Q4 2020 Nektar Therapeutics Earnings Call

[music].

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Nektar Therapeutics fourth quarter 2020 financial results. At this time, all lines are in a listen-only mode.

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

At this time all participants 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 Star and then one of your telephone. Please be advised that today's conference maybe recorded if you require any further assistance. Please press star and then zero I would now like to hand, the conference over to your speaker today.

Operator: 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 star and then one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star and then zero.

Jennifer Ruddock: 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, and good afternoon, everyone. Thank you for joining us.

MS. Jennifer Ruddock head of corporate Affairs, Ma'am you may begin.

Thank you Crystal and good afternoon, everyone.

And for joining us today.

Jennifer Ruddock: With us on the call are Howard Robin, our President and CEO; Gil Laboucherie, our COO and CFO; Dr. Jonathan Zalevsky, our Chief of Research and Development; and Dr. Brian Kotson, our Interim Chief Medical Officer and Head of Development. On today's call, we expect to make forward-looking statements regarding our business, including clinical trial enrollment and clinical trial results, as well as timing and plans for future clinical trials. Timing and plans for future clinical data presentations. The Therapeutic Potential of our Drug Candidate

With us and the calls are Howard Robin, our president and CEO Gill.

Kilda, Bruce Reed R C O O and CFO.

Dr. Jonathan <unk>, our chief of research and development and Dr. Brian Kaufman, our interim Chief Medical Officer and head of development.

On today's call, we expect to make forward looking statements regarding our business <unk>.

Including clinical trial enrollment and clinical trial results timing.

Timing and plans for future clinical trials.

And plans for future clinical data presentations.

And the therapeutic potential of our drug candidates outcomes and plans for health authority regulatory actions and decisions.

Jennifer Ruddock: Outcomes and Plans for Health Authority Regulatory Actions and Decisions. Estimates and predictions of the COVID-19 pandemic's impact on our business and clinical trials, financial guidance, and certain other statements regarding the future of our business. Because these four outlooks and 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 the Form 10-Q that was filed on November 6, 2020, which is available at sec.gov. We undertake no obligation to update any of these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Estimates and predictions of the COVID-19 pandemic impact on our business and clinical trials and.

Financial guidance and certain other statements regarding the future of our business.

Because these forward looking 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 was filed on November six 2020, which is available at SEC Gov. We undertake.

No obligation to update any of these forward looking statements, whether as a result of new information future developments or otherwise.

Jennifer Ruddock: A webcast of this call will be available on the IR page of Nektar's website at Nektar.com. Before turning the call over to Howard, I'd like to remind you that I will moderate the Q&A session for our team as we're all in different locations. So we can avoid technical issues during the session. We appreciate your patience as we work to ensure there are no technology disruptions for those listening on the call today. With that said, I will hand the call over to our President and CEO, Howard Robin. Howard.

Webcast of this call will be available on the IR page of vectors website and after dotcom Biff.

Before turning the call over to Howard I'd like to remind you that I will moderate the Q&A session for our team as we're all in different locations. So we can avoid technical issues. During this session. We appreciate your patience as we work to ensure there are no technology disruptions for those listening on the call today.

With that said I will hand, the call over to our President and CEO Howard Robin Howard.

Howard W. Robin: Thank you, Jennifer. Thanks to everyone for joining us on the call today. Over the past year, NICRA has made excellent progress positioning our company as a leader in the development of cytokine therapeutics. Importantly, we successfully broadened the registrational program in solid tumors for our lead IL-2 program, BEMPEG, with the addition of multiple registrational trials in adjuvant melanoma, muscle-invasive bladder cancer, and most recently, head and neck cancer. We also successfully completed enrollment in the ongoing Nektar-sponsored registrational studies in renal cell carcinoma and bladder cancer, overcoming the challenges presented by the pandemic over the past year.

Thank you Jennifer and thanks to everyone for joining us on the call today.

Over the past year Knickers made excellent progress positioning our company as a leader and the development of cytokine Therapeutics and importantly, we successfully broadened the registrational program in solid tumors.

Lead IL two program been pegged with the addition of multiple Registrational trials in adjuvant melanoma muscle invasive bladder cancer, and most recently head and neck cancer.

We also successfully completed enrolment and the ongoing nectar sponsored Registrational studies in renal cell carcinoma.

And bladder cancer overcoming the challenges presented by the pandemic over the past year.

We initiated a new development strategy with our IL 15 program advancing two separate phase one two clinical studies to combine <unk> 255, with leading ADC compounds, rituximab, and <unk> and liquid tumors and cetuximab and solid tumors.

And for electric and $3 58, our T. Reg stimulator, we and our partner Eli Lilly broadened the clinical program with four mid stage studies and different autoimmune disorders, including a phase two and lupus a phase II study in ulcerative colitis, and two phase <unk> studies, one in psoriasis and the <unk>.

Howard W. Robin: We initiated a new development strategy with our IL-15 program, advancing two separate Phase I-II clinical studies to combine Nektar-255 with leading ADCC compounds, rituximab and daratumumab in liquid tumors, and cetuximab in solid tumors. And for Nektar 358, our Treg stimulator, we and our partner, Eli Lilly, broadened the clinical program with four mid-stage studies in different autoimmune disorders, including a phase 2 study in lupus, a phase 2 study in ulcerative colitis, and two phase 1B studies, one in psoriasis, and the second in ectopic dermatitis.

And atopic dermatitis.

We have also bolstered our.

Our already strong financial position with a $150 million royalty financing in December and and novel $150 million risk sharing and collaboration which we just completed with Blackstone life Sciences and I'd be more.

<unk> SF J entity to fully fund the study you prevent peg plus Pembroke and head and neck cancer and we're working with Merck on this study.

Our deep pipeline of candidates and.

Immuno oncology and immunology together with a strong cash balance position nectar well as we enter 2021.

Howard W. Robin: We've also bolstered our already strong financial position with a $150 million royalty financing in December and a novel $150 million risk-sharing collaboration, which we just completed with Blackstone Life Sciences and Abingdon through their SFJ entity to fully fund a study for BEMPEG plus PEMBRO in head and neck cancer. And we're working with Merck. Our Deep Pipeline of Candidates.

So let me begin today with been pegged our most advanced late stage clinical program and IL two pathway agonist that is being developed and combination with checkpoint inhibitors, and Ebola map and pepper Elizabeth.

Our strategy for <unk> is focused on pursuing multiple large frontline and adjuvant tumor settings.

Howard W. Robin: Immune Oncology and Immunology Together with a Strong Cash Balance position Nektar well as we enter 2021. So let me begin today with BEMPA, our most advanced late-stage clinical program and an IL-2 pathway agonist that is being developed in combination with checkpoint inhibitors nivolumab and pembrolizumab. A strategy for BEMPEG is focused on pursuing multiple large frontline and adjuvant tumor settings,

Melanoma renal cell carcinoma, bladder cancer, non small cell lung cancer and head and neck cancer.

The opportunity for combining <unk> with PD, one inhibitors and these tumor settings is significant and <unk>.

Two 2020 sales of PD ones across these settings were greater than $5 billion.

And we were exceptionally proud that we've put in place a development program that positions us to capture significant value with them.

Over the past year, we and BMS initiated two new Registrational studies for <unk>, plus an Ebola mab, both of which target large patient populations.

Howard W. Robin: and Owen Ulmer.

Howard W. Robin: Carcinoma, Bladder Cancer, Non-Small Cell Lung Cancer, and Head and Neck. The opportunity for combining BEMPEG with PD-1 inhibitors in these tumor settings is significant. In 2020, sales of PD1s across these settings were greater than $5 billion. And we were exceptionally proud that we put in place a development program that positions us to capture significant value with... Over the past year, we at BMS initiated two new registrational studies for BEMPEG plus nivolumab, both of which target large patient populations, the first in adjuvant melanoma that Nektar is sponsoring, and the second in muscle invasive bladder cancer that DMS is sponsoring.

First and adjuvant melanoma that Nektar is sponsoring and the second and muscle invasive bladder cancer that BMS sponsored.

In addition, BMS also initiated a phase II study and renal cell carcinoma for <unk>, plus vivo with a teekay to pave the way for future development of a teekay <unk> inclusive regimen and the setting and first line RCC.

The study is designed to build on their recent successful approval of Levo plus Cabo.

And we're excited about moving forward and that study.

Separately.

And also advanced our own phase II study known as propel and patients with non small cell lung cancer studying been pegged plus Pembroke.

And just last week, we announced two separate collaborations.

They're designed to fund and advance a new Registrational study for been pegged plus Pembroke and first line head and neck cancer.

Briefly comment on these recent collaborations.

First we entered into a clinical trial collaboration and drug supply agreement with Merck for a phase two three study have been pegged plus pembroke versus Perm ROE mono therapy, and patients with metastatic head and neck cancer, whose tumors express PD lone.

Howard W. Robin: In addition, BMS also initiated a phase two study in renal cell carcinoma for BEMPEG plus NEVO with a TKI to pave the way for future development of a TKI-inclusive regimen in the setting of first-line RCC. The study is designed to build on their recent successful approval of NEVO plus CABU, and we're excited about moving forward with that. Separately, Nektar also advanced our own phase two study known as PROPEL in patients with non-small cell lung cancer studying BEMPEG plus PEMBRO.

The study is designed to allow us to pursue global registration of <unk> in this indication and we are very grateful to collaborate with Merck for the first time on them.

And we'll provide <unk> at no cost for this 500 patient study and they are also collaborating with us on the protocol and study designs.

<unk> has emerged as the leading checkpoint inhibitor and standard of care in this setting overtaking the extreme regimen and its usage and first line care and we are excited about the potential of been pegged to help these patients.

Howard W. Robin: And just last week, we announced two separate collaborations that are designed to fund and advance a new registrational study for BEMPEG plus PEMBRO in first-line head and neck cancer. I'll briefly comment on these recent collaborations. First, we entered into a clinical trial collaboration and drug supply agreement with Merck for a phase two, three study of BEMPEG plus Pembro versus Pembro monofil in patients with metastatic head and neck cancer whose tumors express PD-L1. The study is designed to allow us to pursue global registration of BEMPEG in this indication.

JC will talk more about this study and the rationale for and IL two agents in this indication.

Second to fund this study and a non dilutive fashion, we entered into a very innovative agreement with SF Jay and entity backed by Blackstone life Sciences, and having work.

With a commitment from them for $150 million.

We're pleased that <unk> and its investors showed their conviction and been pegged by committing this capital entirely at risk.

This underscores their belief that <unk> has the potential to be approved in multiple tumor settings.

And exchange following <unk> approval, we have a series of success based milestone payments that will be made over approximately seven years importantly, again. These patients. These payments are made only.

Howard W. Robin: and we are very grateful.

Howard W. Robin: with Merck for the first time on BEMfD. Merck will provide PEMBRO at no cost for this 500 patient study, and they are also collaborating with us on the protocol and study. Pembro has emerged as the leading checkpoint inhibitor and standard of care in this setting, overtaking the extreme regimen in its usage in first-line care, and we are excited about the potential of BEMPEG to help these patients. Jay-Z will talk more about this study and the rationale for an IL-2 agent in this indication.

And then peg secure FDA approval and these patients these payments do not start until after the completion of the head and neck study, which is currently projected for 2024.

With our projection for a potential first payment of $30 million and 2025.

We estimate that this new opportunity and head and neck cancer could be as large as $500 million to $800 million Glu.

Globally, each year and so it represents a substantial value addition to the <unk> development program.

From the onset we had envisioned been pegged to be developed with other checkpoint inhibitors beyond development.

Our original agreement with BMS provided us with the ability to conduct independent studies outside of the indications being pursued by the nectar BMS joint development plan underway with Nemo.

Howard W. Robin: Second, to fund this study in a non-dilutive fashion. We entered into a very innovative agreement with SFJ, an entity backed by Blackstone Life Sciences and Abing, with a commitment from them for $150 million. We're pleased that SFJ and its investors showed their conviction in BEMPEG by committing this capital entirely at risk. This underscores their belief that BEMPEG has the potential to be approved in multiple tumor settings. In exchange, following BEMPEG's approval, we have a series of success-based milestone payments that will be made over approximately seven years.

