Q3 2021 Nektar Therapeutics Earnings Call

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Good day, and thank you for standing by welcome to them extra therapeutic first quarter 2021 financial result conference call.

Operator: Welcome to the Nektar Therapeutics 3rd Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press the star and then 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star and then 0. I would now like to hand the conference over to your speaker today, Jennifer Ruddock, Head of Corporate Affairs. Please go ahead.

At this time all participants are in a listen only mode. After the speaker's presentation that will be a question and answer session to ask a question during the session you'll need to press darlin wanting your telephone.

Please be advised that today's conference maybe recording if you require any further assistance. Please first started and then zero.

Not like the hand, the conference over to your Speaker today, Jennifer wedding head of corporate Affairs. Please go ahead.

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

Thank you Crystal and good afternoon, everyone.

Thank you all 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. Dimitri Noyton, our Chief Medical Officer. On today's call, we expect to make forward-looking statements regarding our business, including clinical trial enrollments and clinical trial results, timing and plans for future trials, timing 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

With us on the call or Howard robbing, our president and C E O.

<unk> R. C O O M C F L. Dr. Jonathan Dolecki, our chief of research and development.

And Doctor, Dmitri Newton or Chief Medical Officer.

Today's call, we expect to make forward looking statements regarding our business.

Including clinical trial enrollments in clinical trial results.

Timing and plans for future trials timing and plans for future clinical data presentations, the therapeutic potential of our drug candidates.

Outcomes and plans for health authority regulatory actions and decisions.

Jennifer Ruddock: Financial guidance and certain other statements regarding the future of our business. Because these forward-looking statements relate to the future, they are subject to inherent uncertainty and risks that are difficult to predict and many of which are outside of our control. Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in the Form 10-Q that was filed on August 6, 2021, 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.

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 inherit uncertainties.

And risks that are difficult to predict and many of which are outside of our control.

Our actual results may differ materially from these statements and.

Jennifer Ruddock: A webcast of this call will be available on the Investor Relations page of Nektar's website at Nektar.com. Before turning the call over to Howard, I'd like to remind you that we are dialing in from different locations. I will moderate the Q&A session for our team so we can avoid technical issues during the session, and we appreciate your patience. With that said, I would like to hand the call over to our President and CEO, Howard Robin.

Howard W. Robin: Thank you, Jennifer. Thanks to all of you for joining us today. This quarter, we continue to advance both our IO and immuno-oncology pipeline. Our progress has set the stage for what is expected to be a transformative period for Nectar, starting with a series of anticipated key registrational and key mid-stage data readouts across our portfolio throughout 2022, as well as some of the most anticipated data from our Phase III study for Benfag and melanoma coming in the early part of 2022 So let me begin today with BEMPEG, our most advanced clinical program.

Howard W. Robin: Our IL-2 pathway agonist is being developed in combination with checkpoint inhibitors Nevo and Pembrone in multiple large, frontline, and adjuvant tumor settings. Together with our partner BMS, we're advancing five ongoing registrational studies of BEMPEG and NEVO under our joint development. Three of these studies are on track for top-line data readouts in the first half of 2022. In October, BMS informed us that they had completed enrollment in the phase three study of Benpeg plus Nevo and previously untreated metastatic melanoma. The current forecast for timing for ORR and PFS analysis from this study is sometime in the early part of 2022.

Three study of Bempeg clips Nivo previously untreated metastatic melanoma, the current forecast for timing for the O R. R and P. F. S analysis from this study is sometime in the early part of 2022.

Additionally, we anticipate data from the phase three study in renal cell carcinoma in the phase two accelerated approval study and cisplatin ineligible bladder cancer in the first half of 2022 after the top of the melanoma topline desk.

Positive data from these three studies would support a series of BLA filings for Bempeg, followed by commercial launches for the combination treatment of Bempeg plus nivo beginning as early as late 2022 or early 2023.

Howard W. Robin: Additionally, we anticipate data from the Phase 3 study in renal cell carcinoma and the Phase 2 accelerated approval study in cisplatin-ineligible bladder cancer in the first half of 2022, after the melanoma top-line. Positive data from these three studies would support a series of BLA filings for Benpeg, followed by commercial launches for the combination treatment of Benpeg plus Nevo, beginning as early as late 2022 or early 20 The Registrational Program with BMS also includes two additional large Phase III studies, one in adjuvant melanoma and one in muscle-invasive bladder.

The Registrational program with BMS also includes two additional large phase III studies on an adjuvant melanoma and wanted Muslim data bladder cancer.

Indications offer an opportunity to significantly expand the patient populations that can be served by bempeg, it's a potentially benefit patients by treating them earlier in the course of their disease, we're particularly excited about the adjuvant melanoma study, which is ahead and its enrollment projections with almost half of the target enrollment of.

950 patients reached as of the beginning of November.

These studies up longer timelines associated with them as they are in earlier settings with larger targets enrollment sizes.

From these studies are expected beginning in 2024.

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Howard W. Robin: These indications offer an opportunity to significantly expand the patient populations that can be served by BEMPEG and to potentially benefit patients by treating them earlier in the course of their disease. We're particularly excited about the adjuvant melanoma study, which is ahead in its enrollment projections, with almost half of the target enrollment of 950 patients reached as of the beginning of November. These studies have longer timelines associated with them, as they are in earlier settings with larger target enrollment sizes.

M. S is conducting a phase two study and renal cell carcinoma for Bempeg, plus nivo with a T K I to pave the way for future development of of TKS inclusive regimen building on their recent successful approval of Nivo plus cobbler.

In addition, we also have a six Registrational program, which is a combination study of Bempeg, plus Pembroke and head and neck cancer.

The phase two three study and head and neck cancer is now enrolling patients were excited about the potential of this public to increase and deepened responses versus timbral alone in this immune sensitive cancer.

Is about 70% of the market share and the first one steady for treatment of P. D O one positive head and neck cancer patients and we believe there is a unique opportunity to improve outcomes by combining our Iot mechanism with a leading checkpoint inhibitor in the center.

Howard W. Robin: Data from these studies are expected to begin in 2024. In addition, BMS is conducting a phase two study in renal cell carcinoma for BEMPEG plus NEVO with the TKI to pave the way for future development of a TKI-inclusive regimen, building on their recent successful approval of NEVO plus CABA. In addition, we also have a sixth registrational program, which is a combination study of BEMPEG plus PEMBRO in head and neck cancer. The Phase 2-3 study in head and neck cancer is now enrolling patients.

Have you stayed in the past our initial strategy with Mpeg in combination with Pembroke his central on the largest settings, where kimbro as the gold standard of care. It had neck cancer as I've. Just described and then in non small cell lung cancer. We are running a phase two study called propel.

Howard W. Robin: We're excited about the potential of this doublet to increase and deepen responses versus pembroke alone in this immune-sensitive cancer. Pembroke has about 70% of the market share in the first-line setting for treatment of PD-L1-positive head and neck cancer patients, and we believe there is a unique opportunity to improve outcomes by combining our IL-2 mechanism with the leading checkpoint inhibitor in this setting. As we stated in the past, our initial strategy with BENPEG, in combination with PEMBRO, is centered on the largest settings where PEMBRO is the gold standard of care.

Howard W. Robin: It had neck cancer, as I just described, and then in non-small cell lung cancer, we are running a phase 2 study called PROPEL. For PROPEL, we plan to present the initial data from the Phase 2 study at the ESMO-IO meeting in December, and Dimitri will provide an update on this study on this call. These initial data will include approximately 60 to 70 patients treated with Benpeg plus Pembrone doublet, with varying PD-L1 expression levels. At ESMO-IO, we will host an analyst call with Dr. Daniel Johnson of the Oshner Medical Center in Louisiana. And I will let Dimitri talk more about this upcoming presentation in a moment.

