsonization.

These ops and I cells are then recognized by NK cells by the FC Gamma receptors on the NK cells binding to the F.C. region of antibodies on ops and I sells.

The clustering of FC Gamma receptors promotes de granulation of the NK cells, leading killing of the ops Tonight cells.

In this way the targeted antibody is able to selectively in specifically kill ops, a nice cells via the action of NK effector cells.

However, one of the limitations of the ADCC reaction is that NK cells. The effector cell that actually promotes the killing of ops, a nice cells are consumed and themselves depleted in ADCC reaction, consequently, limiting efficacy of the targeted antibody.

If we are able to enhance the proliferation and function of NK cells by Nektar, two by five and combine that with ADCC antibodies, we could see a very profound effect.

Jonathan Zalevsky: These opsonized cells are then recognized by NK cells via the FC gamma receptors on the NK cells, binding to the FC region of antibodies on opsonized cells. The clustering of FC-gamma receptors on the NK cells promotes degranulation of the NK cells, leading to the killing of the opsonized cells. In this way, the targeted antibody is able to selectively and specifically kill opsonized cells via the action of NK effector cells. However, one of the limitations of the ADCC reaction is that NK cells, the effector cell that actually promotes the killing of opsonized cells, are consumed and themselves depleted in the ADCC reaction.

Nonclinical studies, Nektar 255 exhibited antitumor activity and substantially enhanced in vivo proliferation and activation of NK cells to provide sustained cytotoxic function.

In the preclinical lymphoma model or single agent Daratumumab was in effective Nektar 255 treatment in combination with Daratumumab increased NK cell numbers in activity in bone marrow tissue and enhanced ADCC mediated tumor cell clearance in the bone marrow compartment.

Now this is a very important result, because it confirmed that Nektar 255 was able to mobilize functional NK cells in the bone marrow compartment, indicating that with Nektar 255, we can generate not only systemic but also tissue dependent effects.

Jonathan Zalevsky: Consequently, limiting the efficacy of the targeted antibody. If we are able to enhance the proliferation and function of NK cells with Nektar 255 and combine that with ADCC antibodies, we can see a very profound effect. In preclinical studies, Nektar 255 exhibited anti-tumor activity and substantially enhanced in vivo proliferation and activation of NK cells to provide sustained cytotoxic function. In a preclinical lymphoma model, where single-agent daratumumab was ineffective, Nektar 255 treatment in combination with daratumumab increased NK cell numbers and activity in bone marrow tissue and enhanced AD This is a very important result because it confirmed that Nektar 255 was able to mobilize functional NK cells in the bone marrow compartment, indicating that with Nektar 255, we can generate not only systemic but also tissue-dependent effects.

More recently at Ash, we showed that Nektar 255, enhance the number and function of both NK and CD eight affect your memory T cell populations in the peripheral blood from healthy donors and from patients with multiple myeloma.

Nektar two by five was also able to revert the inhibitory status of NK cells for multiple myeloma patients and showed synergy, but there are two of them Abbott elotuzumab to significantly increase the status of NK susceptibility of the multiple myeloma cells in a dose dependent manner.

Collectively these data provided strong rationale for our first clinical study, which is now underway.

The study is evaluating the safety and dose schedule of Nektar 255, as a monotherapy and then we'll expand into combination with antibodies that work through and ADCC mechanism, including Daratumumab in buttocks amount.

Jonathan Zalevsky: More recently, at ASH, we showed that Nektar 255 enhanced the number and function of both NK and CD8 effector memory T cell populations in the peripheral blood from healthy donors and from patients with multiple myeloma. Nektar 2x5 was also able to revert the inhibitory status of NK cells in multiple myeloma patients and showed synergy with daratumumab and elotuzumab to significantly increase the status of NK susceptibility of multiple myeloma cells in a dose-dependent manner. Collectively, these data provide a strong rationale for our first clinical study, which is now underway. The study is evaluating the safety and dose schedule of Nektar-255 as monotherapy and then will expand to combinations with antibodies that work through an ADCC mechanism, including daratumumab and rituximab. We plan to enroll patients with relapsed or refractory multiple myeloma and non-Hodgkin's lymphoma in this study.

We plan to enroll patients with relapsed or refractory multiple myeloma and non Hodgkin's lymphoma in this study.

The study will also evaluate pharmacokinetic and pharmacodynamic effect as well as anti tumor activity.

We have also introduced a robust biomarker program into this trial to provide a deep assessment of the Nektar 255 mechanism of action.

Besides NK cells, we will also evaluate total and sub populations of CD for in CD eight memory T cells to study the effective nektar 255 on their expansion activation and survival.

This biomarker rich early clinical development approach allows us to follow the science in the development and planning for Nektar 255.

Our goal is to achieve initial results from the first monotherapy phase of this phase one trial this year.

In addition, our partners Janssen and Gilliat may present data from their respective preclinical efforts with Nektar 255 as well.

Now we also see potential for Nektar 255 in combination with Carty and other cell therapies.

Jonathan Zalevsky: The study will also evaluate pharmacokinetic and pharmacodynamic effects, as well as antitumor activity. We have also introduced a robust biomarker program into this trial to provide a deep assessment of Nektar 255's mechanism of action. Besides NK cells, we will also evaluate total and subpopulations of CD4 and CD8 memory T cells to study the effect of Nektar 255 on their expansion, activation, and survival. This biomarker-rich early clinical development approach allows us to follow the science in the Development and Planning for Nektar 255. Our goal is to achieve initial results from the first monotherapy phase of this Phase 1 trial this year. In addition, our partners Janssen and Gilead may present data from their respective preclinical efforts with Nektar 255 as well.

Car T is very effective but only for a relatively short period of time.

By adding I'll 15, and promoting proliferation of memory T cells, we may be able to get a much more durable duration of response associated with car T therapy.

Our collaboration with Fred Hutchinson has yielded some impressive early data also presented at ash.

Specifically researchers demonstrated nektar 255 prevented tumor growth and increased survival of car T cells when added to a cdnineteen targeted car T cell regimen in models of B cell lymphoma.

With that update let me turn the call over to Gil for a review of the financials.

Thank you Jay Z and good afternoon, everyone.

This afternoon, we announced our full year financial results for 2019 in our earnings press release.

Jonathan Zalevsky: Now we also see potential for Nektar 255 in combination with CAR-T and other cell therapies. CAR-T is very effective, but only for a relatively short period of time. By adding IL-15 and promoting the proliferation of memory T-cells, we may be able to get a much more durable duration of response associated with CAR-T therapy. Our collaboration with Fred Hutchinson has yielded some impressive early data, also presented at IAC. Specifically, researchers demonstrated Nektar 255 prevented tumor growth and increased survival of CAR T-cells when added to a CD19-targeted CAR T-cell regimen in models of B-cell lymphoma.

On this call I'll provide or annual financial guidance for 2020.

Starting with our cash position, we exited 2019 with 1.6 billion of cash and investments.

With our exceptionally strong cash position.

We have decided to repay the 250 million of outstanding senior secured notes on our balance sheet.

This will strengthen our balance sheet and improve our annual cash flow as it will result in approximately 20 million of annual interest savings on a go forward basis.

With respect to cash you should for R&D and operations, we expect to use approximately 350 million in net cash and Twentytwenty.

Jonathan Zalevsky: With that update, let me turn the call over to Gil for a review of the financial...

Gil: Thank you, Jay-Z, and good afternoon, everyone. This afternoon, we announced our full-year financial results for 2019 in our earnings press release. On this call, I will provide our annual financial guidance for 2020. Starting with our cash position, we exited 2019 with $1.6 billion of cash and investments. With our exceptionally strong cash position, we have decided to repay the $250 million of outstanding senior secured notes on our balance sheet.

This compares to net cash uses of 315 million in 2019.

This increase in investment 2020 is primarily a result of our plans to complete enrollment in the first line Registrational studies in melanoma bladder.

Renal cell carcinoma.

As well as begin the two new phase three studies, we are initiating this year for the expanded been paid development program under our BMS collaboration.

After taking account of our plan to repay the 250 million of debt in Q2, we expect and 2020 with approximately 1 billion in cash and investments.

Gil: This will strengthen our balance sheet and improve our annual cash flow as it will result in approximately $20 million of annual interest savings on a go-forward basis. With respect to cash usage for R&D and operations, we expect to use approximately $350 million in net cash in 2020. This compares to net cash usage of $315 million in 2019.

Now turning to revenue our GAAP revenue is expected to be between 140 and 145 million this year.

GAAP revenue includes 50 million of new and accelerated milestone payments from BMS.

Gil: This increase in investment in 2020 is primarily a result of our plans to complete enrollment in the first-line registrational studies in melanoma, bladder, and renal cell carcinoma, as well as begin the two new phase three studies we are initiating this year for the expanded BEMPEG development program under our BMS collaboration. After taking account of our plan to repay the $250 million in debt in Q2, we expect to end 2020 with approximately $1 billion in cash and investments. Now turning to revenue, our gap revenue is expected to be between $140 and $145 million this year. Gap revenue includes $50 million of new and accelerated milestone payments from BMS under our expanded agreement. The first 25 million of these milestones will be recognized in Q1 for the start of the MIBC study, which occurred in January of this year.