For Pembroke.

The two largest metastatic settings with monotherapy labels are non small cell lung cancer and head and neck cancer.

With this new head and neck study, we now have a strategy to address both of these tumor types and to do so we're combining with the clear market leader in these settings.

Mind, you and the agreement with BMS, we <unk>.

Have a $1 $43 billion payment and filing and approval milestones for <unk> taken and the U S Europe, and Japan and these are tied to any approval of them deck.

And whether the approval is with Nemo or not.

Eligible to receive $625 million for filings and approvals and the first and indication and $260 million for each of the next three indications again, regardless of whether the filing and approval is in combination with opdivo or Pembroke.

Howard W. Robin: Importantly, again, these payments are made only if BEMPEG secures FDA approval, and these payments do not start until after the completion of the head and neck study, which is currently projected for 2024, with our projection for a potential first payment of $30 million in 2025. We estimate that this new opportunity in head and neck cancer could be as large as $500 to $800 million globally each year, and so it represents a substantial value addition to the FEMPEG development program.

With six Registrational studies to support potential filings, we have many opportunities to bring and these milestones.

At Citi. This past November we reported new data for the patients and our metastatic melanoma cohort from pivotal too.

These data illustrated the ability of them pegged to help melanoma patients achieve a high reduction and tumor burden and demonstrated the continued benefit of the doublet treatment over time.

90% of patients, who responded experienced a 100% reduction and target lesions or a complete response to the investigational doublet treatment and we know in this setting that depth of response can translate into improved PFS and OS.

Howard W. Robin: You know, from the onset, we had envisioned BEMPEG to be developed with other checkpoint inhibitors beyond nivolumab. Our original agreement with BMS provided us with the ability to conduct independent studies outside of the indications being pursued by the Nektar-BMS joint development plan underway with NEVA, for Pembroke.

The median PFS reported for the <unk> plus NEVA cohort is 39 months.

Which compares very favorably to the historical PFS of six nine months for Knievel alone from the Checkmate <unk> study.

As a reminder, knievel monotherapy is the comparator arm and our ongoing phase III study and these patients. So the data presented at Citi and provides us with and even more confidence and <unk> therapeutic potential.

Howard W. Robin: The two largest metastatic settings with monotherapy labels are non-small cell lung cancer and head and neck. With this new head-and-neck study, we now have a strategy to address both of these tumor types, and to do so, we are combining with the clear market leader in these settings. To remind you, in the agreement with BMS, we have a $1.43 billion payment in filing and approval milestones for BEMPEG in the U.S., Europe, and Japan, and these are tied to any approval of BEMBEC, whether the approval is with NEBO or not.

So the first time, we also reported a landmark overall survival figure for Bamberg cluster Nebo at two years of 77% and the median overall survival has not yet been reached.

Our results compare favorably to OS data for Nemo alone as well, which reported landmark OS a 59% of two years.

We also recently reported very good enrollment progress with and Metro sponsored propel study, which is evaluating <unk> plus Pembroke and patients with first line non small cell lung cancer. The study will provide us with key data in order to develop a phase III strategy in this setting with Pembroke.

Howard W. Robin: We're eligible to receive $625 million for filings and approvals in the first indication and $260 million for each of the next three indications, again, regardless of whether the filing and approval is in combination with NEVO or PEMBRA, with six registrational studies to support potential filing. We have many opportunities to bring these milestones. At CITSI this past November, we reported new data for the patients in our metastatic melanoma cohort from PivotO2. These data illustrated the ability of BEMPEG to help melanoma patients achieve a high reduction in tumor burden and demonstrated the continued benefit of the doublet treatment over time. 90% of patients

As we mentioned at the Jpmorgan conference enrollment in this trial came and well ahead of schedule with a high number of patients enrolled in November and December of last year.

And we plan to report the initial data from this study and the second half of this year.

This will be data and approximately 60 patients spread across three separate PDL, one expression cohorts and I'll, let Jay Z and share more on propel and a moment and he will also provide and update on our work with Ben Peg and the COVID-19 study.

Turning to Nektar 250, fives are second and the major Io cytokine program with a broad based mechanism that causes the proliferation of natural killer cells and the expansion of CDA T cells and memory cells.

By combining nektar $2 55, with the leading approved a DCC antibodies, which require functional natural killer cells for their mechanism of action. We believe that we can improve the therapeutic potential of these targeted antibody therapies for patients.

Howard W. Robin: The result of the study was that the patient who responded experienced a 100% reduction in target lesions or a complete response to the investigational doublet treatment, and we know in this setting that depth of response can translate into improved PFS and OS. The median PFS reported for the BEMPEG plus NEVO cohort is 30.9 months, which compares very favorably to the historical PFS of 6.9 months for NEVO alone from checkmate 06-07.

We reported very encouraging early clinical data at this past Citi conference and patients with multiple myeloma and non Hodgkin's lymphoma, which show that Nektar $2 55 is increasing NK cells and these patients and we demonstrated the clinical benefit of Nektar $2 55, as a single agent and these early dose cohorts.

And.

In addition to the ongoing trial and Hematological malignancies, and we're also enrolling patients and our phase one solid tumor study we expect to have additional data from these studies and the second half of this year.

The third cytokine and our portfolio is net for $3 58, which is being developed in partnership with Eli Lilly to address a broad range of autoimmune and inflammatory conditions.

Howard W. Robin: As a reminder, nevo monotherapy is the comparator arm in our ongoing phase three study in these patients, so the data presented at CITSE provides us with even more confidence in BEMPEG's therapeutic potential. For the first time, we also reported a landmark overall survival figure for Bembeg Plasnivo at two years of 77%, and the median overall survival has not yet been reached. The results compare favorably to OS data for Nevo alone as well, which reported a landmark OS of 59% at two years.

All of which represent significant patient populations.

We're truly excited about Louise commitment to this program and Brian will share more of this program later in the call.

Following the positive data for <unk> 358, and lupus patients last year Lilly commenced a 280 patient phase two study in lupus and it's now also initiating a 200 patient phase II study and ulcerative colitis and these add to the ongoing separate phase <unk> studies in psoriasis and atopic derma.

Howard W. Robin: We also recently reported very good enrollment progress with the Nektar-sponsored PROPEL study, which is evaluating BEMPEG plus PEMBRO in patients with first-line non-small cell lung cancer. This study will provide us with key data in order to develop a Phase III strategy in this setting with PEMBRA. As we mentioned at the J.P. Morgan Conference, enrollment in this trial came in well ahead of schedule, with a high number of patients enrolled in November-December of last year.

Right.

We entered 2021 with an exceptionally strong balance sheet with $1 $2 billion and cash and no debt.

And I'll now turn the call over to Jay Z, who will expand on our been pegged nektar $2 62, and Nektar $2 55 programs Jay Z.

Thank you Howard.

Let me begin with a quick review of the <unk> data from the pivotal team melanoma cohort presented and Sydney.

And Howard noted we reached a median PFS and 39 months overall response rate was 53% with 34% of patients and achieving a complete response and <unk>.

Howard W. Robin: We plan to report the initial data from this study in the second half of this year. This will be data from approximately 60 patients, spread across three separate PD-L1 expression levels. And I'll let Jay Z share more on Propel in a moment, and he will also provide an update on our work with BEMPEG in COVID-19. Now, turning to Nektar 255s, our second major IO cytokine program with a broad-based mechanism that causes the proliferation of natural killer cells and the expansion of CD8 T-cells in memory.

Accordingly, we have also observed a media and depth of response at 78, 5%.

Our results are notable when you look at historical data from published literature. The depth of response for single agent and eval, and it'd be Nemo, which were 35% and 52% respectively.

And we have discussed before and <unk>.

SBA meta analysis of melanoma trial has shown the depth and responds and target lesions highly correlates with improved PFS and OS.

And indeed with a median PFS of 39 months, we've observed a correlation very consistent with the F. D. A meta analysis.

We have not yet reached a median overall survival for this cohort, but as Howard stated earlier, our landmark of less than two years.

Howard W. Robin: By combining Nektar 255 with the leading approved ADCC antibodies, which require functional natural killer cells for their mechanism of action, we believe that we can improve the therapeutic potential of these targeted antibodytherapies for patients. We reported very encouraging early clinical data at this past CFI conference in patients with multiple myeloma and non-Hodgkin's lymphoma, which show that Nektar 255 is increasing NK cells in these patients, and we demonstrated the clinical benefit of Nektar 255 as a single agent in these early dose cohorts.

And was substantially better than historical rates reported for the current standards of care in this setting neo as well and repeating Evo and <unk>.

Data and reinforce our confidence as we advance our ongoing trials for <unk>.

Including our five ongoing registrational trials and with the coming study and head and neck cancer will soon be a total of six Registrational studies.

Now, let me start with an update on the first line metastatic melanoma study, which is being run by our partner BMS.

As a reminder, and 2019, we received the breakthrough therapy designation for <unk>, plus Nemo and based on the high complete response rate and we observed and the Senate.

And the phase III study, which compares the doublet to single agent Nemo and we have three primary endpoints overall response rate or a lot of our progression free survival or PFS and overall survival OS.

Howard W. Robin: In addition to the ongoing trial in hematological malignancies, we are also enrolling patients in our Phase I solid tumor study. We expect to have additional data from these studies in the second half of this year. The third cytokine in our portfolio is Nektar 358, which is being developed in partnership with Eli Lilly to address a broad range of autoimmune and inflammatory conditions, all of which represent significant patient populations. We're truly excited about Louie's commitment to this program, and Brian will share more about this program later in the call.

<unk> and endpoint was designed as a potential early submission opportunity for the <unk>, plus NEVA and combination and the PFS endpoint and designed to support and potential full approval.

As you know BMS is running this study and.

And we currently expect that they could have initial data from this trial available sometime in the timeframe of late this year or the first part of 2022.

PFS is and event driven analysis and a number of other factors, including the rate of PFS event accumulation and might impact this time.

The original design of the study and assumed the median PFS for the nimble and that arm to be comparable to the six seven months observed and the checkmate <unk> seven study.

Howard W. Robin: Following the positive data for Nectar 358 in lupus patients last year, Lilly commenced a 280 patient phase two study in lupus and is now also initiating a 200 patient phase two study in ulcerative colitis. These add to the ongoing separate phase 1B studies in psoriasis and ectopic dermatitis.

The next study, where we expect phase III data is that first line renal cell carcinoma study.

We have completed enrollment in this study and based upon our original projections for the study design and modeling and T. J I a comparator arm.

We project that we could reach our first interim analysis on the primary endpoint of overall survival sometime in the first half of 'twenty and 'twenty consistent with our prior guidance.

Howard W. Robin: We enter 2021 with an exceptionally strong balance sheet with $1.2 billion in cash and no debt. And I'll now turn the call over to Jay Z, who will expand on our BEMPEG Nectar 262 and Nectar 255 programs.

Based upon the early data generated for been pegged plus Nemo and renal cell carcinoma.

And nectar are taking a comprehensive approach to the development and been tagged and this indication.

And as Howard stated earlier EMS also recently initiated a phase one slash two study and RCC, which combines <unk> plus <unk> and Teekay.

Jonathan Zalevsky: Thank you, Howard. Let me begin with a quick review of the BEMPEG data from the PivotO2 melanoma cohort presented at FISI. As Howard noted, we reached a median PFS of 30.9 months. The overall response rate was 53%, with 34% of patients achieving a complete response. Importantly, we have also observed a median depth of response of 78.5%. Our results are notable when you look at historical data from published literature for depth of response for single-agent NEBO and ipinebo, which were 35% and 52%, respectively.

And allows us to compare this treatment to a new low Teekay I regiment to pave the pathway for Teekay and inclusive regimen and RCC for the doublet as well.

With respect to the Registrational study in first line cisplatin eligible euro filial carcinoma.

Last summer we also reached our enrollment goal for this study.

The study is designed to serve as a basis for a potential accelerated approval filing.

As a reminder, the primary endpoints and the steady or are and duration of response and did.

And by Central Radiology review for about 100, and Ken sits and eligible urothelium carcinoma patients will have a combined PDL one positive baseline score at Cps score of 10 and lower.