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Well. We've also made notable progress with our second immuno oncology candidate neck or $2 55, an IL 15 agonist that has demonstrated its ability to expand natural killer cells CDA positive T cells can memory T cells. Given these unique attributes next with $2 55 could address.

And needs in both liquid and solid tumors.

The plan is initially focused on combining <unk> 255, with antibodies that use antibody dependent cellular toxicity or a D. C C to kill cancer cells as these antibodies.

Howard W. Robin: We've now advanced the PROPEL study with the addition of chemotherapy arms to the BEMPEG plus PEMBRO treatment regimen in both squamous and non-squamous patients with PD-L1 expression levels under 50%. The combination with chemotherapy allows us to consider a registrational strategy for BEMPEG in non-small cell lung cancer in these populations that currently have the highest unmet need for better therapeutic options. As you know, non-small cell lung cancer is not as immune sensitive a tumor as melanoma.

How does require functional NK cells for their mechanism of action.

Next week at city, we will share our first early data from patients in the initial dose escalation cohorts of the ongoing phase one solid tumor study, which is evaluating <unk> five plus rituximab.

Patients with either colorectal or head and neck cancer.

We are still goes to escalating in this study we are pleased that the data were selected as a late breaking abstract and we will be hosting a conference call next Friday November 12 at 12 noon Eastern time with Doctor Allen Tan from Rush Medical Center to review these data in more depth.

Howard W. Robin: So, chemotherapy combined with PEMBRO has emerged as a standard of care for these patients in order to overcome this more immune-resistant setting. In particular, the under 1% patient population is one that we are highly focused on as a future potential registrational strategy for PEMPEG because of its mechanism of upregulation of PD-L1 in combination with a checkpoint and its ability to potentially increase depth of response and duration of response, which we know could lead to longer survival.

We also announced today that data from the ongoing dose escalation stage of the phase one study in Hematological malignancies were accepted for presentation at Ash in December as well.

The Pharmacodynamic data in the abstract released today shows a sustained increase in N. K S. CDA positive T cells, but also a proliferative ability of these cells, we look forward to providing more details at ash.

In September we announced our first collaboration for an extra 255 with Merck Kgan Pfizer.

The collaboration expanded the program for <unk> hundred 55 into its first compare comparative trial and an on label indication for Merck Kgan's Avila Mab as maintenance therapy in bladder cancer.

Unlike other approved anti PD L. One silver map as shown in preclinical studies to introduce license of tumor cells via the ADC mechanism, So we and Merck or excited to explore its potential synergies when combining with an NK cell stimulator, such as mec or 255.

Howard W. Robin: Additionally, while PEMBRO and chemotherapy have improved overall survival in PD-L1 negative patients with non-small cell lung cancer, its benefit is still limited to under two years. We've also made notable progress with our second immuno-oncology candidate, Nektar-255, an IL-15 agonist that has demonstrated its ability to expand natural killer cells, CD8-positive T-cells, and membrane T-cells. Given these unique attributes, Nektar 255 could address treatment needs in both liquid and solid tumors. Our development plan is initially focused on combining Nektar-255 with antibodies that use Antibody Dependent Cellular Toxicity, or ADCC, to kill cancer cells, as these antibodies bodies require functional NK cells for their mechanism of action.

Howard W. Robin: Next week at CITSE, we will share our first early data from patients in the initial dose escalation cohorts of the ongoing phase one solid tumor study, which is evaluating Nektar 255 plus Tuxenad in patients with either colorectal or head and neck cancer. We are still ghost-scaling in this study, but we are pleased that the data were selected as a late-breaking abstract, and we'll be hosting a conference call next Friday, November 12th, at 12 noon Eastern time, with Dr. Alan Tan from Rush Medical Center to review these data in more depth.

The development program, including manufacturing has now transferred to that really currently has next to 358 clinical trials underway for clinical trials underway.

A phase II study in lupus a phase two study in ulcerative colitis and to ongoing separate phase <unk> studies in psoriasis and atopic dermatitis.

We expect data Readouts from these Lilly run studies over the next six to 12 months and will be is also planning to add two additional phase II studies to the program in the near future.

Beyond our deep clinical portfolio, we continuing to invest in the area of immune science and cytokine biology to try the next wave of IMD candidates from an operational perspective, we have an exceptionally strong balance sheet.

Howard W. Robin: We also announced today that data from the ongoing dose escalation stage of the Phase I study in hematological botanical disease were accepted for presentation at ASH in December as well. The pharmacodynamic data in the abstract released today show a sustained increase in NK and CD8-positive T-cells, but also a proliferative ability of these cells. We look forward to providing more details at ASH.

To end the year with over $800 million in cash this cash position together with the support of our strategic collaborations and potential for up to one $4 billion and regulatory approval and sales milestones for <unk> in the U S. Europe, and Japan provides us with the financial foundation to execute our robust development.

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We're all eagerly awaiting the anticipation the redwood anticipation the Registrational study readout for <unk> melanoma, RCC and bladder cancer and the first part of next year.

Let me now turn the call over to our Chief Medical Officer, Dr. Dmitry.

Dmitry.

Howard W. Robin: In September, we announced our first collaboration for Nektar 255 with Merck KGA and Pfizer. The collaboration expands the program for Nektar 255 into its first comparative trial with Merck KGA's Avilumab as maintenance therapy in bladder. Unlike other approved anti-PD-L1 thalimabs, it has been shown in preclinical studies to induce lysis of tumor cells via the ADCC mechanism, so we at Merck are excited to explore its potential synergies when combined with an NK cell stimulator such as Nektar 255.

Howard W. Robin: Merck will evaluate Nektar 255 plus Avilumab as part of the Phase II Javelin Bladder Metally Umbrella trial. We're excited that Nektar 255 was chosen for this umbrella study, and it is the only IL-15 agent that will be included. Merck will be responsible for conducting the study, which is set to begin in the first quarter of 2022, and Nektar will supply Nektar-255. Jay Z will discuss the trial in more detail momentarily.

Howard W. Robin: The third cytokine in our portfolio is Nektar 358, which we are developing in partnership with Eli Lilly to address a broad range of autoimmune and inflammatory conditions. Nektar 358 targets the IL-2 receptor complex to stimulate the proliferation of powerful inhibitory immune cells, known as regulatory T-cells, and thereby brings the immune system back into balance. We are proud of this program, and we are the only company to have reported a multiple dose effect of our agents on target T-regulatory cells in patients.

Since Pff's analysis is an event driven analysis, a number of factors, including the actual rate of PFS he fence might impact the timing of the analysis.

The next study, which nectareous running is a 620 patient phase three first line renal cell carcinoma study comparing bempeg cousin of ultimate purchase a T. K I agent, a physician's choice, which can be either sunitinib or cabozantinib we.

Howard W. Robin: Together with our partner, Lilly, we're leading in this space, with the advanced clinical stage of NECTAR 358 and with respect to the broad scope of development being executed in parallel across multiple significant autoimmune indications. As planned from the start of our collaboration with Lilly, the development program, including manufacturing, has now transferred to them.

We expect that'd be could reach our first interim analysis for the primary endpoint of overall survival sometime in the second quarter of 2022.

M. S. N nektar are taking a comprehensive approach to the development of bent back because Nicole and that in this particular tumor type. Additionally, bms's conducting a 250 patients randomized face to study in RCC that combined spent that plus Nicole <unk> with extra Lexus's, cabozantinib, which allows us to compare it to.

The treatment of Nicole enough Cabozantinib to pave the way for a T. K I inclusive regimen in RCC with bent back end of all of them.