Under our expanded agreement.

The first 25 million of these milestones will be recognized in Q1 for the start of the M. Ibcs study, which occurred in January of this year.

And the second 25 million milestone will be in connection with the start of the ALJ melanoma study, which is currently planned for Q3.

Excluding these milestones.

We expect the remaining 90 to 95 million of GAAP revenue to be fairly ratable over the four quarters of 2020 comprised of the following.

40 to 42 million in cash royalties.

34 to 36 million noncash royalty revenue.

11 to 12 million a product sales.

And an additional 5 million and other license collaboration revenue outside of the a mass.

We anticipate 2020, GAAP R&D expense will range between 475 and 500 million.

Which includes approximately 70 million of noncash depreciation and stock compensation expense.

Gil: And the second $25 million milestone will be in connection with the start of the adjuvant melanoma study, which is currently planned for Q3. Excluding these milestones, we expect the remaining $90 to $95 million of gap revenue to be fairly rateable over the four quarters of 2020, comprised of the following. 40 to 42 million in cash royalties and 34 to 36 million in non-cash royalty revenue. 11 to 12 million in product sales, and an additional $5 million in other licensed collaboration revenue outside of BMS. We anticipate 2020 GAAP R&D expense will range between $475 and $500 million, which includes approximately $70 million of non-cash depreciation and stock compensation expense. We expect R&D expense to be fairly rateable over the four quarters of this year.

We expect R&D expense to be fairly ratable over the four quarters of this year.

In addition to the R&D investment in the new trials in the expanded BMS collaboration I would like to highlight a few other key areas of focus for us in 2020.

In order to meet our planned timeline for B L. A filing and potential commercial launch of them Peg and 2021.

We plan to complete validation of our large scale commercial manufacturing process and begin manufacture of commercial supplies. This year.

As a result, Mpeg manufacturing costs will continue to be a significant component of our R&D expense in 2020.

Under our BMS collaboration BMS shares, 35% them take manufacturing costs.

In addition.

We will continue to invest in development of them take outside of the BMS collaboration, including our propel study with Pembrolizumab in non small cell lung cancer.

Gil: In addition to the R&D investment in the new trials and the expanded BMS collaboration, I would like to highlight a few other key areas of focus for us in 2020. In order to meet our planned timeline for BLA filing and potential commercial launch of BEMPEG in 2021, we plan to complete validation of our large-scale commercial manufacturing process and begin manufacture of commercial supplies this year. As a result, BEMPEG manufacturing costs will continue to be a significant component of our R&D expense in 2020. Under our BMS collaboration, BMS shares 35% of BEMPEG manufacturing costs. In addition,

And in combination with other modalities under our collaboration with Pfizer.

Bio XL Andexxa body.

Our R&D expense also includes the initiation of two phase two studies for next year 358, and the ongoing phase one studies in atopic dermatitis and psoriasis.

As Howard stated the first two phase two study in lupus is planned to begin mid year and the second phase two study in a new auto immune disease state will start in the second half of 2020.

As a reminder, in our collaboration with Lilly, we are responsible for 25% of these costs.

In addition, we will continue to invest in our phase one to work.

Gil: We will continue to invest in the development of BEMPEG outside of the BMS collaboration, including our PROPEL study with pembrolizumab in non-small cell lung cancer and in combination with other modalities under our collaborations with Pfizer, BioXcel, and Vaxabadi. Our R&D expenses also include the initiation of two Phase 2 studies for Nectar 358 and the ongoing Phase 1b studies in atopic As Howard stated, the first phase two study in lupus is planned to begin mid-year, and the second phase two study in a new autoimmune disease state will start in the second half of 2020.

For Nektar 255, and Nektar two six too.

[noise] DNA expense for 2020 is projected to be between 105 and 115 million.

Which includes approximately 45 million of noncash depreciation and stock compensation expense.

For 2020, GAAP interest income will be approximately 30 to 33 million.

With repayment of our senior notes.

We expect 2020 full year interest expense of seven to 8 million as compared to 21.3 million in 2019.

We also expect to recognize between 26 and 28 million in noncash interest expense related to the legacy Sims immersed Sarah royalty monetization.

Gil: As a reminder, in our collaboration with Lilly, we are responsible for 25% of these costs. In addition, we will continue to invest in our Phase 1-2 work for Nektar 255 and Nektar 262. G&A expense for 2020 is projected to be between $105 and $115 million, which includes approximately $45 million of non-cash depreciation and stock compensation expense. For 2020, GAAP interest income will be approximately $30 to $33 million, with repayment of our senior notes. We expect 2020 full-year interest expense of $7-8 million as compared to $21.3 million in 2019. We also expect to recognize between $26 million and $28 million in non-cash interest expense related to the legacy Symsia and Mercera royalty monetization. In Q1 of this year, we plan to record an impairment charge on our income statement of between $45 and $50 million related to the discontinuation of the Nektar 181 program.

In Q1 of this year.

We plan to record an impairment charge on our income statement.

Between 45, and 50 million related to the discontinuation of the Nektar 181 program.

This impairment charge is composed of two parts.

Noncash charges of approximately 20 million in cash payments of 25 to 30 million primarily related to certain non cancellable contract manufacturing commitments.

As I stated earlier, we plan to end 2020, with approximately 1 billion in cash and investments after repayment of our 250 million and senior secured notes.

And with that we will open the call for questions operator.

Thank you.

Ladies and gentlemen, if you have a question at this time. Please press the star followed by the number one on your Touchtone telephone. If your question has been answered.

Move yourself from the Q. Please press the pound.

Gil: This impairment charge is composed of two parts: non-cash charges of approximately $20 million and cash payments of $25 to $30 million primarily related to certain non-cancellable contract manufacturing commitments. As I stated earlier, we plan to end 2020 with approximately $1 billion in cash and investments after repayment of our $250 million in senior secured notes. And with that, we will open the call for questions. Operator.

Once again to ask a question. Please press Star then one.

And our first question comes from Chris Shabby, Tony from Cowen Your line is open.

Thank you good afternoon.

With that then peg programs in long.

You give us a sense for how enrollment is progressing both with the program with Opdivo as well as with Pembro I think historically there have been some bumps in the road can you talk about what initiatives you have put in place that may be helping to engender confidence in your timeline.

Hi, This is Scott whaling.

I'll I'll take that question so regarding the our Ben had combination in long as has been state in the call.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, please press the star followed by the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound. Once again, to ask a question, please press star and then 1. And our first question comes from Chris Shibutani from Cowan. Your line is open. Thank you. Good afternoon,

Our strategy really two prong in combination with Pembrolizumab as follows combination with new mowlam that first of all the combination Pemba list not that's being operationalized bye bye Nexstar and we expect so that study has starting weldment and we expect by the end of the year to have 10 to 20 patients worth of data to has.

Chris Shibutani: With the BEMPEG programs in lungs, can you give us a sense for how enrollment is progressing, both with the program with Opdivo, as well as with Pembroke? I think historically, there have been some bumps in the road. Can you talk about what initiatives you have put in place that may be helping to engender confidence in your timelines?

A sufficient follow up at least two scans to allow us for an assessment of activity.

The combination with Nivolumab, that's been operationalized fully by BMS and that study has not open yet and then I will provide more details as the year goes along.

Wei Lin: Hi, this is Wei-Lin. I'll take that question.

Great and then with 255, which seem to be an asset that JC highlighted here can you give us a sense maybe frame what kind of.

Wei Lin: So, regarding our BEMPEC combination in lung, as stated in the call, our strategy is really two-pronged, in combination with pembrolizumab as well as in combination with nemolimab. First of all, the combination of pembrolizumab that's being operationalized by Nektar, and we expect, so that study has started enrollment, and we expect, by the end of the year, to have 10 to 20 patients with data that has a sufficient follow-up, at least two scans, to allow us for an assessment of activity. The combination with nivolumab, that's being operationalized fully by BMS, and that study has not opened yet, and then we'll provide more details as the year goes along.

Because he results we may see in the monotherapy setting for those two indications that we that are likely to see data that myeloma et cetera. Thanks.

Sure Hey, Chris This is Jay Z I'm. So you know will be exploring patients that have pretty late stage disease. Because remember this is a first in human study so were dose escalating in a typical way with small numbers of patients at any given dose level and we're treating patients with very advanced late Lyme disease kind of.

Like in the salvage regimen.

So we'll be monitoring all of the possible outcomes that you can get in the study of this kind in the first in human setting.

Chris Shibutani: Great. And then with 255, which seemed to be an asset that Jay-Z highlighted here, can you give us a sense, maybe frame, what kind of efficacy results we may see in the monotherapy setting for those two indications that we are likely to see data for, the myeloma, et cetera? Thanks.

In addition to any responses that we may see in these liquid tumor settings, Chris will also be deeply diving into the mechanism of action.

I'll 15 pathway agonism, so we'll be looking for cellular changes systemically will also be looking you know in the tissue for example, like in the bone marrow compartment, where we expect there to be additional cellular changes induced by this mechanism of action.

Jonathan Zalevsky: Sure. Hey Chris. This is Jay Z.