The duration of response is a critically important endpoint and this patient population because this endpoint was the differentiating factor that led to accelerated approvals for single agent checkpoint inhibitors and the setting is.

Jonathan Zalevsky: As we have discussed before, an FDA meta-analysis of melanoma trials has shown the depth of response in target lesions highly correlates with improved PFS and OS. And indeed, with our median PFS of 30.9 months, we've observed a correlation very consistent with the FDA meta-analysis. However, we have not yet reached a median over

Compared to the gym side of being and Carboplatin and standard of care regimen.

And for this study we are looking to achieve a median follow up of 18 months to measure duration of response.

Brings the timeline for our first day and from this study in the middle of 2022.

We had two large phase III studies that build on our other work and European and <unk> carcinoma melanoma.

Jonathan Zalevsky: As Howard stated earlier, our landmark OS in two years was substantially better than historical rates reported for the current standards of care in this setting, NIDO as well as the PQ. The data reinforce our confidence as we advance our ongoing trials for BEMPEG, including our five ongoing registrational trials, and with the coming study in head and neck cancer, will soon be a total of six registrational studies. Now, let me start with an update on the first line of the Static Melanoma Study, which is being run by our partner, BMS.

First the muscle invasive bladder cancer study, which is being run by BMS is enrolling approximately 540 patients who build has he been pegged plus nemo or needle monotherapy.

Our 12 month treatment period following surgery.

As this study is large and we expect the first data readouts to be in 2024.

And this study is also designed to serve as a confirmatory studies and potential accelerated approval and assist ineligible urothelium carcinomas and.

Second for the adjuvant melanoma trial.

Initiated this important.

Additional phase III Registrational trial, and the third quarter of 2020 and the study is now actively enrolling.

The trial will enroll 950 patients within a 12 month treatment period post surgery and <unk>.

Jonathan Zalevsky: As a reminder, in 2019, we received a breakthrough therapy designation for BEMPEG plus NEVO based on the high complete response rate we observed in this setting. In the Phase 3 study, which compares the doublet to single-agent NEVO, we have three primary, overall response rates or a while: progression-Free Survival, or PFS, and Overall Survival, or OLAP.

And point of event free survival.

This study is designed to position and pack as a standard of care for the treatment and melanoma building on the recent needle approval and et cetera.

And the melanoma study increase and significantly the number of patients that can benefit from our agents.

Initial data from this study is expected in 2024 as well.

And as Howard stated earlier for propel.

Setting and non small cell lung cancer in combination with Pembroke, we've had great interest and the study from leading Boracic cancer treatment sites and as we said at Jpmorgan. This allowed us higher than expected enrollment and the last two months of 'twenty and 'twenty. Despite COVID-19 site challenges being faced by many companies running early stage.

Jonathan Zalevsky: The ORR endpoint was designed as a potential early submission opportunity for the BEMPEG plus NEVO combination, and the PFS endpoint is designed to support a potential full approval. As you know, BMS is running this study, and we currently expect that they could have initial data from this trial available sometime in the timeframe of late this year or the first part of 2022. PFS is an event-driven analysis, and a number of other factors, including the rate of PFS event accumulation, might impact this timing.

Studies.

We expect to report on the three PDL one expression subgroups from this study.

And 1%.

1% to 49% and greater than or equal to 50% and the second half of this year.

We anticipate having approximately 60 patients who have had two or more scan spread across these subgroups.

Jonathan Zalevsky: The original design of the study assumes a median PFS for the nivolumab arm to be comparable to the 6.7 mos observed in the CHECKMATE Mos 6-7 study. The next study, where we expect phase 3 data, is a first-line renal cell carcinoma study. We have completed enrollment in this study, and based upon our original projections for the study design and modeling of the TGI comparator arm, we project that we could reach our first interim analysis on the primary endpoint of overall survival sometime in the first half of 2022, consistent with our prior guidance.

Study is designed to show the benefit of the <unk> plus Pembroke doublet compared to historic low response rates achieved with single agent and Pembroke.

And non small cell lung cancer, we know that the quantity underlying inflammation and the tumor microenvironment.

The impact on the efficacy of single agent checkpoint inhibitors, such as timber.

And indeed, the clever scientist at Merck, New this very well.

And created the now commonplace diagnostic paradigm for defining non small cell lung cancer based on PD lone expression status and.

The basic stratification cause less and 1%, 1% to 49% and greater than or equal to 50% PD lone expression and the tumor biopsy essentially defines the scale of inflammation and the tumor microenvironment with patients and the greater than or equal to 50%, having the greatest amount.

Jonathan Zalevsky: Based upon the early data generated for BEMPEG plus NEVO and renal cell carcinoma, BMS and Nektar are taking a comprehensive approach to the development of BEMPEG in this indication. And as Howard stated earlier, BMS also recently initiated a Phase 1-2 study in RCC, which combines BEMPEC plus NEBO with a TKI and allows us to compare this treatment to a NEBO-TKI regimen, paving the pathway for a TKI-inclusive regimen in RCC for the doublet as well.

And consequently, we see the greatest benefit and its single agent <unk> and treating this patient subgroup.

The mechanism of Ben Pang is very powerful because it targets and increases the inflammatory state of the tumor microenvironment.

<unk> achieved this by promoting T cell infiltration and.

Priest expression of effector cytokines, including interferon gamma and its downstream genes as well as increasing expression that PD, one on lymphocytes and PD L. One on tumor tissue.

Jonathan Zalevsky: With respect to the registrational study in first-line cisplatin-eligible urophilial carcinoma, last summer, we also reached our enrollment goal for this study. The study is designed to serve as a basis for a potential accelerated approval pilot. As a reminder, the primary endpoints in the study are ORR and duration of response, determined by central radiology review for about 110 Swiss-eligible urethelial carcinoma patients who have a combined PD-L1 positive baseline score or a CPS score of 10 or lower.

We are very excited to add that and pegs, MLA pet and broth and non small cell lung cancer and believe that the synergies of the combined mechanisms could improve the efficacy of the doublet and multiple PDL one expression subgroups.

We also recently added a chemotherapy combo onto the propel study in order to allow us to potentially include and a phase III strategy, the doublet with chemo option.

The data from propel will allow us to design, a phase III strategy for <unk> and non small cell lung cancer and we are looking forward to presenting this data and the second half of 2020 months.

For our new Registrational phase two three trial and head and neck cancer. We are sponsoring this study and collaborate and Merck on the protocol.

Jonathan Zalevsky: The duration of response is a critically important endpoint in this patient population because this endpoint was the differentiating factor that led to accelerated approvals for single agent checkpoint inhibitors in the setting as compared to the gemcitabine and carboplatin standard of care regimen. For this study, we are looking to achieve a median follow-up of 18 months to measure duration of response. This brings the timeline for our first data from this study to the middle of 2022.

This will be a 500 patient study with overall survival as the primary endpoint.

And we plan to start the trial and the second half of this year.

As Howard stated earlier, that's ever charitable fund the study and they will also help nektar operationalize it.

The trial is designed to support and potential global registration for the <unk> plus <unk> doublet.

And includes an interim analysis and Omar or after the first 200 patient tire and wheel.

Or are passive and Prespecified futility boundary study will continue and the remaining 300 patients will be enrolled to the phase III portion of the study and all 500 patients evaluated for the primary endpoint of OS.

Jonathan Zalevsky: Thank you.

Jonathan Zalevsky: We have two large phase 3 studies that build on our other work in urothelial carcinoma and melanoma. First, the muscle-invasive bladder cancer study, which is being run by BMS, is enrolling approximately 540 patients who will receive BEMPEG plus NEVO or NEVO monotherapy for a 12-month treatment period following surgery. As this study is large, we expect the first data readouts to be in 2024.

We are very excited about the potential of this doublet to increase and deepen the response versus Pembina alone and this immune sensitive cancer.

It would be given the data we have seen combined <unk>, plus nemo and melanoma another immune sensitive cancer.

And historically IL, two has shown activity and head and neck cancer with several published studies and both the metastatic and pads and studying and we are very excited to develop and peg plus Pembroke here.

Additionally, the limited late stage studies going on and this frontline indications and so we see this as a unique opening for us to establish the <unk> backbone is the first line Iot mechanism and head and neck cancer.

Jonathan Zalevsky: This study is also designed to serve as a confirmatory study for a potential accelerated approval in this disineligible urothelial carcinoma study. Second, for the adjuvant melanoma trial, we initiated this important additional phase three registrational trial in the third quarter of 2020. And the study is now active. The trial will enroll 950 patients within a 12-month treatment period post-surgery and an endpoint of event-free survival. This study is designed to position BMPAC as a standard of care for the treatment of melanoma, building on the recent NEVO approval in the center. For melanoma, this study increases significantly the number of patients that can benefit from our agency. Initial data from this study is expected in 2024 as well, and it's Howard's.

And lastly, before I turn to Nektar $2.

And thank you to Sue I wanted to briefly touch on her study of them pack and adult patients with mild COVID-19 infection.

And we remain on track to report data from this study by the middle of this year.

And as a reminder, last November and we started this phase one b.

Study, which is a randomized double blind placebo controlled trial to evaluate safety tolerability in PK PD profile of single doses and been pegged give it to adult patients with mild COVID-19.

And this initial trial is enrolling up to 30 adult patients with a confirmed COVID-19 infection of mild symptomology and.

And we're finding this is oxygen saturation above 93% without supplemental oxygen and <unk>.

Jonathan Zalevsky: Earlier, for PROPEL, our study in non-small cell lung cancer in combination with PEMBRO, we've had great interest in the study from leading thoracic cancer treatment sites. And as we said at J.P. Morgan, this allowed us higher than expected enrollment in the last two months of 2020, despite COVID site challenges being faced by many companies running early stage studies.

Batori rate below 20, breaths per minute and a heart rate below 90 beats per minute.

Trial will have three cohorts of patients with a maximum of 10 patients in each cohort.

Patients are being randomized one to one to receive a single dose of <unk> or placebo.

Primary objective of this trial are to establish the tolerability of Ben and patients with mild COVID-19.

<unk>, the changes and immune activation and overtime and identify a recommended dose for the next study.

Jonathan Zalevsky: We expect to report on the three PD-L1 expressor subgroups from this study, less than 1%, 1 to 49%, and greater than or equal to 50%, in the second half of this year. We anticipate having approximately 60 patients who have had two or more scans spread across these subgroups. The study is designed to show the benefit of the BEMPEG plus PEMBRO doublet compared to historical response rates achieved with single-agent PEMBRO. In non-small cell lung cancer, we know that the quantity of underlying inflammation in the tumor microenvironment has a big impact on the efficacy of single agent checkpoint inhibitors such as PEMBRA.

And secondary endpoints were also tracking the need for supplemental oxygen and monitoring and clinical status on a 10 point ordinal scale for 30 days after that and Peggy administration.

With additional inclusion of Sars Covid, two serology and immune cell profiling over that time interval as well.

Following the successful completion of this initial phase one study our plan is to advance development of been pegged and to moderate COVID-19 patients combined with standard of care.

We are considering and approach combining <unk> with a single standard of care such as Red Desert here in comparison to standard of care alone.

We're hopeful that this unique approach that ultimately lead to a reduction and the severity and disease and increase recovery time as well as reduced hospitalization time for patients with moderate and COVID-19, who require hospitalization and have low lymphocyte counts.

Jonathan Zalevsky: And indeed, the clever scientists at Merck knew this very well and created the now commonplace diagnostic paradigm for defining non-small cell lung cancer based on PD-L1 expression status. The basic stratification of less than 1%, 1 to 49%, and greater than or equal to 50% PD-L1 expression in the tumor biopsy essentially defines the scale of inflammation in the tumor microenvironment, with patients and those with greater than or equal to 50% having the greatest amount.

This would come by and anti viral mechanism with a mechanism to promotes T cell responses, which we believe could help those patients in particular, who have an inability to non a proper T cell response to the virus on their own.

And moving on to Nektar 206 to our TMR agonist and <unk>.

Steady is ongoing with patients being treated and the recommended phase two dose in combination with <unk> <unk> plus needle.