Howard W. Robin: Lilly currently has Nektar 358 clinical trials underway, four clinical trials underway, and a phase 2 study in lupus. phase II study in ulcerative colitis and two ongoing separate Phase Ib studies in psoriasis and ectopic dermatitis. We expect data readouts from these LillyRUN studies over the next 6 to 12 months. Lilly is also planning to add two additional Phase II studies to the program in the near future. Beyond our deep clinical portfolio, we continue to invest in the area of immune science and cytokine biology to try the next wave of IMD candidates. From an operational perspective, we have an exceptionally strong balance sheet and expect to end the year with over $800 million in cash.

Earlier this year VNS and neck are extended the strategy Nrc's seemed to include new collaborations with extra Lexus, who will be conducting a study evaluating bempeg close Nikola <unk> with their novel next generation P. K I X L. 92. The study will also include order G U Kansas, including your T illegal cancer.

With respect to the face to study in first lines eligible urothelial carcinoma, which nectareous running the study is designed to serve as a basis for a potential filing for accelerated approval.

The study includes about 110, cisplatin and eligible ineligible urothelial carcinoma patients who have a baseline cps core of 10 or lower as a measure of PDL. One expression. The primary endpoint for this trial are overall survive sorry, overall response and duration of response, that's determined by central radio.

<unk> G. B a few for this study we're looking to achieve a medium follow up or 18 months for measuring the duration of response and we expect our first data from this study to come in the first half of 2022 as well.

Howard W. Robin: This cash position, together with the support of our strategic collaborations and the potential for up to $1.4 billion in regulatory approval and sales milestones for BENPEG in the U.S., Europe, and Japan, provides us with the financial foundation to execute our robust development strategy. We're all eagerly awaiting, with anticipation, the registrational study readouts for BEMPEG and melanoma, RCC, and bladder cancer in the first part of next Let me now turn the call over to our Chief Medical Officer, Dr. Dimitri Noyes. Dr. Dimitri.

Dimitri Noyton: Thank you, Howard. I will provide a quick update on the BAMPAC program and the timing for registrational studies, which are tracking in line with our prior guidance. First, for the 760 patient phase three first-line metastatic melanoma study, which is being run by our partner, BMS. We at BMS are very much looking forward to completion of the study and future data. As Howard stated, BMS informed us in October that the study was fully enrolled.

Dimitri Noyton: BMS has an excellent track record in melanoma, with multiple successful registrational trials for IO agents under their belts. Melanoma has proven to be a very immune-sensitive tumor setting, and the promise of BANPAC, an agent that can deepen responses and extend responses for these patients, is very exciting. The BANPAC plus nivolumab combination received a breakthrough therapy designation from the FDA in August 2019 based upon this phenomenon in melanoma patients. If the Phase III study results are similar, we anticipate a unique opportunity for the BANPAC+nivolumab doublet to emerge as a new standard of care in this setting.

Situation. This is because at the time of the abstract submission due date the blind independently few off the datasets can propel had not been completed yet.

That's how it stated we will host an analyst <unk> around a smile, which will include the invited investigate a doctor Daniel Johnson from the auction of Kansas Center, who will go a number of patients bolt into dose escalation portion of the trial and also in a non small cell lung cancer expansion portion of the study and he has observed the positive experience with the doublets.

Dimitri Noyton: As we noted last quarter, BMS has told us they intend to conduct their first analysis of the data for both ORR and PFS endpoints when the number of events as outlined in the statistical analysis plan for the PFS endpoint is reached. Current projections from BMS indicate that this data analysis could occur in the early part of 2022. Given the breakthrough therapy designation I mentioned earlier for this indication, we believe that we would be able to move rapidly towards regulatory filing if warranted by the data. Of course, since PFS analysis is an event-driven analysis, a number of factors, including the actual rate of PFS events, might impact the timing of the analysis.

As a reminder, this presentation will include data of approximately 60 to 70 patients with squamous, one known squamous known small cell lung cancer.

Dimitri Noyton: The next study, which Nektar is running, is a 620-patient phase 3 first-line renal cell carcinoma study comparing BANPAK plus nivolumab versus a TKI agent of physician's choice, which can be either Sanitinib or Gabazentamide. We expect that we could reach our first interim analysis for the primary endpoint of overall survival sometime in the second quarter of 2022. BMS and Nektar are taking a comprehensive approach to the development of BAMPAC plus nivolumab in this particular tumor type.

Dimitri Noyton: Additionally, BMS is conducting a 250-patient randomized phase two study in RCC that combines BAMPAC plus nivolumab with exolexis cabozantinib, which allows us to compare it to the treatment of nivolumab plus cabozantinib to pave the way for a TKI-inclusive regimen in RCC with BAMPAC and nivolu Earlier this year, BMS and Nektar expanded their strategy in RCC to include a new collaboration with XLXs, who will be conducting a study evaluating BenPak plus Nivolumab with their novel next-generation TKI, XL92.

Dimitri Noyton: The study will also include other GU cancers, including urotelial cancer. With respect to the Phase 2 study, in the first line, it says eligible urotelial carcinoma, which Nektar is running. The study is designed to serve as the basis for a potential filing for accelerated approval. This study includes about 110 cisplatin-ineligible urogelial carcinoma patients who have a baseline CPS score of 10 or lower as a measure of PD-L1 expression.

15 of <unk> Evaluable patients.

And the other 1% or negative population for P. D O one status with double to single agent response, Grateful Kimble isn't it notably.

Dimitri Noyton: The primary endpoints for this trial are overall response and duration of response as determined by central radiology review. For this study, we are looking to achieve a median follow-up of 18 months to measure the duration of response, and we expect our first data from this study to come in the first half of 2022 as well. As Howard noted earlier, the BEMPEC Nivolumab program also has large phase 3 studies in muscle-invasive bladder cancer and adjuvant melanoma.

Notably two of two of the patients in this cohort.

Chief to 100 per cent reduction in their receives target lesions one patient experienced this at the first on treatments Ken the second patient experienced is gradually over time.

The median duration of response in this cohort has not been reached and the current media in depth of response is notable at 77% tumor forward in production for to respond and just call. It. We are very pleased that we saw both the doubling and the depth of response for patients with P. D O one negative tumors.

Which historically have some limited treatment effect from single Aden checkpoint therapy.

Dimitri Noyton: The Phase III periadjuvant muscle in phases bladder cancer study, which is being run by BMS, is enrolling approximately 540 patients who will receive BEMPEC plus nivolumab or nivolumab monotherapy, first in a neoadjuvant setting prior to radical cystectomy and then in the adjuvant setting for a 12-month treatment period following their surgery.

[noise] excuse me and they want to 49% cohort, although we had over half of the patients in this cohort the chief extended stable disease. The overall response rate was in the low single digits, which we were surprised by that result.

Dimitri Noyton: As this study treatment is for a longer period, we expect the first data readout to be in 2024 or 2025. This study is also designed to serve as a confirmatory study for our planned potential accelerated approval in metastatic cis-ineligible urotelial carcinoma settings. Second, the Phase 3 adjuvant melanoma trial that Nektar is running. This study is enrolling a total of approximately 950 patients with a 12-month treatment period post-surgery and an endpoint of recurrence-free survival by blind and independent central review. This study continues to rapidly enroll patients, and as Howard stated earlier, enrollment is now ahead of schedule.

Dimitri Noyton: As of November 1st, we have enrolled 450 patients, which we believe reflects physicians' and patients' enthusiasm for the potential of BAMPAC plus nivolumab in melanoma. The adjuvant study is designed to position BAMPAC as standard of care for the treatment of melanoma, building upon the recent approval of nivolumab in this setting. Initial data from the study are expected in 20

Dimitri Noyton: I will now turn to the PROPEL study evaluating BEMPA, BEMPA-plus, and BEMPA-less MAP in non-small cell lung cancer. As Howard stated, we plan to present the initial data from PROpel for non-small cell lung cancer for patients who received the BAMPAC plus Fembolizumab doublet at Asthma.io in December. The abstract was submitted, and it was accepted that SMAO was a placeholder only and did not include any data beyond the initial safety evaluation.