Jonathan Zalevsky: So, you know, we'll be exploring patients that have pretty late-stage disease because, remember, this is a first-in-human study. So we're dose escalating in a typical way with small numbers of patients at any given dose level. And we're treating patients with very advanced late-line disease, kind of like in a salvage regimen. So we'll be monitoring all of the possible outcomes that you can get in a study of this kind in a first-in-human setting. In addition to any responses that we may see in these liquid tumor settings, Chris will also be deeply diving into the mechanism of action of IL-15 pathway agonism. So we'll be looking for cellular changes systemically. We'll also be looking, you know, in the tissue. For example, in the bone marrow compartment, where we expect there to be additional cellular changes induced by this mechanism of action.

So we'll be looking to present the totality of the results as we can this year.

And remind me in what forum or setting that data may come at a medical meeting or will you be topline.

The ash.

Yeah, It would most likely be at a medical meeting that's correct.

So.

That's a good example, there a couple of others that you could think of where liquid tumors or the focus.

Sounds good we'll look forward to that date onto five five program. Thank you.

Our next question comes from Alexander Dunkin' from Piper Sandler Your line is open.

Hi, Thanks for the questions for the two Fivefive program have you had discussions to evaluate to size size in bladder cancer as a double or triple given some positive I also seem to brag enough data, there recently and you're doubling down in bladder with them pay and then maybe more broadly as.

Jonathan Zalevsky: So we'll be looking to present the totality of the results as best we can this year.

For what gives you the most confident that that various compounds will be the ideal cytokine.

Chris Shibutani: And remind me in what forum or setting that data may come up at a medical meeting, or will you be top-lining? The B. Ash.

Next to combine with moving forward as we see more and more competitors entering this space.

Jonathan Zalevsky: Yeah, it would most likely be at a medical meeting. That's correct.

Yeah. So so there are two questions there, let's start with the first one so in this setting a nektar 255, we we'd like you stated we appreciate the this is a very broad mechanism and its shares a lot of features that are non overlapping with and aisle to kind of pathway engagement.

Chris Shibutani: Sounds good. We'll look forward to that.

Chris Shibutani: Sounds good; we'll look forward to that data on the 255 program. Thank you. Thank you. Our next question comes from Alexander Duncan from Piper Sandler. Your line is open.

Alexander Duncan: Alright, thanks for the questions. For the 2-5-5 program, have you had discussions to evaluate 2-5-5 in bladder cancer as a doublet or triple, given some positive IL-15 superagonist data there recently, and you're doubling down on bladder with BEMPEG? And then, maybe more broadly as a platform, what gives you the most confidence that Nektar's compounds will be the ideal cytokine memetics to combine with moving forward as we see more and more competitors entering the cytokine space? Thanks.

And you can apply that aisle 15 pathway agonism broadly not only in liquid tumors, which is the first in human study, but also into the solid tumor settings and there are a number of tumors that are characterized with NK cell infiltrates and bladder cancer is one of those or others that share. Some features of the G. you too.

Her kinds of settings as well.

So there are definitely very very broad application opportunities and it doesn't even just stop with 255 because it also goes with the combination partners that are selected for example, when you consider targeted therapy as the combination partner you know that you have an incredibly wide range of targeted therapies across many many tumor types.

Jonathan Zalevsky: Yeah, so there are two questions there. Let's start with the first one.

Jonathan Zalevsky: So, in the setting of Nektar 255, we, like you stated, appreciate that this is a very broad mechanism, and it shares a lot of features that are non-overlapping with an IL-2 kind of pathway engagement. And you can apply that IL-15 pathway agonism broadly, not only in liquid tumors, which is the first human study, but also in solid tumor settings. And there are a number of tumors that are characterized by NK cell infiltrates, and bladder cancer is one of those. There are others that share some features of the GU tumor kinds of settings as well.

Including large large indications ranging from things like breast cancer with agents like herceptin to all other rituximab b cell NHL kinds of opportunities. So yeah, we'll be looking for a very broad set of development opportunities for 255.

And on the second question about the cytokine that Nektar works on I mean think that we've sort of had the chance to really revitalize it inject a whole new momentum into the cytokine field with the results that we were able to deliver with Empaque and obviously, we've been building off of that in the sense, though we had been advancing the Ben.

Jonathan Zalevsky: So there are definitely very, very broad application opportunities. And it doesn't even just stop with 2-5-5, because it also goes with the combination partners that are selected. For example, when you consider targeted therapy as the combination partner, you know that you have an incredibly wide range of targeted therapies across many, many tumor types, including large, large indications ranging from things like breast cancer with agents like Herceptin to all the Rituximab, B-cell, NHL kinds of opportunities. So yeah, we'll be looking for a very broad set of development opportunities for 2-5-5. And on the second question about the cytokines that Nektar works on, I mean, I think that we've sort of had the chance to really revitalize and inject a whole new momentum into the cytokine field with the results that we were able to deliver with BEMPA.

Program, very aggressively and very very quickly into multiple registrational settings.

Kind of set a bar in a hurdle.

For other companies that are following behind us.

We obviously have a deep belief in our approach to targeting cytokine and our molecules have differentiating properties that we built into them with our polymer chemistry conjugation platform.

And those other companies that are behind us they have to chase us in that regard.

Okay.

Thank you.

Thank you.

Our next question comes from Jessica Fye from JP Morgan Your line is open.

Hey, guys. Good evening, Thanks for taking my question.

Can you talk about whether you might pursue the potential to shift the interim and the first line is three melanoma trial to one based on complete response rate.

Jonathan Zalevsky: And obviously, we've been building on that in the sense that we've been advancing the BEMPEG program very aggressively and very, very quickly into multiple registrational settings. We've kind of set a bar and a hurdle for other companies that are following behind us. We obviously have a deep belief in our approach to targeting cytokines, and our molecules have differentiating properties that we've built into them with our polymer chemistry conjugation platform. And those other companies that are behind us, they have to chase us in that regard.

Well the decision to change it be based on feedback from the FDA that success on.

Our could serve as a basis for accelerated approval and if so have they given you any feedback on that front.

Hi.

Hi, This is way then.

We certainly on to a large extent the breakthrough designation we obtained in person melanoma was largely storage extent based on the Pathlogic base on the complete response that that was seen in our pivotal to cohort and that he was very encouraging in using that endpoint in assessing the quality in totality yard.

Jonathan Zalevsky: Our next question comes from Jessica Fye from J.P. Morgan. Your line is open. Hey, guys. Good evening.

Jessica Macomber Fye: Thanks for taking my question. Can you talk about whether you might pursue the potential to shift the interim in the first-line Phase III melanoma trial to one based on a complete response rate? Would the decision to change it be based on feedback from the FDA that success on CR could serve as a basis for accelerated approval? And if so, have they given you any feedback on that front?

Got it now we do have ongoing discussion with agencies multiple agencies worldwide regarding that that endpoint as the first hand pointed to take a look hat and and and that's out that's something that will will provide further update as we complete those regulatory discussions so right now the.

Wei Lin: Hi, this is Wei Lin.

Wei Lin: Yeah, we certainly, to a large extent, the breakthrough definition we obtained in first-line melanoma was large to a large extent based on the pathology, based on the complete response that was seen in our Pivotal 2 cohort, and that it was very encouraging in using that endpoint in assessing the quality and totality of our data. Now, we do have ongoing discussions with agencies, multiple agencies worldwide, regarding that endpoint as the first endpoint to take a look at, and that's something that we'll provide further updates on as we complete those regulatory discussions. So right now, the formal first primary readout is still based on OR.

The formal first primary readout is still based on our.

Great. Thank you.

Thank you.

Our next question comes from Bert Hazlett from B T. G. Your line is open.

Yes. Thank you. Thank you for taking the questions that two of them.

First it seems that you were in the phase three and in first line melanoma, you would want to match the patient characteristics of pivotal to can you give us any anecdotes that you've been able to do that.

Again phase three pivotal study versus the pivotal to results that you've shown.

And then secondly, JV you mentioned to 62 and the safety could you.

Jessica Macomber Fye: Great, thank you. Thank you. Our next question comes from Bert Hazlitt from BTIG. Your line is open. Thank you. Thank you for taking the questions. I have two of them.

Want to share any characteristics of the safety of that program you saw in phase one thank you.

Hey, Brett this is Jay Z. So one of the things that we did in the pivot owed to cohort is we made sure that we enrolled patients that had the same array of a baseline demographics and risk factors that would match the phase three patient population. So for example, about a third of our patients.

Bert Hazlitt: First of all, it seems that in phase three of first-line melanoma, you would want to match the patient characteristics of PivotO2. Can you give us any anecdotes that you've been able to do that? Again, phase three, the pivotal study versus the PivotO2 results that you've shown? And then secondly, Jay, you mentioned 262 and safety. Could you please?

Presented with liver metastasis that entered into the pivotal to cohort also about a third of our patients presented with elevated.

LDH lactate dehydrogenase levels above the upper limit of normal.

Bert Hazlitt: Want to share any characteristics of the safety of that program you saw in phase one?

As well as being stratified into the M. C M B, which are the more sort of severe or worse prognostic factors for patients with melanoma.

Jonathan Zalevsky: Thank you.