The population here is relapsed refractory melanoma post checkpoint inhibitor therapy with about 20 patients per arm.

Jonathan Zalevsky: And consequently, we see the greatest benefit of single-agent PEMBRO in treating this patient subject. The mechanism of BEMPEG is very powerful because it targets and increases the inflammatory state of the tumor microenvironment. Ben Pegg achieved this by promoting T-cell infiltration, increased expression of effector cytokines, including interferon gamma and its downstream genes, as well as increased expression of PD-1 on lymphocytes and PD-L1 on tumor tissue.

<unk> has completed enrollment of these two cohorts and we look forward to presenting data from this study later this year.

Now turning connector to 55, our IL 15 agonist program and our next cytokine therapy and clinical development.

As Howard stated earlier, the IL 15 mechanism is well recognized that the scientific community as being a robust means for and engaging natural killer cell biology, and the treatment of cancer.

And we believe there is the potential for an agent like Nektar 255 that engages the full biology, and the IL 15 pathway to be combined with a range of mechanisms and different settings.

Our first clinical work focuses on Atms and see combinations and we've developed and clinical strategy to combine with leading agencies and both liquid and solid tumor settings.

Jonathan Zalevsky: We are very excited to add BEMPEG's MOA to that of PEMBRO, a non-small cell lung cancer, and believe that the synergy of the combined mechanisms could improve the efficacy of the doublet in multiple PD-L1 expression subgroups. We also recently added a chemotherapy combo to the PROPEL study in order to allow us to potentially include in our Phase 3 strategy the doublet with chemo. The data from Propel will allow us to design a phase three strategy for BEMPEG in non-small cell lung cancer, and we are looking forward to presenting this data in the second half of 2021.

First with our phase one two study and patients with relapsed refractory hematologic malignancies.

We reported data from the first set of patients treated with metric 255, and Citi 2020.

Thanks, Richard 55 was shown to be biologically active and demonstrated consistent expansion of lymphocytes with durable and sustained increases in NK and CDA T cells and this population of highly refractory patients with myeloma or non Hodgkin's lymphoma.

We found and metrics 55 expanded NK cell by fivefold and CDA T cells by threefold.

Moreover, proliferative capacity was maintained across multiple cycles of metric 255 and peaked around eight to 10 days on each cycle.

Jonathan Zalevsky: For our new Registrational Phase 2-3 Trial in Head and Neck Cancer, we are sponsoring the study and collaborating with Merck on the protocol. This will be a 500 patient study with overall survival as the primary end. We plan to start the trial in the second half of this year. As Howard stated earlier, FFJ will fund the study, and they will also help Nektar operationalize it. The trial is designed to support a potential global registration for BEMPAG plus PEMBRO.

We also share and case studies to very heavily pretreated patients with disease progression was held the day over multiple cycles of treatment with Mexican and 55%.

Of the two patients one had a metabolic response.

In addition, we observed evidence of CD 19 car T cell increases and one patient who was treated with Nektar 255, many weeks after car T therapy.

We were pleased to see that metric is 55 was well tolerated with low grade cytokine related aes that were transient and easily managed.

Jonathan Zalevsky: It includes an interim analysis of ORR after the first 200 patients are enrolled. If ORR passes the pre-specified futility boundary, the study will continue, and the remaining 300 patients will be enrolled in the phase 3 portion of the study, and all 500 patients will be evaluated for the primary endpoint of ORR. We are very excited about the potential of this goblet to increase and deepen the response versus Pember alone in this immune-sensitive cancer, especially given the data we have seen combining BEMPEG plus NEVO and melanoma.

And Nektar 255 exhibited a half life of approximately 30 hours and there was no evidence of drug accumulation on this every three week dose administration Regiment.

We expect to complete the dose escalation monotherapy portion of the study and the first part of 2021 with data to be presented later this year.

Once the dose escalation is complete we will expand into several arms with approximately 20 patients per arm.

First our and we'll evaluate metric 255 as a monotherapy at the recommended phase two dose for NHL patients that have previously progressed following CD 19 car T.

The second arm will evaluate metric to 55 and combination with Rituximab and third line and greater Follicular lymphoma, or low grade and in channel.

Jonathan Zalevsky: and Alma.

Jonathan Zalevsky: Another immune-sensitive cancer. Historically, IL-2 has shown activity at a nec..., with several published studies in both the metastatic and adjuvant settings. And we are very excited to develop Bentyte plus Pembroke.

And the third arm will evaluate net to 255 with ours electric bass pro and third line or greater multiple myeloma.

And we entered into a drug supply collaboration with Janssen late last year for the Darla likes bass pro supply for this study.

Jonathan Zalevsky: Additionally, there are limited late-stage studies going on in this front-line indication, and so we see this as a unique opening for us to establish the BEMPED backbone as the first-line IL-2 mechanism in head and neck cancer. And lastly, before I turn to Nectar 255 and Nectar 262, I want to briefly touch on our study of BEMPAG in adult patients with mild COVID-19 infection. We remain on track to report data from the study by the middle of this year.

The subcutaneous form of dogs and <unk> continues to take more share of the franchise since its approval in may of last year, and we are very pleased to be working with dance and to include <unk> bass Pro and our Nektar 255 study.

Our second phase one two study is evaluating metrics are 55 and combination with Cetuximab and two distinct groups of highly refractory late line patients with metastatic colorectal cancer or head and neck cancer.

We've already does patients and this study and plan to enroll 80 patients and the U S and Europe.

And you know Cetuximab has a very low response rate about 10, or 15% and new settings and so.

Jonathan Zalevsky: As a reminder, last November, we started this Phase 1B study, which is a randomized, double-blind, placebo-controlled trial to evaluate the safety, tolerability, and PKPD profile of single doses of BEMPEG given to adult patients with mild COVID-19. This initial trial is enrolling up to 30 adult patients with a confirmed COVID-19 infection who have mild symptoms. And we're defining this as oxygen saturation above 93% without supplemental oxygen, a respiratory rate below 20 breaths per minute, and a heart rate below 90 beats per minute.

So our goal is to improve upon that with the addition, with Nektar 285.

There is a high unmet need and this later line setting and then.

We are able to demonstrate a higher response rate we will have several potential paths forward with Nektar 255.

The trial and beginning with a dose finding portion for the combination, which will then be expanded into dedicated cohorts for colorectal cancer and head and neck cancer patients. We expect to have some initial data from the dose finding portion of this study later this year.

I will now turn the call over to Brian to review the metrics refi day program and more detail.

Thank you Chelsea.

As Howard said earlier, we are very pleased with the broadening scope and advancement of the net three five day program by our partner Ivan.

And really it's.

Following positive data and lupus patients last year really commenced a phase two study and Lucas and now is initiating a phase two study in ulcerative colitis as well as progressing with two separate phase <unk> studies in psoriasis and atopic dermatitis.

Jonathan Zalevsky: The trial will have three cohorts of patients with a maximum of 10 patients in each cohort. Patients are being randomized one-to-one to receive a single dose of BEMPEG or placebo. The primary objectives of this trial are to establish the tolerability of BMPAC in patients with mild COVID, evaluate the changes in immune activation over time, and identify a recommended dose for the next study. We are also tracking the need for supplemental oxygen and monitoring clinical status on a 10 point ordinal scale for 30 days after BUNPEG administration, with additional inclusion of SARS-CoV-2 serology and immune cell profiling over that time interval as well.

The rationale for a T regulatory cell or a T. Reg mechanism and the treatment of autoimmune diseases is compelling and based upon extensive evident to the world of E Mail text functioning imbalanced immune system and the underlying cause of the clinical manifestations and these diseases.

Any autoimmune and inflammatory disorders, including systemic lupus and ulcerative colitis are associated with decreased T. Reg numbers reduce T Reg function and a reduced production of IL two.

And after three five day, our goal is to address these T Reg abnormalities and to develop and IL two molecule that could selectively stimulate T regs and a more selective manner and NATO low dose IL two.

In November of last year at the net at the annual American College of Rheumatology meeting, we shared new data from our phase <unk> study evaluating nektar 358, and patients with mild to moderate lupus, we reported an improvement and lupus skin disease activity with Nektar three five day study enrolled patients with mild to moderate.

Jonathan Zalevsky: Following the successful completion of this initial Phase I-B study, our plan is to advance the development of BEMPEGs in moderate COVID-19 patients combined with standard of care. We are considering an approach combining Bemtag with a single standard of care, such as Remdesivir, in comparison to standard or parallel. We're hopeful that this unique approach could ultimately lead to a reduction in the severity of disease and increased recovery time, as well as reduced hospitalization time for patients with moderate COVID-19 who require hospitalization and have low lymphocytes.

And patients who only received three doses of Nektar three five day every two weeks. So it's not specifically designed to measure efficacy.

However, we were highly encouraged and and one of our exploratory endpoints Nektar three five day led to a dose dependent reduction and lupus skin disease activity measured by the class the activity score and the subset of 18 patients with a baseline score of greater than or equal to four.

Patients experienced an improvement and activity scores for patients and the placebo arm, so no decline and their scores.

Seven of the 18 patients had a poor and more point score reduction, particularly at the two highest doses administered in this study 12 micrograms and 24 microgram per kilogram and this was apparent by day 43 as compared with baseline.

Jonathan Zalevsky: This would combine an antiviral with a mechanism that promotes T cell responses, which we believe could help those patients in particular who have an inability to mount a proper T cell response to the virus on their own. Moving on to Nectar 262, our TLR agonist. The study is ongoing with patients being treated at the recommended phase Q-dose in combination with Benpeg or Benpeg plus Nevo. The population here is relapsed refractory melanoma, post-checkpoint inhibitor therapy with about 20 patients per arm. The study has completed enrollment in these two cohorts, and we look forward to presenting data for the study later this year.

To build on what I stated earlier, we know that there are considerable data and the literature to show that and patients with lupus and the number and function of circulating T. Regs, maybe decrease substantially during active disease.

Fortunately, we saw a dose dependent and profound increase and T regs and T. Reg subsets induced by Nektar three five day.

So we were pleased to see evidence of this mechanistic rationale and emerging with Nektar three five day treatment and the and the patients and our study.

These exciting data literally to initiate a phase II study and patients with moderate to severe lupus and.

And the phase two study and looked at 280 patients are being randomized to one of three doses of net.

And for three five day or placebo administered every two weeks for a treatment period of 24 weeks the primary endpoint and the phase II study is the percentage of patients achieving at least a four point reduction and your fleet I took here to pay scale secondary endpoints include the percentage of patients who achieve and.

Alright for response by lag they pick one response and a level of low disease activity as defined by the loop with low disease activity state or the L. L. D day, yes.

Jonathan Zalevsky: Now, Turning Connector 255, our IL-15 Agonist Program, and our next cytokine therapy in clinical development. As Howard stated earlier, the IL-15 mechanism is well recognized by the scientific community as being a robust means for engaging natural killer cell biology in the treatment of cancer. We believe there is the potential for an agent like Nektar-255 that engages the soul biology of the IL-15 pathway to be combined with a range of mechanisms in different settings. Our first clinical work focuses on ADCC combinations, and we've developed a clinical strategy to combine Nektar-255 with the leading ADC...

We will also characterized pharmacokinetics pharmacodynamics and the immunogenicity and treated patients.

And the endpoints will be measured at week 24, and we expect the study to be completed within 18 to 24 months.

Moving is also initiating this quarter.

His two randomized placebo controlled trial and patients with ulcerative colitis.

As in lupus there is considerable evidence and the literature of the role of T Regs and play inventory bowel disorders, such as ulcerative colitis reduced numbers and functionality approval T. Reg cells has been noted and these patients and there was also evident and an appropriate balance between functional T regs and T effector.

So and the intestinal microbiome and that contributes to import inventory and nations. So we are excited to pursue this additional inflammatory disorder with an extra three five day and expand this program.

With our partner Lilly.

Study will evaluate various dose levels during the initial induction period, using and adaptive designs total enrollment is planned to be 200 patients and the trial endpoint as the percentage of patients achieving clinical remission after induction treatment and at 12 weeks and.