Dimitri Noyton: This is because at the time of the abstract submission deadline, the blind and independent review of the data set from Propel had not been completed yet. As Howard stated, we will host an analyst event around SMO-IO that will include the invited investigator, Dr. Daniel Johnson from the Arsenal Cancer Center, who enrolled a number of patients both in the dose escalation portion of the trial and also in the non-small cell lung cancer expansion portion of the study. And he has observed a positive experience with the Doppler.

And the depth of his phone on the 1% was notable.

A doubling of our our impatience that was pulling that experienced notable desktop this fall's second.

[noise] across cohorts the depth and duration of response was notable ear when oprah medium depth of those phones of 72% and a medium as phones not yet reached in the 50 per cent cohort, we observed 813% complete response rate and it speaks to the phenomenon shirreffs with benthic.

Dimitri Noyton: As a reminder, this presentation will include data from approximately 60 to 70 patients with squamous or non-squamous non-small cell lung cancer. The patients are spread across three separate PD-L1 expression subgroups. The study was designed as a single-arm study to evaluate the benefit of the doublet compared to historical overall response rates achieved with single-agent pembrolizumab, which are well documented across two registrational trials. In non-small cell lung cancer, which is not typically recognized as an immune-sensitive cancer, we know that baseline tumor PD-L1 expression status can dictate the expected clinical benefit of pendolizumab.

In order to more types complete responses with either chemotherapy I O R. I O alone lung cancer or not Coleman.

Notably there were some factors that made the patients in this study overall more challenging population for treatments and to keynote studies such as high tumor.

[noise] burden and probably chemotherapy for metastatic disease, most notably into 149 cohort.

For <unk>. We are also treating patients with a higher goes off 0.01 milligrams per kilogram of bent that in combination with pimple visit them. While the cover it is still early and ongoing we have observed H E increases with the dose, but most patients are too early indepth scan cycles to assess the secrecy.

We are continuing to monitoring this cohort [noise].

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Dimitri Noyton: As a benchmark, we call the pembolism that monotherapy results in an overall response rate of approximately 8% in patients with PD-L1 tumor expression of less than 1, about 15% in patients with a PD-L1 tumor expression of 1-49, and for patients with a PD-L1 tumor expression greater or equal to 50%, single agent pembolism that delivers approximately an overall response rate of 40-45%. Although this was an open-label study, as we have stated in the past, we determined that we should be blinded to the efficacy data until the time of completion of the blinded independent review.

Due to the standard of care in the first nine months most of lung cancer, mostly being a chemotherapy inclusive backbone.

Dimitri Noyton: We recently completed the database log for the initial analysis of this study and received the aggregate efficacy data with detailed efficacy evaluation for patients in the study from the blinded independent review for the doublet in non-small cell lung cancer arms of the PROPEL study. I'd like to share some initial observations from this report ahead of the ASML-IO Congress.

Dimitri Noyton: First, we are pleased with a number of takeaways that reinforce for us the additive benefit that BANPAC provides to single-agent pembrolizumab. We observed a notable depth and duration of responses in various cohorts, including a number of patients that achieved complete responses and also patients who achieved 100% tumor volume reduction, which is not common with single-agent pembrolizumab and even with the combination of chemotherapy and pembrolizuma Because we enrolled patients prior to the completion of an independent baseline PD-L1 assessment, we over-enrolled the under 1% and the 1 to 49% cohorts with approximately 28 efficacy-evaluable patients per cohort versus our original targets of 20 and 18 patients, respectively.

Dimitri Noyton: In the greater than 50% population, we had a total of 15 efficacy-evaluable patients. In the under 1% or negative population for PD-L1 status, we doubled the single agent response rate for pembrolizumab. Notably, two of the patients in this cohort achieved 100% reduction in their rhesus target lesion.

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For us to establish Pentech S. First IL two based mechanism for the treatment of had any cancer. So that'd be now to know who to call to Casey who will review. The next like 255 program and our next are 358 program J.

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Dimitri Noyton: One patient experienced this at the first on-treatment scan; the second patient experienced this gradually over time. The median duration of response in this cohort has not been reached, and the current median depth of response is notable at 77% tumor volume reduction for the responders in this cohort. We are very pleased that we saw both the doubling and the depth of response for patients with PD-L1 negative tumors, which historically have seen limited treatment effects from single agent checkpoint therapy.

Thank you Dmitri.

Let me start with an extra 255, an agent that engages the full biology of the I owe 15 pathway to provide functional activation and homeostatic control of I owe 15 responses of immune cells, namely natural killer cells C. D. A T cells and immune memory subsets.

And as an agonist of the full I owe 15 pathway, an extra 255 can therefore be combined with multiple mechanisms ranging from targeted agents cellular therapies, and even immunological checkpoints to potentially improve their efficacy.

Dimitri Noyton: In the 1-49% cohort, although we had over half of the patients in this cohort achieve extended stable disease, the overall response rate was in the low single digits, and we were surprised by that result. Although we were surprised by the results, it is important to note that we did observe three key differences in the patient population enrolled into the 1 to 49 cohort versus the single-agent Pembrolizumab studies. First and most notably, we discovered that in this cohort of 1-49%, 25% of patients had prior chemotherapy for either stage 3 disease or as adjuvant treatment for stage 1 or 2 disease before coming on to the study. This was allowed per protocol with a minimum interval of 6 months.

It's Howard mentioned, our initial strategy is focused on combining with antibodies that function through in a D. C. C mechanism of action and we have a robust clinical program in place and both liquid and solid tumors.

A recent clinical collaboration with Merck K J iser as a further extension of that strategy.

Avelumab is the only immunotherapy treatment to demonstrate a survival benefit and patience with locally advanced or metastatic urothelial carcinoma.

Have not progressed on first line platinum containing chemotherapy.

And so it has rapidly established the dominant market position in the setting.

Dimitri Noyton: In the keynote studies, this percentage of patients, however, was much lower at 4-6%. Furthermore, this cohort also enrolled patients with the highest baseline median and mean tumor burden in our study, and we had a higher proportion of patients with squamous histology in this cohort as compared to the single-agent preembolism studies. We believe the combination of these factors might have impacted the surprising overall response rates we saw in this cohort.

Dimitri Noyton: For the over 50% population cohort with 15 efficacy eligible patients, we are pleased to see 13% of patients experiencing a complete response with the doublet treatment. As we previously said, we did not expect to see any notable increase in overall response rate in this cohort. As pembrolizumab is a single agent, the overall response rate is already pretty high. And in such a small patient population, in this case, in 15 patients, the overall response rate was 40%, which we knew it could be challenging to show the difference. So our demonstrated ORR was consistent with what we expected from the trial.

Dimitri Noyton: However, we were hopeful going into this study that we could see, even in a small patient set, a higher quality of responses than we typically see with single agent flammulism. With several complete responses, we achieved this, and the patients with complete responses continue to be responders and stay on treatment for over one and over two years, respectively. Overall, across the non-small cell lung cancer cohorts, we had a median depth of response for all responders of 72%, as measured by blinded independent review, and this too was something we had hoped to see in this study. Overall, we are pleased with a key number of observations from Propel. First, the overall response rate and the depth of response in the under 1% were notable.

But the logic malignancies. The agent has been very well tolerated as a mono therapy and we've dose as we've continued dose escalation and stuff.

As a result dose escalation is ongoing and we now expect to complete the dose escalation days of the study and the first part of 2022.