Jonathan Zalevsky: Hey Bert, this is Jay Z. So one of the things that we did in the PivotO2 cohort was we made sure that we enrolled patients that had the same array of baseline demographics and risk factors that would match the Phase III patient population. So, for example, about a third of our patients presented with liver metastases that entered into the PivotO2 cohort. Also, about a third of our patients presented with elevated LDH lactate dehydrogenase levels above the upper limit of normal, as well as being stratified into the M1C and M1B, which are the more severe or worse prognostic factors for patients with melanoma. And the reason why we did that was we ensured that that was a patient population that would match our Phase III. And in fact, if you look at the results of the BMS published for Checkmate 067, the proportion of patients that had liver mets or elevated LDH or M1C status is actually very, very similar to what we have in our PivotO2 cohort. So that's a very important point. I'm very happy you asked that question.

And the reason why we did that was we ensured that that was a patient population that would match our phase three and in fact, if you look at the results on the BMS published for Checkmate <unk> six seven the proportion of patients that had liver mats or elevated LDH or M. C status is actually very very similar to what we have in our.

Thibadeau to cohort. So that's a very important point very happy you asked that question.

For us it was very important because when we looked at the overall pivot owed to cohort data for melanoma not only was that important that we presented by blinded independent Central review right to increase the strength of a single arm cohort, but also that the patients within that cohort had many poor prognostic factors.

And we presented in that last updated said see that even patients with liver meds had a complete responses right. So even the most severe case the most severe setting there was still a very very deep response observed and its patient population that matches the phase three population.

So that's an important point.

Jonathan Zalevsky: And for us, it was very important because when we looked at the overall PivotO2 cohort data for melanoma, not only was it important that we presented it by a blinded independent central review, right, to increase the strength of a single-arm cohort, but also that the patients within that cohort had many poor prognostic factors. And, you know, we presented in that last update at CIDC that even patients with liver magic... had complete responses, right? So even in the most severe case, the most severe setting, there was still a very, very deep response observed, and this is a patient population that matches the phase three population. So that's an important point.

And then to your second question you were asking about the safety with 262, so definitely one of the things that we did in developing to 62 was created an intra Tumoral administration route of administration strategy and we use our polymer conjugation to enrich the residence time of the agent in the injected tumor.

And all that is done to minimize systemic exposure.

And the good thing is that because this is a TLR seven eight.

Based on you know a pathway that we really have a lot of experience and clinically we're able to compare the results that were seeing in our study relative to the results that you'd expect for systemic infusion of and TLR seven eight agonists and as we presented Preclinically and as we signed our toxicology studies and.

Jonathan Zalevsky: And then to your second question, you were asking about the safety of 262. So definitely, one of the things that we did in developing 262 was create an intratumoral administration route of administration strategy. And we used our polymer conjugation to enrich the residence time of the agent in the injected tumor. And all that is done to minimize systemic exposure. And the good thing is that because this is TLR78, it's based on a pathway that we really have a lot of experience with in clinical practice. We're able to compare the results that we're seeing in our study relative to the results that you'd expect for a systemic infusion of a TLR78 agonist. And, you know, as we presented pre-clinically and as we saw in our toxicology studies and others, intratumoral injection is a very, very different and a much better tolerated way to administer a TLR agonist, certainly much, much better than giving it systemically where you have, you know, massive systemic cytokine effects. In the intratumoral setting, it's all very localized, and you really don't see that.

Others intra tumoral injection is a very very different and a much better tolerated way to administer a TLR antagonist certainly much much better than given gets systemically, where you have massive kind of systemic cytokine effects in the intra tumoral setting, it's all very localized and you really don't see that.

Terrific. Thanks to the color look forward to the data.

Sure. Thanks Bert.

Thank you Sir our next question comes from all Choi from Goldman Sachs. Your line is open.

Hi, good afternoon, everyone and thanks for taking your questions I have to the first is on the pay three metastatic melanoma program.

With regard to timeline I think that trial still indicated on C.T. back up to be enrolling patients, but as you're thinking about an interim readout in the fourth quarter.

Bert Hazlitt: Terrific. Thanks to the caller. I look forward to the data.

Given the fact that we saw the thibadeau too that the depth and time to response for integrity.

Paul Choi: Sure. Thanks, Bert.

Paul Choi: Thank you. Our next question comes from Paul Choi from Goldman Sachs. Your line is open. Hi, good afternoon everyone and thanks for taking our questions. I have two. The first is on the phase three metastatic melanoma program with regard to timelines. I think the trial is still indicated on ct.gov to be enrolling patients, but as you're thinking about an interim readout in the fourth quarter, given the fact that we saw with the timid O2 that the time to response for complete responses was about eight months, can you maybe just comment on how we should, you know, sort of frame and what kind of CR rates we should see just given what might be sort of a shorter treatment duration or exposure to the drug during the time period ahead of it?

Can you maybe.

We should.

Aim.

CR rates, we should see just giving you couldn't be sure.

Information expansion.

During the team.

[noise] yeah.

Thanks for the question Paul So it's been stated earlier on I think the endpoint has not been changed this not CR, yet and CR as you pointed out the did the median time to Crs about seven months and because of that if we weren't you do a CR analysis, we would like to follow the patient for probably 10 month.

Duration, and so and so there's going be uncle in discussion with the health northeast regarding the sample size a number that that will be required for registration base on the CR endpoint and based on that on followed with a sufficient duration that's been terming D.

Wei Lin: Yeah. Thanks for the question, Paul. So, as has been stated earlier, I think the endpoint has not been changed to CR yet. And CR, as you pointed out, the median time to CR is about seven months. And because of that, if we were to do a CR analysis, we would like to follow the patient for probably a 10-month duration. And so there's going to be ongoing discussion with the health authorities regarding the sample size and number that would be required for registration based on the CR endpoint. And based on that, followed by a sufficient duration, that's going to determine the readout of the CR, if that were the endpoint. So some of that is still yet to be decided. I think by our current estimate, it's probably going to be roughly around the same time as the current projected ORR. But obviously, this is all based on current projections and in the absence of full health authority interactions. So those things will be made clear in the coming months.

The readout of the CR if that were the endpoints. So so some of that still has yet to be decided I think on.

We buy our current estimate it's probably going to be roughly around the same time us the current project or our but obviously this this old based on current projection and in absence of the food health 40 in traction. So so those things will be made clear.

In the coming month thanks.

Okay. Thanks, a lot way and then just on 358 as you and your partner Lily.

Explore the advancing the program in the various dermatological indication is our start up fairly competitive Ariad I guess, just as you think about efficacy bars, whether it's an 80 or other indications are you with the next set of data updates are you looking too.

For any particular.

Metrics or any points that particular differentiation any color. There you could provide would be helpful. Thanks for taking my questions.

Paul Choi: Okay. Thanks for that, Wei. And then, just on 358 as you and your partner, Lily, explore the development of the program in the various dermatological indications, these are sort of, you know, fairly competitive areas. And I guess, just as you think about efficacy bars, whether it's an AD or other indications, are you looking, with the next set of data updates, for any particular metrics or any points of particular differentiation?

Sure Hey, Paul Yes. This is a very sort of question you asked a couple of days ago.

So in that setting of the dermatological uses definitely the benchmarks are are out there right and we know like agents like aisle 23, and others are they're setting so very unique bars in those settings. So we're aware of those Lilly is aware of those you know and so those are important benchmarks.

Jonathan Zalevsky: Sure. Hey Paul.

For you know judging all of the nature of advancement in Dermatological indications. So that's always there second thing that is though really important is that this is a novel mechanism that's being applied into this dermatological setting and so in fact, we know that there's even expectations of T regs moving with into the skin, where you have.

Jonathan Zalevsky: Yeah, so this is a very similar question you asked a couple of days ago. So in the setting of dermatological uses, definitely the benchmarks are out there, right? And we know agents like IL-23 and others are setting some very unique standards in those settings, so we're aware of those. Lilly is aware of them, and so those are important benchmarks for judging all of the nature of advancement in dermatological indications. So that's always there.

Areas of dysfunctional dermal cell growth for example, we'd expect to vulgar in cirrhotic patients to be infiltrated by T regs or <unk>.

Jonathan Zalevsky: The second thing that is, though, really important is that this is a novel mechanism that's being applied to this dermatological setting. And so, in fact, we know that there are even expectations of Tregs moving within the skin where you have areas of dysfunctional dermal cell growth. For example, we'd expect a vulga in psoriatic patients to be infiltrated by Tregs, or an ED plaque to be also infiltrated by Tregs. So we'll be looking also for that kind of mechanism of action because that adds to that whole assessment. And then the other is, remember that in these kinds of diseases, you see themes of a kind of similar autoimmune dysfunction. The tissue is different because tissues represent different kinds of inflammation. But in terms of immunology, we see similarities.

And 80 plaque to be also infiltrated by Trx or would be looking also for that kind of mechanism of action because that adds.

To that whole assessment and then the other is remember that in these kinds of diseases. You see themes are kind of similar auto immune dysfunction. The tissue is different because tissues represent different kinds of inflammation, but in terms of the immunology, we see similarities and in that regard it indication like.

Topic dermatitis is very important because there are many indications that have a toppy as an underlying disease pathology driver not even beyond a topic dermatitis. That's just a topic in the skin. So we can also see a topic an allergy and many other kinds of settings right beyond the dermal compartments. So those are very important studies that.