Jonathan Zalevsky: first with our phase 1-2 study in patients with relapsed refractory and metallogic malignancy. We reported data from the first set of patients treated with Nektar 255 at CITI 2020. NETRA255 was shown to be biologically active and demonstrated consistent expansion of lymphocytes with durable and sustained increases in NK and CD8 T cells in this population of highly refractory patients with myeloma or non-Hodgkin's lymphoma. We found that Nektar C55 expanded NK cells by 5-fold and CDAP cells by 3-fold.

In addition, we know that Lilly is planning for additional phase III studies to be initiated within the next 12 to 18 months and as yet undisclosed immune and immune.

Immune mediated indications we are pleased with lilly's rapid advancement of the program and their desire to develop this age and broadly and inflammatory and autoimmune diseases.

And finally, we look forward to the potential presentations from the phase one day work ongoing and psoriasis and atopic dermatitis with Nektar three five day with data from at least one of these studies to be presented at a medical meeting and the next 12 to 18 months.

I will now turn the call over to Gil for a review of the financials.

Thank you, Brian and good afternoon, everyone.

This afternoon, we announced our full year financial results for 2020, and our earnings press release.

Jonathan Zalevsky: Moreover, proliferative capacity is maintained across multiple cycles of METRIC-255 and peak at around 8-10 days on each cycle. We also shared case studies of two very heavily pre-treated patients where disease progression was held at bay over multiple cycles of treatment with Nectar 255. In these two patients, one had a metabolic response. In addition, we observed evidence of CD19 CAR-T cell increases in one patient who was treated with Nektar 255 many weeks after CAR-T therapy.

On this call I will briefly recap our royalty monetization transaction completed at the end of 'twenty and 'twenty.

As well as review our annual financial guidance for 2021.

On December 32020, we further fortified our balance sheet through $150 million royalty monetization with healthcare royalty partners.

The royalty interest involved and this transaction where from our license agreement with Astrazeneca for <unk> and the license agreements for a pegylated factor eight portfolio, which primarily relate to royalties from Takeda for innovate.

And important feature of this transaction is that after pre specified cash on cap return caps or reach.

Jonathan Zalevsky: We were pleased to see that NET-355 was well-tolerated with low-grade cytokine-related ADs that were transient and easily manageable, and Nectar 255 exhibited a half-life of approximately 30 hours, and there was no evidence of drug accumulation on this every three-week dose administration regimen. We expect to complete the dose escalation monotherapy portion of the study in the first part of 2021, with data to Once the dose escalation is complete, we will expand into several arms with approximately 20 patients per arm.

The residual royalties will revert back to nectar.

As a result of the 150 million and proceeds we received from this royalty monetization and the repayment of our $250 million and senior notes earlier in the year.

We enter 2020, and a strong financial position, including $1 2 billion of cash and investments and no debt.

Now turning to our 'twenty and 'twenty one guidance, we expect to end 2021, with approximately $750 million and cash and investments.

After taking into account the repayment of the $250 million and senior debt and 2020, the completion of our royalty monetization in 2020, and the $50 million and milestones received from BMS and 2020 with the start of the N B C and adjuvant melanoma Registrational studies, our cash use.

Jonathan Zalevsky: The first arm will evaluate Nektar-255 as a monotherapy at the recommended phase 2 dose for NHL patients that have previously progressed following CD19 CAR-T. The second arm will evaluate Nektar 255 in combination with rituximab in third-line or greater follicular lymphoma, or low-grade NHL. And the third arm will evaluate Nectar Q55 with Darzalex FastPro in third minor grader multiple myelin. We entered into a drug supply collaboration with NAMS late last year for the Dargol X-Fast Pro supply for this study.

And 2021 is relatively consistent on a year over year basis, primarily as a result of the phase III studies for Ben Peg, achieving much higher levels of patient enrollment as well as the ramp up of our clinical development work for Nektar to five five.

Before I go over our annual financial guidance for this year.

Wanted to briefly review, how we anticipate accounting for the co development and funding arrangements, we announced last week with S. F. J pharmaceuticals, together with its financial backers, Blackstone life Sciences, and Abbvie and work and the clinical trial and supplier collaboration agreement with Merck.

Jonathan Zalevsky: The subcutaneous form of Darzalex continues to take a larger share of the franchise since its approval in May of last year, and we are very pleased to be working with Janssen to include Darzalex Fast Pro in our Nectar 255 study. Our second Phase 1-2 study is evaluating NETRA-255 in combination with tucuximab in two distinct groups of highly refractory late-line patients with metastatic colorectal cancer or who had a NETRA. We've already dosed patients in this study and plan to enroll 80 patients in the U.S. and Europe.

These collaborations are enabling to start this year of a new phase two and three registrational study of them Peg, plus timberlands and map and patients with head and neck cancer.

Under the terms of these agreements and stuff.

And Jay is committed to operationalize and fund $150 million to support the Registrational study and.

And Merck will contribute pember wisdom and free of charge.

S F J would be entitled to the success payments only on FDA approval and have been paid and first line metastatic melanoma.

Jonathan Zalevsky: As you know, cituximab has a very low response rate, about 10 or 15% in these settings. And so our goal is to improve upon that with the addition of NETCO 235. There is a high unmet need in this later stage setting. And if we are able to demonstrate a higher response rate, we will have several potential paths forward with Nektar 255. The trial is beginning with a dose-finding portion for the combination, which will then be expanded into dedicated cohorts for colorectal cancer and adenetic cancer patients. We expect to have some initial data from the dose finding portion of the study later this year. I will now turn the call over to Brian to discuss the Nectar 358 program in more detail.

Head and neck cancer or one other been pig indication.

As S F J funds, the head and neck cancer study. We will include those amounts and our R&D expense and as part of a derivative liability that I will describe in a moment, but this will be a non cash expense is actually up.

And as funding that portion of our R&D expense.

We anticipate accounting for the contingent success based payments and stuff Jay as a derivative liability.

Over time, we will assess the probability of S. S J.

And the success payments and recognize the expense on our income statement with a corresponding increase to the derivative liability based on a probability adjusted and weighted discounted cash flow model that we will examine on a quarterly basis.

Brian Kotson: Thank you, Jay-Z. As Howard said earlier, we are very pleased with the broadening scope and advancement of the Nektar 358 program by our partner, Eli Lilly. Following positive data in lupus patients last year, Lilly commenced a phase two study in lupus and now is initiating a phase two study in ulcerative colitis, as well as progressing the two separate phase 1B studies in psoriasis and atopic dermatitis. The rationale for a T-Regulatory Cell or T-Reg Mechanism in the Treatment of Autoimmune Disease

We are very pleased with the significant support from Merck that substantially reduce the total cost for the head and neck study and the risk reward financing structure with S. F. J that enabled us to add another very large indication opportunity to the <unk> portfolio.

Our 2021 R&D investment will further advance our deep pipeline and clinical development strategy, we and our.

Partners are now funding six Registrational studies for been pegged, including the recently announced head and neck study.

We have four studies running with Lilly for nectar 358, and two broad phase one two studies for Nektar 255, and both hematologic and solid tumor settings.

Brian Kotson: is compelling and based upon extensive evidence of the role of a malfunctioning, imbalanced immune system as the underlying cause of the clinical manifestations in these diseases. Many autoimmune and inflammatory disorders, including systemic lupus and ulcerative colitis, are associated with decreased Treg numbers, reduced Treg function, and or reduced production of IL-2. With Nektar 358 and other IL-2-like molecules, our goal is to address these Treg abnormalities and to develop an IL-2-like molecule that could selectively stimulate Tregs in a more selective manner than native low-dose IL.

Additionally, we will also continue our early research efforts to enable new programs to add to our pipeline through planned IND filings in 2022.

Finally in addition to these important R&D programs, we will continue our stage appropriate commercial readiness activities with a focus on distribution capability market access preparation.

And other necessary activities that would enable launch of them pegged as early as the end of 2022.

Now moving onto our GAAP annual financial guidance.

Our full year 'twenty and 'twenty, one GAAP revenue guidance is approximately 100 million, including $15 million to $20 million of product sales and $80 million to $85 million of noncash royalty revenue from the 2012 and 2020 royalty monetization transactions.

Brian Kotson: In November of last year, at the annual American College of Rheumatology meeting, we shared new data from our Phase 1B study evaluating Nectar 358 in patients with mild to moderate lupus. We reported on improvement in lupus skin disease activity with Nectar 358. The study enrolled patients with mild to moderate lupus, and patients only received three doses of Nektar 358 every two weeks. Thus, it was not specifically designed to measure efficacy.

We anticipate 2021, GAAP R&D expense will range between 450, and 500 million, which.

Which includes approximately 55 million of noncash depreciation and stock compensation expense and approximately $30 million of noncash development expenses for the <unk> head and neck study.

G&A expense for 2021 is projected to be between 120 and $125 million, which includes approximately 45 million of noncash depreciation and stock compensation expense.

Brian Kotson: However, we were highly encouraged that in one of our exploratory endpoints, Nektar 358 led to a dose-dependent reduction in lupus skin disease activity measured by the CLASI activity score in a subset of 18 patients with a baseline score greater than or equal to 4, patients experienced an improvement in activity scores while patients in the placebo arm saw no decline in their scores. Seven of the 18 patients had a four or more point score reduction, particularly at the two highest doses administered in the study, 12 micrograms and 24 micrograms per kilogram. And this was apparent by day 43 as compared with baseline.

Noncash interest expense is expected to be between 50 and $60 million related to the monetization of our royalty streams.

Additionally, we expect to record a quarterly non cash charge with a total of approximately $15 million for the full year related to the derivative liability associated with our funding arrangement with S. F. J for the Banpais head and neck study.

And with that we will now 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 key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key and then the interest of time, we do ask that you. Please limit yourself to one question at this time.

Brian Kotson: To build on what I stated earlier, we know that there are considerable data in the literature to show that in patients with lupus, the number and function of circulating Tregs may be decreased substantially during active disease. Importantly, we saw a dose-dependent and profound increase in Tregs and Treg subsets induced by Nektar 358. So we were pleased to see evidence of this mechanistic rationale emerging from Nectar 3,5-A treatment in the patients in our study.

And our first question comes from Peter Lawson from Barclays. Your line is open.

Hey, thanks, so much.

I guess on the.

Propel studies it seems as if that was delayed just wondering if you could kind of talk through that whether it's kind of good news delayed or just.

And abundance of caution.

Yeah, I think Peter I'm going to ask Joe to answer that JV could you.

Update and what we said earlier this year and January.

Yeah, sure thing and Hey, Peter Thanks for the question. So one of the good things that happened and that study is.

And as Covid kind of add and Europe, we saw very cash rate of enrollment from European sites.

Brian Kotson: These exciting data led Lilly to initiate a Phase II study in patients with moderate to severe lupus. In the Phase 2 study in lupus, 280 patients are being randomized to one of three doses of Nectar 358 or placebo administered every two weeks for a treatment period of 24 weeks. The primary endpoint in the Phase 2 study is the percentage of patients achieving at least a 4-point reduction in the 3-by-2K scale. Secondary endpoints include the percentage of patients who achieve SRI-4 response, bilag-based BCCLA response, and a level of low disease activity as defined by the Lupus Low Disease Activity State, or the LLDAS.

And what that did is over the last two months of 'twenty and 'twenty and we saw very very rapid patient accrual.

And we enrolled approximately 60 patients into that trial.

And so the situation and then about the patient population in the study, but they've only and roles within the last couple of months and so our intention is to provide the most robust rich dataset and we can and so given the number of patient set and the world and it's very important to patients.

And in this study for a long enough period of time to allow for the duration of follow up and treatment duration to extend and then for US when we report data and we wanted to report a minimum of two scans for all of the patients and we've enrolled into the study.

Brian Kotson: We will also characterize pharmacokinetics, pharmacodynamics, and immunogenicity in treated patients. The endpoints will be measured at week 24, and we expect the study to be completed within 18 to 24 months. Lily is also initiating this quarter a Phase II randomized placebo-controlled trial in patients with ulcerative colitis. As in lupus, there is considerable evidence in the literature of the role of Tregs in inflammatory bowel disorders such as ulcerative colitis, and reduced numbers and functionality of peripheral Treg cells, as denoted in these patients.