We are also exceptionally pleased that the dose escalation data or accepted for presentation at ash This year, which is being held in Atlanta in December.

Dimitri Noyton: We saw a doubling of ORR in patients that responded and experienced a notable depth of response. Second, across cohorts, the depth and duration of response are notable here, with an overall median depth of response of 72% and a median response not yet reached. In the 50% cohort, we observed a 13% complete response rate, and this speaks to the phenomenon we have observed with BANPAC in other tumor types. Complete responses with either chemotherapy, or I.O. or I.O.

The date of build on our observations presented at 50 2020 for an extra 255 and he met a logical malignancies and set the stage for the combination of nectar 255 with a D. C. C agents were tucked some have been <unk> impatience with non hodgkins lymphoma, and multiple myeloma, respectively.

A following dose escalation, we will expand into additional arms at first arm in the study will evaluate an extra 255 is mono therapy or in combination with Rituxan map and third liner later follicular lymphoma are low grade non hodgkins lymphoma.

Second arm will evaluate an extra 255 is a mono therapy and in combination with Darzalex bass pro and third minor grader multiple myeloma.

Dimitri Noyton: alone in lung cancer are not common. Notably, there were some factors that made the patient in this study overall more challenging. Population for Treatment and the keynote studies such as high tumor, Burden, and Prior Chemotherapy for Metastatic Disease, most notably in the 1 to 49 cohorts. For Propel, we are also treating patients with a higher dose of 0.01 milligrams per kilogram of Pempec in combination with Pembrolizabine. Well, the cohort is still early and ongoing. We have observed A.E.

And finally, a third arm will evaluate an extra 255 is a mono therapy for non hodgkins lymphoma patients who have previously progressed following approved C. D 19 car T cell therapy.

Dimitri Noyton: Efficacy increases with the dose, but most patients are too early in their scan cycles to assess the efficacy. We are continuing to monitor this cohort. But due to the standard of care in first-line non-small cell lung cancer, mostly being a chemotherapy-inclusive backbone, and the history of successful treatment of non-small cell lung cancer with chemotherapy, our development focus will be on chemotherapy combination arms in the PROPEL study to guide future development in this setting. Hence, given how well-tolerated BANPAC is at the 0.006 milligram per kilogram dose and the signal we have seen in Dovlips, BANPAC is being combined with pembrolizumab and chemotherapy at the 0.006 milligram per kilogram dose.

Dimitri Noyton: To that end, as Howard stated earlier, we also recently added a chemotherapy combination arm to the PROPEL study. We did this in order to potentially develop a registrational path that captures the appropriate standard of care for patients in the under 50% PD-L1 category. Over 70% of patients have tumors with an expression level of less than 50%, and these patients mostly received a chemotherapy-inclusive regimen. IOM monotherapy is uncommonly used in this setting.

Dimitri Noyton: As we know, also in the over 50% group, only about half of the patients are receiving embolism as monotherapy. The chemo combo part of this study can provide us with initial data sometime in the middle of 2022, and we will use the totality of the data from PROPEL to determine a comprehensive registration path for PEMPEC in non-small cell lung cancer. For our new registrational Phase 2, 3 trial in head and neck cancer, we recently opened enrollment, and we expect to randomize our first patient before the end of the year.

I'll include in the secondary end points. We expect this study to be completed within within the next 12 to 18 months.

[noise] earlier this year Lily began enrolling patients in a phase two randomized placebo controlled trial in patients with alternative colitis.

The study will evaluate multiple dose levels during the initial induction period using an adaptive design.

Total enrollment is planned to be 200 patients and the trial and point as a percentage of patients with clinical remission after induction treatment at 12 weeks.

Dimitri Noyton: We have collaborations in place with both Merck and SFJ Pharmaceuticals for this study, and we are very excited about this opportunity to address a large patient population in the frontline setting. The 500-plus patient trial is designed to support the potential global registration of BMPAC plus pambolizumab in head and neck cancer. It includes an interim analysis of overall response rate after 200 patients are enrolled. If the overall response rate passes a pre-specified fertility boundary, the study will continue, and the remaining 300 patients will be enrolled in the phase 3 portion of the study.

In addition, Lily gets planning to continue to grow the development program for an extra 358.

There are plans for two additional phase two studies to be initiated a new indications in the near future.

Dimitri Noyton: For the phase 3 portion, a total of 500 patients will be evaluated for the primary endpoints of overall response rate and overall survival. Given the physical competitive landscape, we see this as a unique opportunity for us to establish Band-Bag as the first IL-2 based mechanism for the treatment of head and neck cancer. Let me now turn over the call to JC, who will review the Nektar 255 program and our Nektar 358 program. Thank you, Dimitri.

Jay Olson: Let me start with Nektar 255, an agent that engages the full biology of the IL-15 pathway to provide functional activation and homeostatic control of IL-15 responses in immune cells, namely natural killer cells, CD8 T-cells, and immune memory subsets. As an agonist of the full IL-15 pathway, Nektar 255 can therefore be combined with multiple mechanisms, ranging from targeted agents to cellular therapies, and even As Howard mentioned, our initial strategy is focused on combining it with antibodies that function through an ADCC mechanism of action, and we have a robust clinical program in place in both liquid and solid tumors.

Jay Olson: A recent clinical collaboration with Merck KGA and Pfizer is a further extension of that strategy. Avelimab is the only immunotherapy treatment to demonstrate a survival benefit in patients with locally advanced or metastatic urothelial carcinoma who have not progressed on first-line platinum-containing chemotherapy. And so it has rapidly established a dominant market position in this setting.

To be between 50 and $60 million arising from previously completed monetization of our royalty streams.

Additionally, our nonoperating expense includes approximately $15 million for the accounting of the contingent success based payments to <unk> as a derivative liability.

Jay Olson: We are very excited to combine Nektar 255 with the market leader and look forward to leveraging Merck and Pfizer's collective expertise to broaden our Nektar 255 development program. The Javelin Bladder Medley Study is a global, multi-center, phase 2 umbrella trial that will evaluate Avellumab monotherapy versus the doublet of Avellumab and Nektar 255 in this maintenance setting. The Nektar 255 combination arm of the study plans to recruit 72 patients and will be compared to the 36 patients of Elanabar.

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

Thank you and as a reminder to ask a question you will need to press star one on your telephone to withdraw your question. 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.

And that first question comes from Chris <unk> from Goldman Sachs. Your line is open.

Hi, This is <unk> on for Christian Thanks for the update on the propel data.

Jay Olson: Findings from this trial will help determine whether there is a registrational pathway for Nektar 2.5.5 in this setting where Velumab is already approved. The Avalabab Alliance between Merck and Pfizer is sponsoring the trial, with Merck taking the lead.

Jay Olson: Merck is on track to initiate the study in the first quarter of 2022. Our two ongoing studies for Nektar 255, one in liquid tumors and one in solid tumors, are advancing, and we look forward to sharing data from these studies in the coming weeks. At SIFTI next week, we will present the first data from patients in the initial dose escalation cohorts of our study, evaluating Nektar 255 in combination with Cetuximab in two distinct groups of highly refractory late-line patients, one group with metastatic colorectal cancer and the other with head and neck cancer. As Howard stated earlier, we are still dose escalating in this study. We will be hosting an analyst event on Friday, November 12th during the City Congress.

Jay Olson: The event will feature invited Key Opinion Leader, Dr. Alan Tan of Rush Medical Center, to join us for the event. For our Phase 1-2 study of Nektar 2-5-5 in patients with relapsed refractory hematologic malignancy, the agent has been very well tolerated as a monotherapy, and as we've continued dose escalation in the study. As a result, dose escalation is ongoing, and we now expect to complete the dose escalation phase of the study in the first part of 2022.