Jonathan Zalevsky: And in that regard, an indication like atopic dermatitis is very important because there are many indications that have atopy as an underlying disease pathology driver, not even beyond atopic dermatitis. That's just atopy on the skin, but we can also see atopy and allergy in many other kinds of settings, right, beyond the dermal compartments. So those are very important studies that give us both a sense of opportunity within those specific derm indications and also how to even more widely consider and broaden the Treg mechanism into the additional autoimmune themes covered by those two indications.

Give us both a sense of opportunity within those specific Durham indications and also how to even more widely consider and broadening the T. Reg mechanism into the additional auto immune themes covered by those two indications.

Thanks for the color JV.

[music].

Thank you. Our next question comes from George Farmer from BMO capital markets. Your line is open.

Paul Choi: Thanks for the color, Jay-Z. Thank you. Our next question comes from George Farmer from BMO Capital Markets. Your line is open.

Hi, Thanks for taking my questions.

I'd like to and more about using use and complete response as an endpoint in the phase three melanoma study. Firstly is is Bristol Myers onboard with this approach number one and number two how how do you think about using CR as an endpoint. What is what is the delta that needs to be achieved do you think.

George Farmer: Hi, thanks for taking my questions. I'd like to ask more about using complete response as an end point in the Phase III melanoma study. Firstly, is Bristol-Myers on board with this approach, number one? And number two, how do you...

No one or two to to determine whether the trial should be submitted for an accelerated approval.

George Farmer: What do you think about using CR as an endpoint? What is the delta that needs to be achieved, do you think, in order to determine whether the trial should be submitted for an accelerated approval?

Yes so.

First of all we certainly BMS is a partner with us.

George Farmer: So, first of all, BMS is a partner with us on this. We have had extensive discussions, and based on the 3,000 FDA has shown with the CR end point, BMS is also very much in agreement that this is a valid end point that we should really pursue. And so, now in terms of the BAR.

On this we have had extensive discussion that discussion and based on the on the enthusiasm fts shown with the CR endpoint. BMS is also very much in agreement that this is a valley endpoint that we should go to pursue and so on now in terms of the the bar on.

Wei Lin: So, the bar is nivolumab, which is the control arm in our ongoing studies, about 8 to 9 percent, with sufficient follow-up that we expect to be at the time of the readout. So, that would be the benchmark, and we'll probably target something around 15 percent improvement would be adequate to statistically exclude the possibility of this being a type one error. So, right now, I'll just remind you, based on our Pivotal 2 data, our CR rate, with about 18 months of follow-up, is about 34 percent, and, in fact, even back with a 12-month follow-up, it was at 34 percent, right? So, I think that's what we're trying to project based on that number. So, at least if we're able to replicate what we're seeing in Pivotal 2, we have a good degree of confidence that we can clear the bar of improving upon the past CR seen in nivolumab. Thanks. Okay.

Okay. So the bar is not an Ebola map, which is a control arm in in our ongoing studies by 89% with sufficient follow up that we expect to be at the time to read out so happy that benchmark and we'll probably target something around 15% improvement you with adequate to statistically.

Exclude on the possibility of this being 80 Hod type on air So so thats a so right now just remind you.

Based on our pivotal to data are CR rate.

With about 18 months, a follow up is about 34% and in fact, even Bakken with a 12 month follow up it was at 34% right. So I think that's that's what we're trying to pre project based on that number so at least based if we're able to replicate what we seeing in pivotal too.

We have a good degree of confidence that we can't hear the bar of improving upon this past year being seen in development.

Thanks.

Okay. That's very helpful and then.

George Farmer: That's very helpful. And then, do you think when you ultimately do present more PIVOT-02 data, we'll be able to see some overall survival results from that study?

Do you think when when you ultimately do present more pivot owed to data.

You think we'll be able to see some overall survival results from that study.

Yeah. So.

George Farmer: Yeah, so in PIVO2, the melanoma cohort, we're continuing to follow. There are still a number of patients that are on treatment, and there are these two patients who have the potential to convert from PR to CR. And in the second half of the year, we would like to provide an update on potentially two changes. One is deepening response, and any potential patient can change from PR to CR, as well as a new estimate on what the possibility of PFS would be. As a reminder, with 18 months of follow-up, we have not identified the median progression-free survival yet. And with longer follow-up, we can estimate even a longer PFS potential. And as a reminder, the Ebola map really has about seven months of PFS, six to seven months of PFS. So that is the benchmark in our current study.

No pivot to the melanoma cohort were continuing to follow their it's still a number of patients that are on treatment and theres not leased to patients who have potential of converting from PR to CR and in second half the year, we would like to provide update on potentially two to two changes one is deepening response and.

Any potential pitching containing from PR to CR as well as say as a U.S. spent on what the possibly PFS would be.

As a reminder, with 18 month, a follow up with not identified the meeting.

Progression free survival, yet and with longer follow up we cannot asked me, even a longer PFS potential and as a reminder, Ebola map.

Really has about.

Seven month that PFS six to seven months the PFS, so that as a benchmark in our current study.

George Farmer: And then finally, on Nektar 358. The fact that Lilly is moving forward into a Phase 2 trial in lupus, does that imply that the Phase 1B data is looking good?

Great and then finally on Nexstar 358.

The fact that Lilly is moving forward into a phase two and in lupus does that imply that the phase one data is looking good and what to say what drove that decision to move forward.

George Farmer: What drove that decision to move forward? Hey George, this is Jay Z.

Hey, George this is Jay Z. So so with with Lilly you remember as we entered into an agreement they'll be running for at least for actual phase two studies across multiple autoimmune indications.

Jonathan Zalevsky: So with Lilly, you remember, as we entered into an agreement, they'll be running at least four actual Phase II studies across multiple autoimmune indications. We certainly ran the Phase 1B trial, and Nektar completed that study.

We certainly ran the phase one be nektar completed that study that was a multiple ascending dose study in patients with mild to moderate lupus and.

Jonathan Zalevsky: That was a multiple ascending dose study in patients with mild to moderate disease. And then this phase two study, obviously, is now diving deeper into the lupus population. Obviously, we'll be treating them for a much, much longer duration than a multiple ascending dose study does, and also moving into more moderate to severe disease for therapeutic benefit.

And then this phase two study obviously is now diving deeper into the loop as population, obviously, it would be treating them for much much longer duration than a multiple ascending dose study does and also moving into more moderate to severe disease for.

Therapeutic benefit now why why lupus right as the is the great question that you asked and actually lupus has a very deep biomarker, that's driven by regulatory T cells, and you know and that an application of Nektar three fivek lupus patients have a well known or well characterized dysfunction in their regular.

Jonathan Zalevsky: Now, why lupus, right? It's a great question that you asked. And actually, lupus has a very deep biomarker that's driven by regulatory T cells. And then the application of Nectar 358.

Jonathan Zalevsky: Lupus patients have a well-known and well-characterized dysfunction in their regulatory T cell compartment, and we see this manifested in two ways in patients with disease, especially progressive disease. We see both a lowering of the number of Tregs in circulation relative to healthy patients, patients that don't have lupus, and you also see a decreased suppressive capacity. So when you actually isolate Tregs from lupus patients and you test them in a functional assay, they're very, very poor at immunoregulatory function relative to Tregs, you know, isolated from healthy donors. So both of those represent two key sorts of therapeutic themes, right, for applying Nektar. And we're looking forward also to presenting some data from the Phase 1B study in lupus patients later this year. We have already submitted an abstract to ULAR to present that data, and we look forward to giving an update on that from Phase 1B, and we look even more forward to Lilly starting their Phase 2 study later this year.

Tory T cell compartment and we see this manifested in two ways in patients with a disease, especially progressive disease, we see both the lowering.

And the number of T regs and circulation relative to healthy patients patients that don't have lupus and you also see a decrease suppressive capacity. So when you actually isolate t. Rex from lupus patients and you test them in a functional I say, they're very very poor at immuno regulatory function relative to T regs ice.

Later from healthy donors. So both of those represent two key sort of therapeutic themes right for applying an extra 358 in this mechanism of action into this disease.

So we're looking forward also to presenting some data from the phase one be study in lupus patients. Later this year, we already submitted an abstract to you are to present that data.

We look forward to giving an update on that from the phase one be and we look even more forward to Lilly starting their phase two study later this year.

George Farmer: Great. Thanks, Jay-Z. Thank you. Our next question comes from Jay Olson from Oppenheimer. Your line is open.

Great. Thanks Stacy.

Thank you. Our next question comes from Jay Olson from Oppenheimer. Your line is open.

Jay Olson: Thanks for taking the questions. Can you talk about the data that you have supporting your decision to move the doublet into muscle-invasive bladder cancer, and do you expect to see efficacy in all comers, or will it depend on PD-L1 expression level or tumor mutational burden or some other factor?

Okay. Thanks for taking the questions.

Can you talk about that data that you have supporting your decision to move the double it into muscle invasive bladder cancer and do you expect to see efficacy in all comers or will it depends on PDL, one expression level or tumor mutational burden or some other factor.

Yes. This is way yes, thanks for that question so.

Wei Lin: Yeah, this is Wei. Yeah, thanks for that question.