The reason why we targeted at the second half of the year was really to provide the most comprehensive and complete and mature data set and we can add.

And in terms of the kinds of information that we would be targeting.

Provide later this year.

As you know the study has patient split across the different PD lone expression subgroups and the rest of 1%, 1% to 49 and greater than 50, and so we'd be looking to report that the response rates as well as the proportion of patients with a deep response, including Crs.

The duration of response any available accumulation.

Brian Kotson: And there is also evidence that an inappropriate balance between functional Tregs and T-affector cells in the intestinal microenvironment contributes to inflammatory lesions. So we are excited to pursue this additional inflammatory disorder with Nektar 358 and expand this program with our partner Lilly. The study will evaluate various dose levels during the initial induction period using an adaptive design.

Of data not just the whole IRR, but any longer term follow up data that's available as well as well as the safety profile and additional translational biomarkers and we are.

And looking forward to presenting data later this year.

Yeah.

Thank you.

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

Oh, Hey, congrats on the collaboration with Merck for the combination study and.

Squamous cell carcinoma of the head and neck.

Brian Kotson: Total enrollment is planned to be 200 patients, and the trial endpoint is the percentage of patients achieving clinical remission after induction treatment at 12 weeks. In addition, we know that Lilly is planning for additional phase two studies to be initiated within the next 12 to 18 months in as yet undisclosed immune-mediated education. We are pleased with Lilly's rapid advancement of the program and their desire to develop this agent broadly in inflammatory and autoimmune diseases.

I was wondering if you could comment on the role of HPV and that disease studying setting and whether you expect to see different levels and response to bank and peg and.

Patients who are HPV positive versus negative and also maybe if you could talk about how <unk> been pegged and differentiate from IL 15 and that setting. Thank you.

J P could you take that huh.

Sure Yeah. Thanks for the question very insightful question.

And so one of the interesting things about this tumor type and as you've looked at the presentation of the disease and with time.

Brian Kotson: Finally, we look forward to potential presentations from the Phase 1b work ongoing in psoriasis and atopic dermatitis with Nektar 358, with data from at least one of these studies to be presented at a medical meeting in the next 12 to 18 months. I will now turn the call over to Gil for a review of the financials.

It's kind of changed right and so there was a time and enjoy your patients were smokers and.

And you saw this year associated with lifestyle.

And then the last one and two decades were seeing a much greater and increase Ah patients with HPV involvement and many of them younger and.

And non made the necessary and the smokers, but they present.

Gil Laboucherie: Thank you, Brian, and good afternoon everyone. This afternoon, we announced our full-year financial results for 2020 in our earnings press release. On this call, I will briefly recap our royalty monetization transaction completed at the end of 2020, as well as review our annual financial guidance for 2021. On December 30, 2020, we further fortified our balance sheet through $150 million in royalty monetization with healthcare royalty partners. The royalty interests involved in this transaction are from our license agreement with AstraZeneca for Movantic and the license agreements for our Pegalated Factor VIII portfolio, which primarily relate to royalties from Takeda for Adenovate. An important feature of this transaction is that after pre-specified cash-on-cap return caps are reached, the residual royalties revert back to Nektar.

The disease anyway, so HPV status right at and important via driver and.

And it seemed important you know.

And a component of the patient population.

Population and the study so those patients are definitely included and then in terms of their presentation of disease. There are some differences.

Really.

And really smart and cue in on that and so so we know that this is already and you and sensitive tumor types and we know that there and it's pretty high mutational burden and these patients.

And what you find in HBV patients that they have additional viral antigens right and so you actually have the potential and then even greater China. The T cell response for patients that have HPV positive tumors and that certainly was in our thought process with the <unk> mechanism of action with the claim and T cell.

Timing that it induces knowing that the HPV positive patients and they will have even more.

Tumor associated and damaging that you can price T south against so that's definitely something we're thinking a lot about.

And then and we're <unk>.

<unk> been tagged and.

And its tumor indication.

Uh huh.

Gil Laboucherie: As a result of the $150 million in proceeds we received from this royalty monetization and the repayment of our $250 million in senior notes earlier in the year, we ended 2020 in a strong financial position, including $1.2 billion of cash and investments and no debt. Now, turning to our 2021 guidance.

It's a combination with a checkpoint inhibitor.

And with TD buys and Pembroke.

We think thats at much more of that and tag guided mechanism than per se for $2 55, and what do you think defied right. We're considering other indications even though we're also using head and neck and the study where we're combining with Cetuximab and there were targeting the second line or later and we're carrying and refresh.

Gil Laboucherie: We expect to end 2021 with approximately $750 million in cash and investment. After taking into account the repayment of the $250 million in senior debt in 2020, the completion of our royalty monetization in 2020, and the $50 million in milestones received from BMS in 2020 with the start of the MIBC and adjuvant melanoma registrational studies, our cash usage in 2021 is relatively consistent on a year-over-year basis, primarily as a result of the phase three studies for BEMPEG, achieving much higher levels of patient enrollment, as well as the ramp up of our clinical development work for Nektar 255.

<unk> population and the mechanism.

$2 55, and I would say is really to potentiate the ADC sea component of tumor targeting associated with Cetuximab and so they're kind of two different.

Mechanisms.

And tended to have two different kinds of combination because of the different combination partners and then also of course the different line of therapy.

Thank you for the question.

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

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

And did Merck see any and propel lung data that you're generating with temporary and the context of the tox and head and neck and neck.

And can you remind us and depend on monotherapy benchmarks for each of the PDL, one expression levels and propel.

Howard I'll take us give and take the first part of that one and Tuesday, if you could take the second.

Gil Laboucherie: Before I go over our annual financial guidance for this year, I wanted to briefly review how we anticipate accounting for the co-development and funding arrangements we announced last week with SFJ Pharmaceuticals, together with its financial backers Blackstone Life Sciences and Abingworth, and the Clinical Trial and Supply Collaboration Agreement with Merck. These collaborations are enabling the start this year of a new Phase II-III Registrational Study of BEMPEG plus Pembrolizumab. Under the terms of these agreements, SFJ is committed to operationalize and fund $150 million to support the registrational study, and Merck will contribute Pemberlizumab free of charge.

Yes, Hi yesterday.

Look Merck Merck certainly spent a lot of time vetting.

And then back before they entered into Uh huh.

And the significant collaboration I mean, remember there theyre going to be providing.

Providing drug for 500 patient study and what you can't be precise on the number of vials or the or the exact amount that's somewhere between somewhere between if you ballpark that $50 million to $70 million worth of drug.

So they clearly have have vetted been pegged very well and I think they strongly.

Believe and the mechanism I can't say I can't tell you that day.

They looked at the lung data, we haven't disclosed that yet so.

I think you'll have to just assume that they've looked at everything they can look at.

Gil Laboucherie: SFJ would be entitled to success payment only on FDA approval of BEMPEG in first-line metastatic melanoma, head and neck cancer, or one other BenPeg indication. As SFJ funds the head and neck cancer study, we will include those amounts in our R&D expense and as part of a derivative liability that I will describe in a moment, but this will be a non-cash expense as SFJ is funding that portion of our R&D expense.

And so do you want to talk about the benchmark.

I don't think and brownfield work.

Yeah, so they're taken from various keynote studies just so.

In the early keynote one study there was a little bit of data for single agent and Pembroke and the PDL less than one and.

And there they saw about a 7% to 8%.

Response rates for single agent Pembroke and the setting and of course, you know Pembroke combined with chemo and non setting right because that's what they studied for a single agent and Pembroke.

Gil Laboucherie: We anticipate accounting for the contingent success-based payments to SFJA as a derivative liability. Over time, we will assess the probability of SFJ earning the success payments and recognize the expense on our income statement with a corresponding increase in the derivative liability, based on a probability-adjusted and weighted discounted cash flow model that we will examine on a quarterly basis.

And to 8%.

The 1% to 49, there's data from keynote and 42 net.

It showed about a 17% response rate for single agent Pembroke.

And then for the greater than or equal to 50%.

[laughter] subgroups.

Gil Laboucherie: We are very pleased with the significant support from Merck that substantially reduced the total cost for the head and neck study and the risk-reward financing structure with SFJ that enabled us to add another very large indication opportunity to the BEMPEG portfolio. Our 2021 R&D investment will further advance our deep pipeline and clinical development strategy. We and our partners are now funding six registrational studies for BEMPEG, including the recently announced head and neck studies. We have four studies running with Lilly for Nektar 358 and two broad phase one, two studies for Nektar 255 in both hematologic and solid tumor studies.

And Theres, both data from keynote <unk> four and data from keynote <unk> two.

And then and the 40% to 45%.

Range for <unk>.

And those are the kind of.

Bars, or you know metrics benchmarks that we're using.

To compare the propel data against the single agent combo data and each of the different PD L. One receptors.

Yeah.

Thank you our net.

Next question comes from Paul Choi from Goldman Sachs. Your line is now open.

Thank you for taking our questions and congratulations on all the progress and 2020.

I wanted to maybe turn back to your collaboration with Merck and head and neck, and specifically with regard to your identification of frontline patients.

The market data currently shows that.

PD, one therapies and excess of 50% already and the frontline setting. So I was wondering if you could maybe first comment on how you think about the recruitment and timeline for your phase II and phase III and then versus the monotherapy arm that you'll include in the trial huh.

Gil Laboucherie: Additionally, we will also continue our early research efforts to enable new programs to add to our pipeline through planned IND filings in 2022. Finally, in addition to these important R&D programs, we will continue our stage-appropriate commercial readiness activities with a focus on distribution capability, market access preparation, and other necessary activities that would enable a launch of BEMPEG as early as the end of 2022. Now moving on to our GAP Annual Financial Guide.

Do you think about what sort of margins you would look.

I look forward and and your interim futility analysis. Thank you very much.

And.

Thanks, Paul gave me and I'll ask you to comment a little bit of the and plan.

Plan for enrollment.

Sure Yeah, so Paul so roughly 80% to 85%.

And of patients with head and neck cancer actually have PDL, one positive and you still have a combined Cps score and then they go to one so it did very immune sensitive and it's a tumor type that already has a pretty high baseline of positivity and then what we found from earlier books.

Gil Laboucherie: Our full year 2021 GAAP revenue guidance is approximately $100 million, including 15 to 20 million in product sales and 80 to 85 million of non-cash royalty revenue from the 2012 and 2020 royalty monetization transactions. We anticipate 2021 GAAP R&D expense will range between $450 and $500 million, which includes approximately $55 million of non-cash depreciation and stock compensation expense and approximately $30 million of non-cash development expenses for the BEMPEG head and neck study.

Keynote studies is that the distributions.

<unk> net.

And the two categories and are accused one one and 19 and greater than 20.

Cps breakdown that was about 50 50 and now patient population.

So there's a pretty high.

Hi, proportionate patients that basically qualify and almost all of that and we'll be well how the Cps score for inclusion into the study. So we think there's a really good opportunity to enroll this trial pretty quickly because in addition every patient will get added to standard of care Penn Brown or.

And the experimental arm, which is Pembroke plus the impact so it's the standard of care plus and <unk>.

And that could provide synergy.

This is a very nice.

Option for patients.

Gil Laboucherie: G&A expense for 2021 is projected to be between $120 and $125 million, which includes approximately $45 million of non-cash depreciation and stock compensation expenses. Non-cash interest expense is expected to be between $50 and $60 million related to the monetization of our royalty stream. Additionally, we expect to record a quarterly non-cash charge of approximately $15 million for the full year related to the derivative liability associated with our funding arrangement with SFJ for the BEMPEG Head Index.

And it's a very nice option for physicians right, because the opportunity to put a patient and onto a trial, where they're gonna get standard of care or standard of care plus I mean, that's just a very favorable setting. So we expect this trial could enroll.

You know quite quickly.

And then you know I'm I'm, sorry, I missed the second part of your question do you mind repeating and Paul.

Okay.

And what margin you would look for in terms of your interim or futility analysis. Thank you very much huh.

Oh, yeah, Okay. Thank you, sorry, sorry, and with that so yeah. So we have a prespecified futility.

And it's one 200 patients would be enrolled and all.