Too early at the DMC review.

For let's say interim interim analysis by the DMC.

And we know these results will be presented at ESMO I O.

We want to look at that data in detail.

They are also running a chemotherapy combination trial known as the leap six trial and we are expecting results next year.

Secondly, Novartis just announced it cannot be one trial, which was evaluating <unk> plus I O <unk> inhibitor kind of Kona plus.

Jay Olson: We are also exceptionally pleased that the dose escalation data were accepted for presentation at ASH this year, which will be held in Atlanta in December. The data build on our observations presented at CITI 2020 for Nektar 255 and hematological malignancy and set the stage for the combination of Nektar 2x5 with ADCC agents Rituximab and Daratumumab in patients with non-Hodgkin's lymph And following dose escalation, we will expand into additional arms.

<unk> plus chemotherapy versus chemotherapy and the study was announced is not meeting primary endpoints of OS and PFS, both in squamous and non squamous, but novartis noted that there were say.

Clinically meaningful improvements in a number of subset. So that's something we definitely want to look at <unk>.

Combining let's say my my answer and going back to the core of your question. We are most interested in the chemotherapy combination auction low expresses that forward.

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

Jay Olson: The first arm in the study will evaluate Nektar 2-5-5 as monotherapy or in combination with rituximab and third line or later, follicular lymphoma, or low-grade non-Hodgkin syndrome. A second arm will evaluate Nektar 2-Pi-5 as monotherapy and in combination with Darzalex Baspro in third line or greater multiple myeloma.

Oh, Hey, thank you for taking the questions and thanks for the update on the propel study.

Could you share with us any potential read across you may have from your initial learnings after looking at that data any potential read across to other studies for <unk>. Thank you.

Jay Olson: And finally, a third arm will evaluate Nectar 255 as a monotherapy for non-Hodgkin's lymphoma patients who have previously progressed following approved CD19 CAR-T cell therapy. And also at ASH, researchers from the Fred Hutchinson Cancer Research Center will present initial data from safety and pharmacodynamic analysis of CAR-T cell persistence after treatment with Nectar 255. Although preliminary, these data provide promising safety and tolerability, and also evidence of CAR-T cell rescue after treatment with Nektar 255, showing the potential of using Nektar 255 to enhance the proliferation of CD8 T-cells and therefore prolong the persistence of CAR-T cell therapy.

Jay Olson: And let's turn now to our immunology program, Nectar 358. As Howard said earlier, we are very pleased with the broad scope of development and overall advancement of the Nektar 35A program being executed by our partner, Eli Lilly. 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.

But the overall insensitivity is.

Is very different and as a reminder, for example to the results to be already published for a melanoma cohort with at 29 month follow up was a overall response rate of 53% and a complete was phone trade 34%.

Jay Olson: And with Nectar 358 our goal is to address these Treg abnormalities and to develop an IL-2-like molecule that could selectively stimulate Tregs in a more effective manner than low-dose IL-2. Lilly is conducting two Phase II studies, one in lupus and one in ulcerative colitis. Lily also continues to advance two separate Phase 1B studies in psoriasis and atopic dermatitis. The Phase 2 lupus trial is progressing very nicely. As a reminder, 280 patients are being randomized to one of three doses of Nektar 358 or placebo administered every two weeks for a treatment period of 24 weeks.

And then.

Let's say the median change in the size of target patients was almost 80%.

So I think a very very different data set there.

Thank you.

Our next question comes from just the five from J P. Morgan Your line is open.

I am good afternoon. This is Daniel Princess stuff I think.

Question did I hear correctly bumped the chemo final veto even competed in mid 2022 with a prepared remarks and if so what do you have to boot you need to wait until that point to make a decision on the path forward.

Thanks, Daniel I'm Gonna ask Dmitri too sure it's thoughts on that Dimitri.

Oh, yeah. So that that's correct. We are expecting I would say the first say a full safety data set in the first if it could speed data in the middle of 20 twenty-two looking at that data of course will be critical for informing our phase III strategy, but I say also said, we do have a lot of data already form propel and it sounds.

Jay Olson: The primary endpoint is the percentage of patients achieving at least a four-point reduction in the SLE, Disease Activity Index, or the SLEDI scale. Standard clinical composite endpoints used in lupus studies, including BCCLA, are also included in the secondary endpoints.

Pink there'll be analyzing more so in the meantime, we'll be working with different let's say plants moving forwards and then used to final data on the chemotherapy culmination to flush out the strategy.

Jay Olson: We expect the study to be completed within the next 12 to 18 months. Earlier this year, Lilly began enrolling patients in a Phase II randomized placebo-controlled trial in patients with ulcerative colitis. The study will evaluate multiple dose levels during the initial induction period using an adaptive design.

Thank you. Our next question comes from Greg Harrison from Bank of America. Your line is open.

<unk>.

Hey, guys. Thanks for taking the question of what steps are you taking at this point to to start preparing for Bempeg launch given the best case scenario could put it on the market in in about a year.

Jay Olson: Total enrollment is planned to be 200 patients, and the trial endpoint is the percentage of patients with clinical remission after induction treatment at 12 weeks. In addition, Lilly is planning to continue to grow the development program for Nektar 358. There are plans for two additional Phase 2 studies to be initiated in new indications in the near future. And finally, we look forward to potential presentations from the Phase 1b work ongoing in psoriasis and atopic dermatitis, with data from at least one of these studies to be presented at a medical meeting in the next year.

I'm Gonna ask Gill to answer that question.

Thanks for the question Greg Yeah. We're we're taking a number of stuff is Howard sudden his opening remarks with due to come in the first part of 22, we could have commercial launches early as the end of 2022.

So we've been working together with our team and B M S to kind of stage appropriate wasted up all the infrastructure for distribution.

Patient support and all the things that go into having the drug available both in the U S and in Europe. So we feel like we're in a really good position. We made the right investments right stage appropriate investments that we've worked with Bristol to prepare for the lunch. So we we feel really good about the position that we're in as we get the date of next year.

Jay Olson: We are pleased with the commitment to Nektar 358 and their rapid advancement of the clinical development program and their desire to develop this agent very broadly in inflammatory and autoimmune diseases. And with that, I will turn the call over to Gil. Thank you, Jay-Z, and good afternoon, everyone.

Great. Thanks.

Thank you.

Our next question comes from Andy say, some William Blair. Your line is open.

Thank you for taking my question is so Demetrius just curious the company mentioned before that the FDA conducted an analysis basically looking at the depth of the spines correlating that was the durability of response.

Particularly for a tech point I O agents, just curious if that's kind of a trend that you saw oh, so with propel and maybe if you don't mind I I do have a question for Jay Z in particular to the Ash abstract about 255, you mentioned about the car T.

Gil Laboucherie: On today's call, I'll review our 2021 financial guidance, which includes a reduction in our full-year projected GAAP R&D expense and a commensurate increase in year-end cash position. We ended the third quarter in an exceptionally strong financial position with $955 million in cash and investments, and No Debt on the Balance Sheet. We now expect to end the year with over $800 million in cash and investments, an increase of $50 million from our prior guidance of $750 million.

Potential combination and kind of reactivation is the court T cells. Just curious if you have any type of offices about the optimal temporal.

Ministration of 255 to really.

Maximize this response.

Alright, Thank sandi J Z I'm Gonna ask you to take the 255 question first and then Dmitri if you can address Andes question about depth of response correlating with other metrics.

Glad J D.

Yeah, Thanks, and and thanks for the question Yeah. So so one of the things that we've observed if you recall going back to the preclinical studies is that M. A M and animals, where we gave the same you know C. D 19 car. That's used you know and it does it proved agent that the application of Victor 255.