Wei Lin: So, the data to support us going to muscle mast cells, but bottle cancer is the same data set to support us going to metastatic disease. And there, in fact, in the data we have shared publicly, we've actually seen benefit in the PD-L1 negative as well as the positive. And so, it is whole commerce in the sense it's going to be regardless of PD-L1 status, but it is limited to the cis-positive and eligible population, just like in our metastatic study.

He.

The data to support US go into muscle Mesa data bladder cancers. The same data set the support as Clinton metastatic disease and there.

In fact on in the data we have shared publicly we've actually seen benefit in the PD Lone negative. This was a positive on and so it is whole commerce in the sense as can be a week are the p. only status but.

It is it is on limited to the says Pagani eligible population just like you know metastatic study.

Jay Olson: Okay, great.

Okay, Great and then in RCC can you describe the rationale for pursuing a T.K. I sparing regimen is that based on a potentially superior.

Wei Lin: And then, in RCC, can you describe the rationale for pursuing a...

Jay Olson: A TKI sparing regimen, is that based on a potentially superior AE profile, or are you looking for superior efficacy?

Hey profile are you looking for superior efficacy.

Yeah. It is certainly based on a superior AE profile as you know that the level of equates we eat whether you look at a value map plus exit knit or pemble place. It it's actually very very high attached over half the patients experienced grade three or higher E. During this time excuse me and there's just continuation.

Wei Lin: Yeah, it is certainly based on a superior AE profile, as you know that the level of grade 3 AE, whether you look at a value map plus exit NIP or PEMBO plus exit NIP, it's actually very, very high. In fact, over half the patients experience grade 3 or higher AE during the study treatment, and there's discontinuation due to that. And so to really provide maximum benefit, we expect if we can keep the patient on the drug, that's the way to really provide the maximum benefit. And in addition, by using both the TKI as well as the checkpoint in one regimen as a first line, you basically exhaust most of the available therapy. And if we can provide a TKI spearing regimen as first line, the physician and patient still have reserved a TKI option as second line with subsequent therapy. I think all those are benefits to the patient. So those are multiple considerations that our initial study that really was designed for BST-Caspearin. Obviously, there are some patients who are not eligible for TKI due to a variety of reasons. And so we think it is very important to provide that option to patients for all these reasons.

Due to that and so to really provides maximum benefit.

We expect if that we can pay keeps a patient on club that's the way to really provides maximum benefit and in addition on by using both the T.K. I as fall as the checkpoint in one regimen as a first line basic sauce.

Most of the available therapy, and if we combine a T.K. spearing regimen as first line he physician and patient steel having reserve a T.K. option a second line with subsequent therapy I think all of those are benefit to the patients. So those are multiple considerations that our initial study and I really.

Has been designed P.S.T. Caspian obviously, there are some patients who are not eligible for teekay <unk> due to Friday reasons, and so we thought was very important to provide that option to patients for all these reasons.

Jay Olson: Thanks. That was super helpful. Thank you very much for taking the questions. Thank you. Our next question comes from Arlinda Lee from Canaccord. Your line is open.

Thanks.

Super helpful. Thank you very much taking the questions.

Our next question comes from Arlinda Lee from Canaccord. Your line is open.

Hi, Thanks for taking my questions.

Arlinda Lee: Who is interested in IL-15? There seems to be a number of other competitors in this space, roughly, entering the clinic right around now. I was curious, what do you think are some key differentiators and early reads that we should look at to maybe help assess the Competitive Landscape? Thank you.

Hi, I'm interested in 15, there seems to be a number of competitors in this space.

Roughly.

Entering the clinic right around I was curious what do you think or some key differentiators into early we should look at maybe.

Sure.

Okay. Thank you.

Sure Hi, Linda ZZ, certainly like one of the things about aisle 15 is that it like other aisle to family cytokine zeena like aisle to 15 and seven all the ones that are the same class they have multiple receptor ligand interactions as part of their biology.

Jonathan Zalevsky: Hi Erlinda, this is Jay Z. So certainly, one of the things about IL-15 is that, like other IL-2 family cytokines, you know like IL-2, 15, and 7, all the ones that are in the same class, they have multiple receptor ligand interactions as part of their biology. So there is usually a dedicated alpha receptor, right, and then there is a common or shared set of beta and gamma receptors. And of course, gamma, as you know, is a common gamma chain that is shared with like over 50 different cytokines that signal through it. And so the receptor ligand interactions, the cells that express the different receptor complexes, and all the modes of binding, you And in particular, for IL-15, there are at least three modes of binding. So there's IL-15 alpha-dependent and independent binding. And if it's independent, then it, you know, works kind of like a soluble ligand interacting with the IL-2 receptors.

So there is usually a dedicated alpha receptor.

Right and then there is a common or shared set of beta gamma receptors and of course gamma as you know, it's common gamut chain that shared with like over 50 different cytokine signal through that and so the receptor ligand interactions the cells that express the different receptor complexes and all the modes of binding we believe are very.

The important.

And in particular for I'll 15, there's at least three modes of binding. So there is aisle 15 alpha dependent and independent binding.

And if its independent than it works kind of like a soluble again interacting with the aisle to receptor is beating gamma.

Jonathan Zalevsky: Gamma

Jonathan Zalevsky: functioning kind of sometimes called a super agonist. And then there are two different modes of IL-15-alpha-dependent binding. One is when it's on the same cell; we call that cis, or on a different cell; we call that trans. And in trans binding, it's particularly important because that's driven by cell-cell contact. And a lot of IL-15 signaling is driven at the cell-cell contact level when one cell presents an alpha-bound IL-15 molecule to a neighboring cell that has the beta-gamma receptor complex.

Function in kind of sometimes called as a super agonist and then there's two different modes of vial 15 Alpha dependent binding one is when it's on the same so we call that exists or on a different so we called out and trends and in the trans binding is particularly important because that's driven by sell sell contact and a lot of aisle 15 signal.

<unk> is driven at the sell sell contact level. When you know one cell presents on alpha bound I'll 15 molecule onto a neighboring Sal that has the beta gamma receptor complexes now our molecule nature to buy five is very different from all of the competing pipelines.

Jonathan Zalevsky: Now...

Jonathan Zalevsky: Our molecule, Nektra 2x5, is very different from all of the competing pipelines because in all of those settings, they have IL-15 in complex with the IL-15 receptor alpha. So really, like the Altor molecule or the Xencor and others, or the Novartis's Sushi Domain molecule, they all really share just one primary mode of binding, and that they only interact with the IL-2 receptors, beta They're unable to interact in either the cis or trans alpha-dependent binding mode.

Because then all of those settings. They have aisle 15 in complex with the Io 15 receptor alpha.

So really like the altura molecule or the Xencor others are the Novartis has sushi domain molecule. They all really share just one primary motive binding and that they only interact with the aisle two receptors beta gamma.

They are unable to interact in either the Sis are trends alpha dependent binding modes, so, whereas nektar 255 preserves all of the available receptor ligand complexes and we designed it that way on purpose. So firstly, that's a scientific differentiating differentiation that the receptor level and then we've.

Jonathan Zalevsky: So Nektar 255 preserves all of the available receptor ligand complexes, and we designed it that way on purpose. So firstly, that's a scientific differentiation at the receptor level. And then we've shown examples of what that means biologically. So we can induce higher granzyme induction. We can induce interleukin-18 expression in CD14 monocytes, and we've presented that data publicly. And those are two activities that the receptor-complexed versions of IL-15 targeting were unable to sustain. The other thing that I think is really important to look at is if you see evidence of any kind of tachyphylaxis with repeated dosing, is there a loss of antibiotics? And that's going to be another really important place to look at because I think that's going to be a place where a molecule like Nektar 255 will really distinguish itself as it should have far, far less or no evidence of tachyphylaxis relative to some of the other pipelines.

Sean examples of what that means biologically. So we can induce a higher grands I'm induction, we can induce interleukin 18 expression CD 14, monocytes, whom we presented that data publicly and those are two activities that receptor complexed versions of I'll 15 targeting were unable to sustain.

The other thing that I think is really important to look at is if you see evidence of kind of tactful axis.

Repeated dosing is there a loss and any biological effect and that's going to be another one really important place to look at because I think thats going to be a place where a molecule like nektar 255 will really distinguish itself is it should have far far less or no evidence of tuck ins relaxes relative to some of the other pipelines.

Yes, its accuplex, it's something that might show up.

Arlinda Lee: Is tachyphylaxis something that might show up in Phase 1?

In phase one.

Jonathan Zalevsky: Yeah, so there's been publications from other molecules. For example, there's a publication from the Altor molecule that shows in the clinic that upon repeated dosing, there's a loss of biological effect, specifically at the level of cellular expansions they have measured in the blood of patients treated with that molecule.

Yes, yes, so there has been publications from other molecules.

For example.

Publication.

From the outdoor molecule that shows in the clinic that upon repeated dosing theres a loss of biological effect.

Specifically at the level of cellular expansions they got measured in the blood of patients treated with that molecule.

Thank you.

Sure.

Thank you and our next question comes from Andy Shave from William Blair. Your line is open.

Arlinda Lee: Thank you. And our next question comes from Andy Shea from William Blair. Your line is open. Great, thanks for taking my question. So, in RCC, it's...

Great. Thanks for taking my question. So in RCC, it's a it's kind of interesting because of the frontline setting I think CR drives adoption.