And for a short amount of time and looked at by <unk>.

We haven't given the kind of guidance on what the utility margin is but its something that August and part of the study design.

Gil Laboucherie: And with that, we will now 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 key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. And in the interest of time, we do ask that you please limit yourselves to one question at this time. And our first question comes from Peter Lawson from Barclays. Your line is open.

And it's something we discuss with health authorities and something we discuss with Merck as well and then it's.

And obviously, a part of the statistical analysis plan and tried to study.

Thanks for the questions.

Thank you. Our next question comes from the FAA Yang from Mizuho Securities. Your line is open.

Hi, good afternoon, and thanks for taking my question. So my question is really around the CMC or 358, do you expect and making 358 to be as complicated as battery pack and a couple of years back.

Thank you.

Thanks, Suzanne and Jayson and I'm gonna have to talk a little bit about this.

Sure thing Uh Huh.

Thank you for the question.

Operator: Thanks so much. I guess on the Propel study, that seems as if that was delayed. What if you kind of talk through that, whether that's kind of good news delayed or just... and Abundance, of course. Yeah, Peter. I'm going to ask Jay-Z to answer that. Jay-Z, could you update on what we said earlier this year in January? Thanks.

So to the 358 molecule is quite different.

And the band pegged molecule and so on the one and it is also and they're looking to right. So in terms of the kind of presentation and that's all the same.

And the peg is completely different.

You've heard GAAP, though you know that the peg is released the bull and bear impact, whereas the peg is stable.

Stable linkage and $3 58, and you also know I've been pegged as a prodrug, whereas three Friday and again differs in that regard, it's and immediately active molecule. So it's quite different.

Jonathan Zalevsky: Yes, sure thing. And hey, Peter, thanks for the question. So one of the good things that happened in that study is that as COVID kind of ebbed in Europe, we saw a very fast rate of enrollment from the European sites.

And it's under a totally different set of controls.

Jonathan Zalevsky: Over the last two months of 2020, we saw very, very rapid patient accrual, and we enrolled approximately 60 patients into that trial. And so the situation now is that the patient population is in the study, but they've only been enrolled within the last couple of months.

And then in process as well and totally different set.

Specifications for release.

And I also think it's important to mention that.

The nature of the agreement and we had was we have with Eli Lilly.

Nektar was responsible for executing phase one.

Jonathan Zalevsky: And so, given the number of patients that have enrolled, it's very important that patients are in the study for a long enough period of time to allow for their duration of follow-up and the treatment duration to be extended. And then, for us, when we report data, we want to report a minimum of two scans for all of the patients that we've enrolled in the study.

And also we were responsible for a manufacturer.

Through the early part of <unk>.

And it's too but.

But after that Lilly assumed control of the entire program and.

So in fact literally is now responsible and executed not only on the clinical studies, but also on the manufacture of Metro 358, and there of course scaling it and moving it into commercial manufacturing.

And I understood Howard I would just I would just add one more thing to that.

Jonathan Zalevsky: So, the reason why we targeted the second half of the year was really to provide the most comprehensive, complete, and mature data set that we could. And in terms of the kinds of information that we'd be targeting, you know, to provide later this year, as you know, the study has patients split across the different PD-L1 expression subgroups, the less than one percent, the one to 49, and the greater than or equal to 50.

If you look back at them pegged manufacturing issue, which of course, you were alluding to and I'll.

Remind you that that was one bad lot of intermediate that Unfortunately got its way into two production lots for clinical studies.

Those were bad locks that were made in 2016. So the problem has been resolved and as long behind us I understand that is it has shown up.

And and and a terrible way, but the vs. The manufacturing problems were associated with a bad lot of intermediate there. There are no ongoing manufacturing problems or issues with anything that we make at Nektar just wanted to make that clear.

Jonathan Zalevsky: And so, we'd be looking for reports of response as well as the proportion of patients with a deep response, including CR, the duration of response, any available accumulation of data, not just the ORR but any longer-term follow-up data that's available as well, as well as the safety profile and additional translational biomarkers. And we're looking forward to presenting that later this year.

Thank you.

Our next question comes from Andrew <unk> from William Blair. Your line is open.

Oh, great. Thanks for taking my question, So hi, Casey I think.

And you revise that kind of the melanoma study.

And kind of talked about.

And of the immune profile.

So just wondering so for the five patients who had 100% tumor size reduction, but did not qualify for CR and.

In terms of their durability and PFS do they look more like a CR or like a like a typical.

Jonathan Zalevsky: We're looking forward to presenting that later this year. Thank you. Our next question comes from Jay Olson from Oppenheimer. Your line is open.

PR.

And.

And I heard this from other investigators.

Operator: Oh, hey, congrats on the collaboration with Merck for the combination study and... Squamous cell carcinoma of the head and neck. I was wondering if you could comment on the role of HPV in that disease setting and whether you expect to see different levels of response to Benpeg in patients who are HPV positive.

Curious if fever, he's like and early proxy for response based on.

All of the <unk> trial that Youll see.

Yeah, Hey, Andy Thank you for the questions.

So let me take them and in two parts.

So the first thing that we've noted.

And the melanoma data.

We reported a 50 is a very long PFS right 39 months.

Jonathan Zalevsky: versus negative, and also, maybe if you could talk about how.

And actually when you look at some of that distribution for patients that had very very deep responses.

Jonathan Zalevsky: how BEMPEG may differentiate from...

Jonathan Zalevsky: L-15 in that setting.

Jonathan Zalevsky: Thank you.

Jonathan Zalevsky: JV, could you take that?

Jonathan Zalevsky: Sure. Yeah, thanks for the question. A very insightful question.

Either 100% target lesion clearance or the T r's.

Jonathan Zalevsky: So, one of the interesting things about, you know, this tumor type is that as you've looked at the presentation of the disease over time, it's kind of changed, right? And so, there was a time when the majority of patients were smokers, and you saw this, you know, associated with lifestyle, but probably within the last one or two decades, we're seeing a much greater increase in patients with HPV involvement, many of them younger, and not maybe necessarily smokers, but they present, you know, with the disease anyway. So, HPV status, right, is an important viral driver, and it's an important, you know, component of the patient population in the study. So,

And they really stratified like the F D. A meta analysis indicated.

Very very high durability, very long disease control right and in fact for those patients that had those kind of depth of response right. We've not seen relapse at all so they very much.

Yeah.

And that our data and it's like a page out of the meta analysis.

And the depth of response really really has a very profound effect on both PFS and OS and when you stratify those kind of curve that's exactly what you see.

Now to your second question you know you you raised a very interesting comment and <unk>.

And all the way back to Steve Rosenberg Studies high dose IL, two and the 1980 people have been looking so closely or kind of correlates of immune activation.

Jonathan Zalevsky: Those patients are definitely included. However, in terms of their presentation of the disease, there are some differences.

Jonathan Zalevsky: And so you actually have the potential for an even greater kind of T-cell response for patients that have HPV-positive tumors. And that certainly was, you know, in our thought process with the VEMPEG mechanism of action with the kind of T-cell priming that it induces, knowing that HPV-positive tumors are not going to be able to be treated. And so, you know, there's a lot of potential there. So, I think that's a really good point. Thank you. Thank you.

Whether they are eased.

Whether they're you know cell types and others to see if those kind of aes or cytokines related.

Activities that you can measure throughout with clinical manifestation are associated with that and no there isn't really like convincing.

Locations, but people have.

Looked at things like pruritus statements like the cytokine hitch and the cytokines skin reactions that you can see they've looked at his Senate Bill right as we know they can be induced.

Jonathan Zalevsky: Thank you, patients; they'll have even more, you know, tumor-associated damage that you can prime T-cells against. So that's definitely something we're thinking a lot about. And then, you know, we're focusing on BEMPEG in this tumor indication. And you know, that's in combination with a checkpoint inhibitor, right, with PDY and PEMBRO. We really think that's much more of a BEMTAG-guided mechanism than per se for 255. And with 255, right, we're considering other indications, even though we're also using head and neck.

And by the IL two pathway.

And I do have to say that we don't have like Uh huh.

And clear trend and our data sets and we can point to but the empirical observations that you have made clinically which is like what the investigators and you're speaking to are indicating their their empirically kind of consistent with that the patients that have.

Very pronounced cytokines related to eat which can manifest like flu like symptoms right. They can manifest like fever, they can manifest like different kind of rashes.

And there maybe some trends that link those kind of Howard manifestations.

Jonathan Zalevsky: In the study where we're combining with cituximab, there we're targeting the second line, or later, we're targeting the refractory population. And the mechanism of 255 in that setting is really to potentiate the ADCC component of tumor targeting associated with cituximab. So they're kind of two different mechanisms intended to have two different kinds of combinations because of the different combination partners and then also, of course, the different lines. Thank you for the questions. Thank you.

Nothing that jumps out at you statistically you know they are the kinds of trends that particularly really good clinicians that really you know treat their patients as well and really do great diagnoses and do really great bedside.

Patient interactions they can spot, but statistically it's a lot harder to make those kind of influences.

And the things that we were really excited about if you remember from our Citi presentation, We did fine and our dataset to on treatment early detection biomarkers that seem to really correlate with patients that eventually went onto respond and we've reported those and same hobbies presentation.

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

So remember I talked about eosinophilic increases seen in patients after been pegged very early on right and the first cycle.

Operator: Thanks for taking my question. Did Merck see any of the Propel lung data that you're generating with Pembro in the context of the talks about the head and neck study? And can you remind us of the Pembro monotherapy benchmarks for each of the PD-L1 expression levels in Propel? Howard, I'll ask you to take the first part of that one and, uh, Jay-Z, if you could take

Which you know occur like weeks before the first scan.

And those could be a potential predictive biomarker for patients that ultimately go on to respond and the other biomarker that I think cause EBIT more convincing to me was the single cells cytokine data, which showed that and CDA T cells Polyfunctional strength index.

Howard W. Robin: Yes, hi.

Howard W. Robin: Look, Merck certainly spent a lot of time vetting Benpeg before they entered into this significant collaboration. I mean, remember, they're going to be providing the drug for a 500-patient study, and while you can't be precise on the number of vials or the exact amount, that's somewhere between, if you ballpark it, $50 million to $70 million worth of drug. So they clearly have vetted Benpeg very well, and I think they strongly believe in the mechanism. But I can't say, I can't tell you that they've looked at the lung data. We haven't disclosed that yet, so I think you'll have to just assume that they've looked.

It was really dramatically elevated.

Just a week after the first pad treatment and patients that ultimately went on to respond and even have a first scan.

Positive tumor shrinkage and so those were two additional biomarkers and we show that were really interesting and.

Especially in the case and single cell cytokines quite novel.

And the kind of information that was very prognostic and potentially predicting.

Early responses.

Thanks, Andy.

Thank you.

And our last question comes from Ben Burnett from Stifel. Your line is open.

Jonathan Zalevsky: JV, you want to talk about the benchmarks for... Yeah.

Alright. Thank you very much just a quick question on.

Jonathan Zalevsky: Yeah. So, they're taken from various keynote studies, Jess. So, in the early Keynote 1 study, there was a little bit of data for single-agent PEMBRO in the PDL less than 1, and they saw about a 7% to 8% response rate for single-agent PEMBRO in this setting. And of course, you know, PEMBRO is combined with chemo in that setting, right? So, that's what they studied.

The three five day program I guess as you expand that into beyond lupus and these different disease settings, and I guess, how do you think about dose and dose schedule of 358 and as the.

The phase one and cooperative here.

Yeah. Thanks, Ben.

And I'm going to ask you to take that question as you can be sure yeah glad.

Glad to thanks for the question.

Yes first of all the phase one study is isn't even pointed it basically gave us a lot of information regarding the relationship of dose who's the induction and the degree of induction.

Jonathan Zalevsky: But for single-agent PEMBRO, it was 7% to 8%. For the 1 to 49, there's data from Keynote 42 that show about a 17% response rate for single-agent PEMBRO. And then for the greater than or equal to 50 subgroups, there's both data from Keynote 24 and data from Keynote 42, and they're in the 40 to 45% range for ORR. So those are the kinds of bars or, you know, metrics, benchmarks that we're using to compare the Propel data against the single-agent PEMBRO data in each of the different PDLs.