Gil Laboucherie: Our full-year GAAP Revenue Guidance is unchanged at approximately $100 million and includes $15 to $20 million of product sales and $80 to $85 million of non-cash royalty. Our guidance for full-year GAAP R&D expense is now anticipated to be between $400,000 and $25,000. $430 million. Our registrational trials for BEMPEG are on track, with enrollment for first-line metastatic melanoma, RCC, and bladder studies all completed

Could induce a persistence.

Of those cells and the net effect of that wasn't just an increase of phone numbers with time, but also with an increased efficacy in regards to the tumor killing potential of themselves and so that was the preclinical round and what we did in this ongoing <unk> study is we allowed patients that had a suboptimal response to Carter.

Gil Laboucherie: And we are very pleased with the pace of enrollment in the adjuvant study and that enrollment is now open for head and neck. Our R&D expense guidance includes approximately $85 million of non-cash expenses arising from stock compensation, depreciation, and the expenses related to the head and neck cancer study that is being funded by SFJ. Our G&A expense guidance is still projected to be between $120 and $125 million and includes $35 million of non-cash depreciation and stock compensation expense.

So essentially like a car to your failure patients that did not have those durable see ours to also be enrolled into that study.

And then we treated them with nectar 255 as you know it was one of the patient populations and so we have a number of patients in the study.

That our posts Carty and it since the last year of 2020 remember we showed one example of a case study where one of these patients had taken a car T therapy for months prior before beginning treatment with an extra 255 and that patient saw a increase in the amount of car T cells after application.

Asian of an extra 255, so we're very excited to extend those observations that ash. This year. We now have more patients uhm you know additional patients that have been enrolled that I've been treated with 255 and so we have many more patients to add to that analysis and the post card T setting.

Gil Laboucherie: Our non-cash interest expense is expected to be between $50 and $60 million, arising from the previously completed monetization of our royalty. Additionally, our non-operating expense includes approximately $15 million for the accounting of the contingent success-based payments to SFJ as a derivative liability.

So that's been a very exciting exciting thing in a unique niche as you know in the treatment landscape for these patients and then to your other part of your question, which is the temper on this you know that that's very much something that we're thinking about you know very very deeply obviously in this setting and this first and human study we're treating pace.

Operator: And with that, we will open the call for questions. Operator. Thank you. And as a reminder, to ask a question, you need to press the star and then one on your telephone. To withdraw your question, please press the pound key. And, in the interest of time, we do ask that you please limit yourself to one question at this time. And our first question comes from Chris Shibutani of Goldman Sachs. Your line is open. Hi, this is CJ Zafon for Chris Tonight.

Instead of a car T failure, so they're coming in you know well after cartoon setting, but as we advanced nectar 255 in a car T combination you know or even other cell therapies, we're actually very actively I'm exploring the kind of temporal dosing.

Relative to the two agents with each other we have a lot of preclinical data that gives us an understanding of that by just both sequencing in time intervals between doses and then that's the kind of thinking that will put in to the the study going to do that.

CJ Zafon: Thanks for the update on the Propel data. Just to be clear, it sounds like you are not advancing the doublet for Pembro based on the data as a chemo-sparing option. And then when do you think we will be able to see a first look at some of those chemo cohorts that are going to be starting soon?

The.

Thanks, Andy Thanksgiving Thanksgiving.

Thanks, Jasey Dmitri can you take Andy's question on correlation of depth of response with other.

Ah the clinical benefit and lung cancer absolutely.

Jennifer Ruddock: Hi CJ, it's Jennifer. I'm going to ask Dimitri to answer those two questions.

Yeah. Thank you for the question assist state it to F. D. A has done extensive analyses to correlate let's say these these end points and to make the point that.

Dimitri Noyton: Did you have another part? Sorry. No, that was it. Thanks. Okay, great. Thank you. Dimitri. Hi, thanks.

They say the quality of response issue very important metric that that's one of the reasons why it's something we'd be carefully analyzing our data and then number of statements that I made about it but the depth of responses. We've seen the number of Cr's then a number of patients who have 100 per cent tumor volume production in their target Leach.

Dimitri Noyton: Hi, thanks for the question. We just received the final data from the independent report on Propel in the past week, so we do need additional time to review the data in more detail. There will also be continued follow-up on 15 patients still on treatment in the study, as well as, let's say, the generation of data for PEMPEC plus Pembrolizumab and chemotherapy. And so with this totality of the data, we will be, let's say, making a fully informed decision about the lung cancer strategy.

<unk>. So they are partial responders, if they still have a target nation.

But that hasn't completely disappeared, but obviously that's also a much deeper response and someone with with lower volume reduction.

So that those are the things we know that's why we are excited about a number of findings need to trial I can concretely answer your question with the note that needless to say that our study would be immature for four O four survival kit from the amount of a follow up and just like that the medium hasn't been reached but in a say highly explorer.

Dimitri Noyton: We have a number of very interesting observations from ProPEL, especially on the metrics, which are difficult to find evidence for in non-small cell lung cancer, the depth of response that we observed, and we want to make sure we leverage PEMPEX advantages in our development plan. We are currently very focused on chemotherapy combination options in low expressors because the chemotherapy backbone is the appropriate regulatory path for these patients as standard of care.

<unk> analysis, given the time of where we are going to trial, which <unk> relatively short photo of course your vehicle.

We do see let's say a trend in the right direction with a coordination for the desktop response for both P. S. S. N O S and again I would like to emphasize within a small trial and they may just full of all parties need. This is a X trickling extra oratory analysis, but we are able to cheat as correlation.

Dimitri Noyton: As you know, there have been several Phase III filias recently in this space, even within the last 30 days, and many, several of them before us. Recently, a chemo-sparing treatment option from ECI's Phase III, the LEAP-7 trial, evaluating pembrolizumab from fentanyl in patients with greater than 1% expression. This study was discontinued early at the DMC review for, let's say, interim analysis by the DMC, and we know these results will be presented at ESMO-IO, so we definitely want to look at that data in detail.

Thank you and I am showing no further questions from us online and I'd like to turn the conference back over to Howard Robin for any clothes at Walmart.

Well. Thank you everyone for joining us one day and we're certainly approaching a very busy unexciting theory for Neckar. We hope you can join us sparkles around sexy and asthma, Oh date of presentation and we're looking ahead to the Registrational readouts for Bempeg, beginning with the highway anticipated melanoma data.

Dimitri Noyton: They're also running a chemotherapy combination trial known as the LEAP-6 trial, and we are expecting results next year. Secondly, Novartis just announced a Canopy1 trial, which was evaluating pembrolizumab plus IL-1 beta inhibitor canicunumab plus chemotherapy versus pembrolizumab chemotherapy, and the study was announced as not meeting primary endpoints of OS and PFS, both in squamous and non-squamous, but Novartis noted that there were, say, clinically meaningful improvements in a number of subsets, so that's something we definitely want to look at, but combining, let's say, my answer and going back to the core of your question, we are most interested in the chemotherapy combination option in low expressers as a platform.

In the early part of next year I'd like to thank all of employees for their efforts in helping us she.

These milestones throwing is very very challenging period, and I want to thank our shareholders for their continued support we look forward to providing you with updates on our progress. So please stay tuned thanks very much.

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

[music].

Operator: Our next question comes from Jay Olson from Oppenheimer. Your line is open. Oh, hey, thank you for taking the questions and thanks for the update on the PROPEL study. Could you share with us any potential read-across you may have from your initial learnings after looking at that data, any potential read-across to other studies for BEMPEG? Thank you.

Jay Olson: Thanks, Jay. Dimitri, would you like to answer that question?

Jennifer Ruddock: I think the read-through to other tumor types would be limited for now. I think the positives that we can see are some of the positives we have seen.