Andy Shea: CR Drives Adoption. And if I remember correctly, the CR rate within the RCC cohort was about 4%. So, just curious if... Well, I guess last year, I think the company had planned on presenting data at ESMO. Just curious about the next steps of...

And if I remember correctly CR rate.

Within the RC cohort was about 4% so just curious if.

Well I guess.

Last year I think the company had planned on presenting data, but just curious about the next steps of data release for that cohort.

Andy Shea: of Data Relief

Wei Lin: For that cohort,

Andy Shea: [inaudible]

So.

Wei Lin: All right, so we shared data in the last earnings call toward the second half of last year, so there's been no new update regarding the RCC data, so we don't have any plans to have another presentation at a major medical congress on the RCC data, but we do plan to present that in manuscript form.

We have I shared data in the last earnings call.

I I towards the second half a lot last year, so theres been new no new update regarding the RCC data.

So we don't have any plans to have another presentation and I know many major medical Congress RCC data, but we do.

Eventually planned to present that in a manner is good for.

Got it okay, and just kind of follow up on Bretts question on to 62, so how.

Andy Shea: Got it. Okay.

Andy Shea: And just kind of follow up on Bert's question on 262. So is the strategic positioning here that you'll have a potential combination of 262 and Benpeg, as a salvage therapy, as a checkpoint. Checkpointless salvage regimen in various solid tumors.

So is the strategic positioning here.

That you'll have a.

That's a combination.

And then peg.

Salvage as a checkpoint.

Checkpoint.

Salvage regimen.

Yes.

Jonathan Zalevsky: Is that a correct assertion?

Is that correct assertion.

Andy Shea: Hey, this is Jay Z. So remember, when we presented this program for the first time, we described the rationale for 262. So in providing an innate signal to BEMPEG, which is an adaptive signal, right, you have a comprehensive kind of immune response. And we developed it in addition so that it's really a wholly owned doublet that Nektar has, and really was developed specifically and expressly to be used with BEMPEG. So then in terms of all of the uses of it, it's really, it could be quite broad. We're choosing to begin clinical development by evaluating its activity in patients with very late stage disease. So, as you know, REVEAL is kind of like a basket study with very advanced patients with solid tumors, rolling multiple different tumor types.

Hi, This is Jay Z, So remember and when we presented this program for the first time, we described the rationale for two six too so in providing in an eight signal to bend Pag, which is an adaptive signal right you have a comprehensive kind of an immune response and we developed it. In addition, so that it's really.

A wholly owned doublet nektar highs and really it was developed specifically in expressly to be used with Empaque. So then in terms of all of the uses of it it's really it could be quite broad we're choosing to begin the clinical development in evaluating the activity in.

Patients with very late stage disease. So as you know reveals that kind of like a basket study with very advanced patients for solid tumors rolling multiple different tumor types, but as we mentioned and we're going to focus on certain tumor types, such as melanoma and the relapse refractory setting as we move forward and you know that wheel.

Andy Shea: But as we mentioned, we're going to focus on certain tumor types, such as melanoma, in the relapsed refractory setting as we move forward. And you know that we'll be evaluating the doublet as well as the triplet by adding a checkpoint inhibitor as well to the combination of Nektar 262 plus BEMPEG. Now there's really a lot of opportunity to use this kind of combination.

The evaluating the double it as well as a triplet by adding a checkpoint inhibitor as well to the combination of Nektar 262, plus Ben Pag now there has really gotten a lot of opportunity to use this kind of a combination will be beginning but like I said, we'll beginning the development in the relapse refractory.

Jonathan Zalevsky: We'll be beginning, but like I said, we'll be beginning the development in the relapsed refractory setting. One of the things that we saw preclinically with the program, remember, was a really deep set of abscopal immunological responses. And we presented data showing, for example, animals that have multiple tumors, but you only needed to inject one tumor and only one time in order to get the full benefit of the immune reaction moving throughout the animal's body and really eradicating any tumor, no matter where it was, no matter how distal it was from the original injected tumor. And this is a response that we call in cancer immunotherapy an abscopal kind of immune response. And so, again, that was really one of the predicated visions of the program. And so, as we move into that setting and as we demonstrate that the molecule can work in that way, that could give a lot of very broad use and broad opportunity for that regimen.

Resetting.

One of the things that we saw Preclinically with the program remember it was a really deep set of ABS Goepel immunological responses and we presented data showing for example animals that have multiple tumors.

But you only needed to inject one tumor and only one time in order to get the full benefit of the immune reaction moving through out the animals body and really eradicating any tumor no matter, where it was no matter how distal it was from the original injected tumor and this is a response that we call and in cancer immunotherapy an ABS.

Copel kind of an immune response and so again that was really one of the predicated visions of the program and so as we move into that setting and as we demonstrate that the molecule can work in that way that could give a lot of very broad use and brought opportunity for that regiment.

Okay, and then in terms of dosing in non small cell lung cancer. So.

Wei Lin: Okay. And in terms of dosing in non-small cell lung cancer, so, you know, the increase in dosing relative to other pivotal studies, is that a non-small cell lung cancer specific phenomenon, or how do you think about just kind of cross-indication differences in dosing?

The increase in inducing relative to other pivotal studies is that.

Non small cell lung cancers specific.

Fit.

How do you think about just kind of cross.

Wei Lin: Yeah, I think there are a couple of thoughts that underlie our plan to both optimize our dose as well as expand to non-small cell lung cancer. And certainly, we stand by our six micrograms per kilogram dose, which is in all the restitution studies in melanoma, bladder cancer, and RCC. And that's all supported by the VO2 data that enabled and engaged the restitution trial with our partner, BMS, and certainly in melanoma, the data is sufficient for a breakthrough designation. So the clinical activity is clearly there. I think we should take a look at the treatment landscape for non-spousal lung cancer and also the biology of the disease and the fact that monotherapy requires a bowel marker. All this highlights the challenge of non-small cell lung cancer and makes us think whether a different dose could provide a greater benefit there. That's one.

Indication.

<unk> dosing.

Yeah, I think there and there were couple of thoughts the underlying our plan to both optimize their dose as follows expand into non small cell lung cancer and certainly we we stand by our six microgram per kilogram dose, which is in all the retribution studies in melanoma bladder cancer RCC.

And that's all supported by the pivotal to died at that enabled and engage it that retribution trial with our partner BMS.

And and certainly in melanoma the data sufficient for a breakthrough designation. So the clinical activities clearly there I think we as we take a look at the treatment landscape for non small cell lung cancer and also the biology disease and the fact that monotherapy.

Course at biomarker.

Oldest highlight that the challenge of non small cell lung cancer and makes us think by there a different dose could provide greater benefit there and that's one and the other is since we treated around 500 patients. So with a combination you will not plus band Pag, we've learned a lot about the safety profile of giving Ben packed together with you.

Wei Lin: And the other thing is that since we treated around 500 patients or so with a combination of nivolumab plus BenPak, we learned a lot about the safety profile of giving BenPak together with nivolumab. And from all those lessons, we were able to control the AE quite, quite well, much better than when we started the program. And we believe with the current management guidelines, we can actually dose BenPak at a higher dose. And that's another hypothesis we'd certainly like to try. And that's another reason why we're undertaking the dose optimization. So if we're able to achieve a higher dose, then potentially, in the lung registration study, we would be using that dose to move forward.

Hello map and and from all those lessons, we're able to control the quite quite well much better than when we started to the program and we believe with the current management guideline, we can actually dose band pack at a higher dose and that's another hypothesis, we sure if he'd like to try and that's another on we use.

And why we're undertaking that those dose optimization. So if we're able to achieve a higher dose than potentially in the longer actuation study, we'd be using that dose to move forward.

Okay and last question for a gill.

Andy Shea: Okay, and last question for Gil. Just kind of remind us, in terms of the R&D reimbursement from Bristol, I think there's a cap, there's an annual cap, and the access..., access amount would basically get reimbursed in the first quarter.

Hi, just kind of remind us in terms of the R&D reimbursement from Bristol I think Theres Catherine.

Happen.

The access.

Excess amount.

Typically get reimbursed in its first quarter, so how do you.

Andy Shea: So how do you, from a modeling standpoint? How do you do it?

I don't think standpoint, how do you.

Andy Shea: I kind of anticipate that as we... Yeah, so you're right, Andy, there remains a $125 million a year cap on R&D expense sharing under the agreement, and that's under GAAP revenue. And we expect this year that we will exceed the cap toward the end of the year. And the way the agreement works is that we would be reimbursed for exceeding the cap in the following quarter. So that cash would come in in 2021.

And I anticipate that as we head into that.

The first yes. So there you are right any there is a there remains a 125 million dollar a year cap on.

R&D expense sharing under the agreement and that's under under GAAP revenue and we expect this year that we will exceed the cap towards the end of the year and the way. The agreement works is that that we would reimburse for we'd be reimbursed for exceeding the cap on the following quarter, so that cash would come.

And in 2021.

Gil: Okay, great, thanks for asking.

Okay, great. Thanks for answering all my questions.

Andy Shea: Great, thanks for answering all my questions. Thank you. And again, ladies and gentlemen, to ask a question, please press star and then 1 now. And we're going to take our last question from Daina Graybosch from SVB LeanRink. Your line is open.