Our regulatory T cells and it also gave us information regarding.

How high you can go up where you maintain exquisite selectivity part just stimulation of regulatory T cells and as you know or I hope you know that we it was really very well tolerated. So so we had a good feeling for taking all of the doses that we studied and the and the.

Phase one program, taking it into later phase studies, so and the later phase studies basically all of them basically we're looking to see and we don't know and each of those diseases.

Which of these doses are most likely to generate the greatest degree of clinical impact and you know is at the highest dose and generate the highest number of T. Regs is it a middle dose that generates just elevated level. So it's a low dose it stimulates.

Operator: Thank you. Our next question comes from Paul Choi from Goldman Sachs. Your line is open.

Operator: Thank you for taking our questions and congratulations on all the progress in 2020. I want to maybe turn back to your collaboration with Merck in head and neck, and specifically with regard to your identification of frontline patients. I think the market data currently shows that PD-1 therapy is in excess of 50 percent already in the frontline setting. So I was wondering if you could maybe first comment on how you think about the recruitment timeline for your Phase 2 and Phase 3, and then versus the monotherapy arm that you will include in the trial, how you think about what sort of margin you would look for in your interim futility analysis. Thank you very much. Thanks, Paul. J.V., I'll ask you to comment a little bit on the plan.

Regulatory cells at a low level and I and the exquisitely.

Activity also perhaps at the highest doses somewhat less than that at the middle dose. So.

At the moment, that's what we need to find out and I would say to your question about you know, we don't know whether different diseases might have.

And there are different dose levels that would maximize the clinical response I think that's the excitement of of doing this broad scope and looking at a number of phase two studies and a number of different indications.

Thank you.

Thank you and that does conclude our question and answer session for todays conference and now I'd like to turn the call back over to Howard Robin for any closing remarks.

Operator: Sure, yeah, so...

Uh huh.

Operator: or yeah.

Well, thank you for everyone for joining us today, and I'd like to especially thank our employees for their continued dedication and consistent efforts during these very challenging times.

Operator: Also, you know, roughly 80 to 85% of patients with head and neck cancer actually have PD-L1 positivity, so they'll have a combined CPS score greater than or equal to 1.

Our dedication to advancing our clinical studies, while keeping our business on track is truly impressive and I want to thank every one of them as I stated earlier, we are well positioned with a strong balance sheet and maturing portfolio of immuno oncology and immunology programs and we thank our shareholders for their ongoing support and look forward to continuing to provide you.

Jonathan Zalevsky: So it is very immune sensitive, and it's a tumor type that already has a pretty high baseline of positivity. And then what we found from earlier, you know, Merck's keynote study is that the distribution of patients, the two categories that Merck used, the one to 19 and the greater than 20 CPS breakdown, that was about 50-50 in that patient population. So there's a pretty, you know, high proportion, right?

With updates on our progress should be a great year, we hope that you and your families continue to stay safe and healthy and again, thanks for joining us.

Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and you may now disconnect everyone have a wonderful day.

Jonathan Zalevsky: Patients that basically qualify, almost all of them will, will have a CPS score good enough for inclusion in the study. So we think there's a really good opportunity to enroll this trial pretty quickly because, in addition, every patient will get either the standard of care, PEMBRO, or the experimental arm, which is PEMBRO plus BEMPEG. So it's the standard of care plus a mechanism that could provide synergy. So this is a very nice option for patients, and it's a very nice option for physicians, right?

[music].

Uh huh.

[music].

Jonathan Zalevsky: Because the opportunity to put a patient on a trial where they're gonna get standard of care or standard of care plus, I mean, that's just a very favorable setting. So we expect this trial could enroll quite quickly. And then, you know, I'm sorry, I missed the second part of your question. Do you mind repeating it, Paul?

Jonathan Zalevsky: What margin you would look for in terms of your interim or futility analysis? Thank you.

Jonathan Zalevsky: Oh, yeah. Okay. Thank you. Sorry.

Jonathan Zalevsky: I totally started with that. So, yeah. So, we have a pre-specified futility, and that's when 200 patients would be enrolled and followed for a short amount of time and looked at by ORR. We haven't given the kind of guidance on what the futility margin is, but it's something that, you know, is obviously part of the study design. You know, it's something we discussed with health authorities, something we discussed with Merck as well, and it's obviously a part of the statistical analysis plan. Thanks for the questions.

Operator: Thank you. Our next question comes from Desai Yang from Mizzou Health Security. Your line is open. Hi, good afternoon, and thanks for taking my question. So my question is really around the CMC for 358. Do you expect making 358 to be as complicated as BAMPAC a couple years ago?

Operator: Thank you. Thanks, J.C. I'm going to ask you to...

Jonathan Zalevsky: Sure thing. Yeah.

Jonathan Zalevsky: So, the 3,5-A molecule is quite different than the BEMPEG molecule. On the one hand, it is also interleukin-2, right? So, in terms of the kind of fermentation, that's all the same, but the PEG is completely different. You, for example, know that PEG is releasable in bentonite.

Jonathan Zalevsky: whereas PEG is stable, it's a stable linkage in 358. And you also know that PEG is a prodrug, whereas 358, again, differs in that regard. It's an immediately active molecule.

Jonathan Zalevsky: So it's quite different, and it's under a totally different set of controls, both within in-process, as well as a totally different set of specifications for release. I also think it's important to mention that under the nature of the agreement that we had with Eli Lilly, Nektar was responsible for executing Phase 1 and also for manufacturing through the early part of Phase 2, but after that, Lilly assumed control of the entire program. And so, in fact, Lilly is now responsible for and executing not only the clinical studies but also the manufacture of Nektar 358. And they're, of course, scaling it up and moving it into

Howard W. Robin: And this is Howard. I would just add one more thing to that. If you look back at the BEMPEG manufacturing issue, which, of course, you're alluding to, I'll remind you that that was one.

Howard W. Robin: Bad lot of intermediate.

Howard W. Robin: got its way into two production lots for clinical studies, but those were bad lots that were made in 2016. So the problem has been resolved and is long behind us. I understand that it has shown up in a terrible way, but the manufacturing problems were associated with a bad batch of intermediates. There are no ongoing manufacturing problems or issues with anything that we make in Nektar. I just want to make that clear.

Operator: Thank you. Our next question comes from Andy Shea from William Blair. Your line is open. Okay, thanks for taking my question. So, JP, I think you kind of reminded us of the melanoma study.

Operator: and kind of talked about the immune profile a little bit. So, just wondering.

Operator: So, for the five patients who had 100% tumor size reduction but did not qualify for CR, in terms of their durability and...

Operator: [inaudible]

Operator: Fever

Operator: on space on, you know, across all the FEMPEG trials that you've seen. Yeah, hey, Andy, thank you for the questions. So, let me take them in two parts.

Jonathan Zalevsky: So the first thing that we noted in the melanoma data set, as we reported, it was a very long PFS, right? 30.9 months. And actually, when you look at some of that distribution for patients that had very, very deep responses, either 100% target lesion clearance or CRs, you know, they really stratified as the FDA meta-analysis indicated. You saw very, very high durability, very long disease control, right? And in fact, for those patients that had that kind of depth of response, we've not seen relapse at all.

Jonathan Zalevsky: So they're very much... Yeah, like, again, that our data is, it's like a page out of the meta analysis, you know, the depth of response really, really has a very profound effect on both PFS and OS. And when you, you know, stratify those kind of curves, that's exactly what you raised. Now, to your second question, you raised a very interesting kind of comment. And going all the way back to Steve Rosenberg's studies with high-dose IL-2 in the 1980s, people have been looking so closely for kind of correlates of immune activation, whether they're... or whether they're, you know, cell types or others to see if those kind of AEs or cytokine-related activities that you can measure throughout with clinical manifestations are associated with that.

Jonathan Zalevsky: and... And... And...

Jonathan Zalevsky: Now, there isn't really, like, convincing... [inaudible] a clear trend in our data set that we can point to, but the empirical observations that you make clinically, which is like what the investigators you're speaking to are indicating, they're empirically kind of consistent with that. The patients that have very pronounced cytokine-related AEDs, which can manifest like flu-like symptoms, they can manifest like fever, and they can manifest like different kinds of rashes.

Jonathan Zalevsky: There may be some trends that link those kinds of outward manifestations, but nothing that jumps out at you statistically. There are the kinds of trends that particularly really good clinicians that really treat their patients well and really do great diagnoses and really great bedside patient interactions can spot. But statistically, it's a lot harder to make those kind of inferences. The things that we were really excited about, if you remember from our CT presentation, we did find in our data set two on-treatment early detection biomarkers that seemed to really correlate with patients that eventually went on to respond.

Jonathan Zalevsky: And we reported those in Adi's presentation. So remember, Adi talked about eosinophilic increases seen in patients after BEMPEG very early on, right in the first cycle, which you know occur weeks before the first scan, and that those could be a potential predictive biomarker for patients that ultimately go on to respond.

Jonathan Zalevsky: And the other biomarker that I think is even more convincing to me was the single-cell cytokine data, which showed that in CD8 T-cells... polyfunctional strength was really dramatically elevated, you know, just a week after the first MTAG treatment in patients that ultimately went on to respond and even have a first scan showing positive tumor strength. So those were two additional.

Jonathan Zalevsky: that were really interesting and, you know, especially in the case of the single-cell cytokine, quite a novel kind of information that was very prognostic and potentially predicted, you know, early responses. Thank you, Andy.

Operator: Thank you. And our last question comes from Ben Burnett from C4.

Operator: ...

Operator: Hey, thank you very much. Just a quick question on the 3-5-8 program. I guess as you expand that beyond lupus into these different disease settings, what do you think about

Operator: Dose to Dose Schedule

Operator: Then, is phase one informative here?

Operator: Is phase one informative here? Yeah, thanks, Ben. Brian, I'm going to ask you to take that question if you can.

Brian Kotson: Sure, yeah, delighted. Thanks for the question.

Brian Kotson: Yes, first of all, the Phase I study is indeed informative. It basically gave us a lot of information regarding the relationship of dose to induction and the degree of induction of regulatory T cells. It also gave us information regarding how high you can go up, where you maintain exquisite selectivity for just stimulation of regulatory T cells. And, as you know, or I hope you know, it was really very well tolerated.

Brian Kotson: So, we had a good feeling about taking all of the doses that we studied in the Phase I program and taking them into later phase studies. So, in the later phase studies, basically, all of them were basically looking to see, and we don't know in each of those And, you know, is it the highest dose that generates the highest number of Tregs? Is it a middle dose that generates just elevated levels? Or is it a low dose that stimulates regulatory cells at a low level?

[music].

Brian Kotson: And the exquisiteness, you know, the selectivity also, perhaps at the highest dose is somewhat less than at the middle dose. So at the moment, that's what we need to find out. And I would say to your question about whether different diseases might have, you know, different dose levels that would maximize the clinical response. I think that's the excitement of doing this broad scope and looking at a number of phase two studies and a number of different indications. Thank you.

Howard W. Robin: Thank you. And that does conclude our question and answer session for today's conference, and I'd like to turn the call back over to Howard Robin for any closing remarks.

Howard W. Robin: Well, thank you everyone for joining us today, and I'd especially like to thank our employees for their continued dedication and consistent efforts during these very challenging times. Their dedication to advancing our clinical studies while keeping our business on track is truly impressive, and I want to thank every one of them. As I stated earlier, we're well-positioned with a strong balance sheet, a maturing portfolio of immuno-oncology and immunology programs, and we thank our shareholders for their ongoing support and look forward to continuing to provide you with updates on our progress. It should be a great year. We hope that you and your families continue to stay safe and healthy, and again, thanks for joining us.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect. Everyone, have a wonderful day. Free course on www.mesmerism.info Subscribe to our YouTube channel for more videos related to hypnosis Subscribe to our YouTube channel for more videos related to hypnosis Subscribe to our YouTube channel for more videos related to hypnosis Free course on www.mesmerism.info Free course on www.mesmerism.info Subscribe to our YouTube channel for more videos related to hypnosis [inaudible] Get our free course on www.mesmerism.info, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??