Dimitri Noyton: What we know, BEMPEC can deepen responses and generate CRs, but I think we have to be careful in translating results from one tumor type to the other tumor types. Non-small cell lung cancer and melanoma, for example, are very different. As I stated on the call, melanoma is a very immune-sensitive tumor. Well, we know that non-small cell lung cancer is not as immune-sensitive and traditionally has always been treated by chemotherapy, and even now, chemotherapy is still the backbone of treatment in the majority of patients.

Dimitri Noyton: On the other hand, if you look at melanoma, there is a significant, tremendous, predictable history of IO agents performing very well. IL-2 itself has been approved in melanoma, and prior to the development of IO agents, mostly notably checkpoint inhibitors over the last years, chemotherapy in melanoma specifically was really an inferior treatment option, while chemotherapy has been a viable option for non-small cell lung cancer So we are really looking at these two different tumor types in two different settings.

[music].

Dimitri Noyton: And let's say with the PROPEL data, of course, we are looking at the ability of PEMPEC to drive deep and durable responses so that that's something that might translate as a general mechanism, but the overall immune sensitivity is very different. And as a reminder, for example, the results that we already published for our melanoma cohort with a 29-month follow-up were an overall response rate of 53% and a complete response rate of 34%, and then let's say the median change in the size of target lesions was almost 80 percent. And so I think it is a very, very different data set there.

Operator: Thank you. Our next question comes from Jessica Fye from J.P. Morgan. Your line is open. Hi, good afternoon. This is Daniel on behalf of Jessica Fye.

Daniel: Thanks for taking our question. Did I hear correctly that the chemo final data is anticipated in mid-2022 in the prepared remarks? And if so, will you have to, will you need to wait until that point to make a decision on the path forward?

Daniel: Thanks, Daniel. I'm going to ask Dmitry to share his thoughts on that. Yes, so that's correct.

Dimitri Noyton: Yeah, so that's correct. We are expecting, I would say, the first full safety data set and the first efficacy data in the middle of 2022. Looking at that data, of course, will be critical for informing our phase three strategy. But as I also said, we do have a lot of data already from Propel, and that's something we'll be analyzing more. So in the meantime, we'll be working on different, let's say, plans moving forward, and then we will use the final data on the chemotherapy combination. [inaudible] Thank you. Our next question comes from Greg Harrison from Bank of America. Your line is open. Hey guys, thanks for taking the question.

Gregory Allen Harrison: I'm going to ask Gil to answer that question. Thanks, Greg. Thanks for the question, Greg. Yeah, we're taking a number of steps, as Howard said.

Gil Laboucherie: Thanks, Greg. Thanks for the question, Greg. Yeah, we're taking a number of steps, as Howard said in his opening remarks, with data coming in the first part of 2022, we could have a commercial launch as early as the end of 2022. So we've been working together with our team and BMS to... in stage-appropriate ways to set up all the infrastructure for distribution, you know, patient support, and all the things that go into having the drug available both in the U.S. and in Europe.

Gil Laboucherie: So we feel like we're in a really good position. We've made the right investments, the right stage-appropriate investments, and we've worked with Bristol to prepare for the launch. So we feel really good about the position that we're in as we get the data next. Great, thanks. Thank you. And our next question comes from Andy Shea from William Blair. Your line is open.

Andy Shea: Thank you for taking my questions. So, Dimitri, I'm just curious. The company mentioned before that the FDA conducted an analysis, basically looking at the depth of response, correlating that with the durability of response, particularly for TechPoint I.O. agents. Just curious, is that kind of a trend that you saw also with Propel? And maybe, if you don't mind, I have a question for Jay Z.

Andy Shea: In particular, in the ASH abstract about 255, you mentioned the potential combination and kind of reactivation of these CAR-T cells. Just curious if you have any hypotheses about the optimal temporal administration of 255 to really maximize this response.

[music].

Jay Olson: Great. Thanks, Andy. Jay-Z, I'm going to ask you to take the 255 question first, and then, Dimitri, if you can address Andy's question about the depth of response correlating with other members.

Jay Olson: Yeah, thanks. Hey, Andy, thanks for the question. Yeah, so one of the things that we've observed, if you recall, going back to the preclinical studies, is that in animals where we gave the same CD19 CAR that's used, you know, as an approved agent, the application of Nectar 255 could induce a persistent presence of those cells. And the net effect of that wasn't just an increase in cell numbers with time, but it was an increased efficacy in regards to And so that was the preclinical realm.

Jay Olson: And what we did in this ongoing HEIM study is we allowed patients that had a suboptimal response to CAR T, so essentially like a CAR T failure, patients that did not have those durable CRs to also be enrolled into that study. And then we treated them with Nektar 255 as, you know, one of the patient populations. So we have a number of patients in the study that are post-CAR T. And it's since the last year, it's 2020. Remember, we showed one example of a case study where one of these patients had received CAR T therapy four months prior before beginning treatment with Nektar 255, and that patient saw an increase in the amount of CAR T cells after application of Nektar 255. So we're very excited to extend those observations at ASH this year.

Jay Olson: We now have more patients, you know, additional patients that have been enrolled, that have been treated with 255. And so we have many more patients to add to that analysis in the post-CAR T setting. So that's a very exciting, exciting thing and a unique niche, as you know, in the treatment landscape for these patients. And then to your other part of your question, which is the temporalness, you know, that's very much something that we're thinking about, you know, very, very deeply. Obviously, in this setting, in this first in human study, we're treating patients that are CAR T failures. So they're coming in, you know, well after a CAR T setting.

Jay Olson: But as we advance Nektar 255 in a CAR T combination, or even other cell therapies, we're actually very actively exploring the kind of temporal dosing relative to the two agents together. We have a lot of preclinical data that gives us an understanding of that by just both sequencing and time intervals between doses, and then that's the kind of thinking that we'll put into the study when we do that. So, thanks, Andy. Thanks, Jay. Yeah, thanks, Jay-Z. Dimitri, can you take Andy's question on the correlation of depth of response? Other Clinical Benefits in Lung Cancer or Ulcerative Colitis?

Dimitri Noyton: Yes, thank you for the question. As you stated, FDA has done extensive analyses to correlate, say these endpoints and to make the point that they say the quality of response is a very important metric, that that's one of the reasons why it's something we carefully analyze in our data, number of statements I made about it, with the depth of responses we've seen, the number of CRs, then the number of patients who have 100% tumor volume reduction in their target lesions, so they are partial responders if they still have a target lesion that hasn't completely disappeared, but obviously that's also a much deeper response than someone with lower volume reduction.

Dimitri Noyton: So those are the things we know. That's why we are excited about a number of findings in the trial. I can't concretely answer your question with the note that, needless to say, our study would be immature for overall survival given the amount of follow-up and the fact that the median hasn't been reached. But in a, say, highly exploratory analysis given the time of where we are in the trial with the relatively short follow-up for survival, we do see, let's say, a trend in the right direction with a correlation And, again, I like to emphasize that within a small trial and limited follow-up, obviously, this is a strictly exploratory analysis, but we are able to see that correlation.

Operator: Thank you, and I am showing no further questions from our phone line. And I'd like to turn the conference back over to Howard Robin for any closing remarks. Well, thank you, everyone, for joining us today, and we're certainly approaching a very busy and exciting period for Nectar. We hope you can join us for our calls around the FTSE and ESMO I.O. data presentations, and we're looking ahead to the registrational readouts for BEMPEG, beginning with the highly anticipated melanoma data in the early part of next year.

Howard W. Robin: I'd like to thank all of our employees for their efforts in helping us achieve these milestones during this very, very challenging period. And I want to thank our shareholders for their continued support. We look forward to providing you with updates on our progress, so please stay tuned.

[music].

Operator: Thanks very much. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.

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