Thank you and again, ladies and gentlemen to ask a question. Please press Star then one now.

And we're going to take our last question from Dana Gray Bosh from SVB Leerink. Your line is open.

Daina Michelle Graybosch: Thank you so much for the question. The first is clarification on the early stage melanoma trial. Is this going to be an adjuvant trial or a neoadjuvant adjuvant trial?

Thank you so much for the questions. The first just a clarification on the early stage melanoma trial.

This is gonna be an adjunct trial or neoadjuvant.

On the retribution study is hey, Ashwin trial its conformed with the currently approved label for Nivolumab, which will serve as a control arm for this study.

Wei Lin: The resolution study is an adjuvant trial. It conforms with the currently approved label for NebolaMap, which will serve as a control arm for the study.

Daina Michelle Graybosch: And a follow-up on that, because in melanoma, we've seen really dramatic benefit in the neoadjuvant setting with I.O., especially the combination, but also single agent. Do you worry about missing out on that benefit, or will patients be getting NEVO alone in the neoadjuvant setting here?

Then a follow up on that because of melanoma, we've seen really dramatic benefit and then neoadjuvant setting with Io, especially the combination but also single agent do you worry about missing out on that benefit or the patients be getting nivo alone and then neoadjuvant setting.

Wei Lin: That's certainly a possibility. I think current standard practice, but that's actually not the standard of care. There's no approval in the new adjuvant setting because most of the data are generated in very small cohorts of patients, really in the teens. And so I think for approval in the new adjuvant setting, there has to be a full randomized trial, what's been done for the adjuvant study. And certainly, right now, there's no attempt by any of the sponsors to undertake such a large study, given the standard care is already established in the adjuvant setting. So now, some academic centers can practice, and some physicians may treat their patients using a new adjuvant approach for selected patients. But I think the predominant clinical practice is not going to be the new adjuvant. And hence, we don't expect in the foreseeable future, certainly within the time frame of our study reading out, the new adjuvant is going to overtake NSAIDs as the standard care. Thanks.

Ah that's certainly a possibility I think a current standard practice, that's actually not the standard care Theres no approval in the new acts and setting.

Because most of this data are generated in very small cohort patients really in the kings and so I think on for an approval.

In the new actions setting there has to be a full randomized trial. It's been what's been done for Ashwin study and and certainly right now Theres no no undertaking.

Can't for by any of the sponsors to undertake such a large study.

Given this tenant cares what do you stylish into action setting. So now some academic centers can practice and some position may treat themselves may may treat their patients using a new actuant approach for selected patients, but I think the predominant clinical practice, it's not going to be neoadjuvant and hence.

We don't expect in the foreseeable future certainly within timeframe our study weeding out.

The new Aftons cannot.

Overtake Ashwin, it's a standard care.

Thanks.

Daina Michelle Graybosch: Thank you for that. Second question back on CR as a potential end point in a frontline metastatic melanoma study. It's interesting because usually the response rate is very quick, so you get a snapshot of a certain amount of follow-up, but I think we all know that in melanoma, if you look at the three or four-year CR rate, it continues to deepen with nivolumab or pembrolizumab alone. And I wonder how you're thinking about that, whether you'd have to have this data mature over time, getting an interim, but also looking at the comparison of CR rates over a number of years.

Second question back on the CR as a potential endpoint in the front line metastatic melanoma study it's interesting because usually response rate is very quick.

Got a snapshot of a certain amount of follow up but I think we all know that in melanoma. If you look at that three or four year CR rate continues to deepen of nivolumab or pembrolizumab alone and I wonder how you're thinking about that.

Whether you'd have to have this data mature over time getting in and around but also looking at the comparison to see IRA over a number of your.

Wei Lin: Yeah, certainly, our confidence in this potential use of CR as a basis for child approval is based on our Pivotal 2 data. As it has been pointed out previously, our time, median time to CR is actually seven months. So it's actually fairly fast.

Yeah. So.

Certainly.

Our confidence in this potential use of CR I see basis for its hard approve is based on our pivotal to data.

It's been pointed out previously our time median time to Crs actually seven month. So it's actually a fairly fast I understand there's some in based on checkmate 67, Theres very long follow up up to five years and it is true that with prolong follow up the CR DUS deepened overtime, but even if you look at then I can you.

Wei Lin: I understand there's, based on Checkmate 67, a very long follow-up, up to five years. And it is true that with prolonged follow-up, the CR does steepen over time. But even if you look at the Nivolumab or Nivo IPI data, with prolonged follow-up, even after four to five years of follow-up, Nivo has not achieved a CR higher than 20%, and Nivo plus IPI has really achieved a CR rate of 21%, which is very different than what we've been able to accomplish just with a little over a year of follow-up of 34%. So that is really the distinguishing factor, right? And so the rate of CR that BAMPAC plus Nivolumab has been able to achieve in the Pivotal 2 study is much quicker. And I think during the time of follow-up, even with what we plan to have a 10-month follow-up, we can really truly distinguish ourselves.

Well, a map and nimble if he data what's prolonged follow up on even after four to five years a follow up evil has not had chivas you are higher than 20% and knievel plus he has from purely achieved a CR rate of 21%, which is very different than what weve able to accomplish just with a little over your follow up.

34 per person so that is really the distinguishing factor right, it's and so the.

At the at the rate of CR that depend tech plus nivolumab has been able to achieving the tip of the two study as much quicker and incurred during the time to follow up.

Even with a well we plan to have a 10 month of follow we think we can't really truly distinguish ourselves from the new alone map controller.

Daina Michelle Graybosch: Great, and one last question for Jay-Z around Nektar 255. We know a lot of patients, especially hematological malignancy patients, have exhausted or dysfunctional NK cells, and I'm wondering if Nektar 255 can restore their function and proliferation as well.

Okay. One last question for Jay Z around Nektar 255.

We know a lot of patients, especially hematological malignancy patients have exhausted or dysfunctional NK cells.

Wondering if not for 255 can restore their functioning perforation as well.

Yeah, that's definitely one of the things that were very very excited to look at and it's part of the reason why the starting patient population.

Jonathan Zalevsky: Yeah, this is definitely one of the things that we're very, very excited to look at. And it's part of the reason why the starting patient population that we have in our study is late-stage patients with NHL, and in particular, late-stage patients with multiple myeloma. You know Daina really well, right? Particularly in multiple myeloma, there's a massive and can be catastrophic dysfunction in the NK cell compartment, both in terms of cells that have poor effector status that can't maintain their ability to degranulate and cell numbers that go down. And even, for example, even after agents like DARA, for example, or any CD38 that depletes these cells further as well. So definitely, that's one of the earliest biomarkers that we're looking at in our clinical trial. As you know, with these cytokines, we measure systemic cell changes all the time. And because it's a blood-based central compartment measurement, it's very robust and easy to measure. So it's definitely a key part of our biomarker program and our mechanism of action testing for Nektar 255.

We have in our study our late stage patients with NHL and in particular late stage patients with multiple myeloma.

You know Dana really well right, particularly in multiple myeloma, there's a massive and can be catastrophic.

Function and the NK cell compartment, both in terms of cells that are poor effector status that can't maintain you know the ability to de granulate and sell numbers that go down in and even for example, even after agents like direct for example, or any cdthirty eight the depletes the cells further as well so definitely.

Thats one of the the earliest biomarkers that we're looking at in our clinical trial.

As you know with these cytokine that we measure systemic sell changes all the time and because it's a blood based central compartment measurements very robust and easy to measure. So it's definitely a key part of our biomarker program and our mechanism of action testing for Nektar 255.

Operator: Great, thank you. Thank you. And that does conclude our question and answer session for today's conference. I'd now like to turn the conference back over to Mr. Howard Robin.

Great. Thank you.

Thank you and that does conclude our question and answer session for today's conference I'd now like to turn the conference back over.

Robin for any closing remarks.

Howard W. Robin: Okay, well, thank you everyone for joining us today. And, as usual, I'd like to thank our employees for their hard work and their commitment to our company. You know, Nektar has really built a highly valuable pipeline of programs in Immuno-Oncology and Immunology, and we've really tried to address large patient populations where large numbers of patients are suffering from serious diseases and have a high unmet medical need. In solid and liquid tumors across many potential treatment indications and in autoimmune disease, across multiple autoimmune and chronic inflammatory diseases.

Okay, well. Thank you everyone for joining us today and as usual I'd like to thank our employees for their hard work or in their commitment to our company. You know Nektar is really built a highly valuable pipeline of programs in immuno oncology and immunology and we've we've really tried to address large patient populations were large numbers of patients are suffering.

From serious disease and have a high unmet medical need in solid and liquid tumors across many potential treatment indications in an auto immune disease across multiple autoimmune and chronic inflammatory disease states. So we look forward to advancing these programs continue to provide you with progress on our growth and we look forward to seeing many of you at conferences.

Operator: So we look forward to advancing these programs, continuing to provide you with progress on our growth, and we look forward to seeing many of you at conferences over the next several months. So thank you very much for joining us today, and we look forward to seeing you.

Over the next several months. So thank you very much for joining us today and we look forward to soon thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a wonderful day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program you may all disconnect everyone have a wonderful day.

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