Q2 2022 Nektar Therapeutics Earnings Call

Good afternoon, and welcome to the nectar therapeutics second quarter Okay.

Good afternoon and welcome to the Nektar Therapeutics second quarter financial results conference call.

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I would now like to turn the conference over to Vivian Wu, from Nektar Investor Relations.

I would now like to turn the conference over to busy and woo from vector Investor Relations. Please go ahead.

Please go ahead.

Thank you, Chad.

Thank you Chad and good afternoon, everyone. Thank you for joining us today with us on the call are Howard Robin, our President and CEO , Dr. Jonathan <unk>, our chief up research and development Gil Thompson, our Chief Financial Officer, and Brian <unk>, Our Chief Medical Officer on today's call will be expect to make forward looking statements regarding our business include.

And good afternoon, everyone.

Thank you for joining us today.

With us on the call are Howard Robin, our President and CEO, Dr. Jonathan Zalevsky, our Chief of Research and Development, Jill Thompson, our Chief Financial Officer, and Brian Codson, our Chief Medical Officer.

On today's call, we expect to make forward-looking statements regarding our business, including statements regarding the therapeutic potential of and future development plans for drug candidates in research programs, the timing of the initiation of clinical studies and the availability of clinical data for drug candidates, the timing and plans for future clinical data presentations, the formation, future development plans, or success of our collaboration arrangements, the expectations arising from a corporate restructuring and reorganization process, financial guidance, and certain other statements regarding the future of our business. Because 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.

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 May 6, 2022, which is available at scc.gov.

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

Any statements regarding the therapeutic potential of and future development plans for our drug candidates and research programs. The timing of the intention initiation of clinical studies and the availability of clinical data for drug candidates, the timing and plans for future clinical data presentations information future development plans or see task.

Of our clinic collaboration arrangements.

The expectations are rising from a corporate restructuring and reorganization process.

Financial guidance and certain other statements regarding the future of our business because forward looking statements relate to the future theyre subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control.

Actual results may differ materially from these statements important risks and uncertainties are set forth in the Form 10-Q that was filed on May six 2022, which is available at S. P. C. Dot Gov. We undertake no obligation to update any of these forward looking statements whether as a result of new information future developments or otherwise a webcast of this call will be available.

A webcast of this call will be available, on the IR page of Nectar's website and nectar.com.

On the IR page of doctors website and Doctor Dot com.

Before turning the call over to Howard, I'd like to remind you again that since we're dialing in from different locations, I will be moderating the Q&A session for our team, so we can avoid technical issues during the session.

Before turning the call over to Howard I'd like to remind you again that since we're dialing in from different locations I will be moderating the Q&A session for our team. So we can avoid technical issues. During this session. We appreciate your patience with that I would like to hand, the call over to our president and CEO Howard Robin Howard. Thank you Vivian thanks to everyone for <unk>.

We appreciate your patience.

With that, I would like to hand the call over, to our president and CEO, Howard Robin.

Howard?

Thank you, Vivian.

Thanks to everyone for joining us today.

Joining us today.

Following the new strategic plan, and reorganization that we announced in April, I'm pleased to report that we've made great progress, in executing the plan over the last several months. Our accomplishments allow us to focus, on important biologic therapeutic candidates that we're developing at Nectar, and we believe that they present opportunities to create significant value for our shareholders over the coming years.

Following the new strategic plan and reorganization that we announced in April I'm pleased to report that we've made great progress in executing the plan over the last several months our accomplishments allow us to focus on important biologic therapeutic candidates that were developing a nectar and we believe that they present opportunities to create significant.

<unk> value for our shareholders over the coming years, our new strategic plan is built upon three core R&D pillars that we believe can generate value enhancing milestones for our company. There are $3 58, our T. Reg Stimulator program partnered with Eli Lilly being developed in multiple autoimmune diseases.

Our new strategic plan is built upon three core R&D pillars, that we believe can generate value-enhancing milestones for our company. Nectar 358, our Treg stimulator program, partnered with Eli Lilly, being developed in multiple autoimmune diseases.

Nectar 255, our novel wholly-owned IL-15 agonist, being developed in multiple liquid tumor settings, and several promising preclinical programs generated from our research in immunology and oncology.

$2 55, our novel wholly owned IL 15 agonist being developed in multiple liquid tumor settings, and several promising preclinical programs generated from our research in immunology and oncology.

Each of these programs represents a distinct, and highly promising opportunity to provide patients with scientifically distinct mechanisms across a range of therapeutic areas.

Each of these programs represents a distinct and highly promising opportunity to provide patients with scientifically distinct mechanisms or across a range of therapeutic areas.

Starting with Nektar 358, this novel first-in-class regulatory T-cell stimulator is being developed, to treat autoimmune and inflammatory conditions such as lupus and ectopic dermatitis.

Starting with nectar $3 58. This novel first in class regulatory T cell stimulator is being developed to treat autoimmune and inflammatory conditions, such as lupus and atopic dermatitis are.

A key focus of our new operating plan is to fund a 25% maximum development participation, in this important autoimmune program. This translates into a royalty for Nektar in the low 20% range.

A key focus of our new operating plan is to fund a 25% maximum development participation in this important autoimmune program.

This translates into a royalty for nectar in the low 20% range.

The decision was based on our belief in the science and in the promising data generated, to date for Nektar 358, as well as the sheer size of the markets that we're pursuing.

The decision was based on our belief in the science and in the promising data generated to date for an extra 358 as well as the sheer size of the markets that we're pursuing.

In the U.S. alone, nearly 160,000 people are battling lupus, and approximately 16 million, people are living with ectopic dermatitis, with three out of four of these affected by moderate or severe disease.

In the U S alone nearly 160000 people are battling lupus and approximately 16 million people are living with atopic dermatitis with three out of four of these affected by moderate.

Or severe disease.

And in these indications, where sales of current agents range from $12 to $15 billion, there is still a very high unmet medical need for patients.

And in these indications where sales of current agents range from $12 billion to $15 billion. There was still a very high unmet medical need for patients.

As a result, Nektar 358 is poised to be a significant value driver for our company, given its position as a potentially new mechanism for helping patients with lupus and ectopic dermatitis.

As a result negative 358 is poised to be a significant value driver for our company given its position as a potentially new mechanism for helping patients with lupus atopic dermatitis and Louis has indicated it will also pursue another phase two study and are yet to be announced autoimmune indication, which could potentially start.

And Lilly has indicated it will also pursue another phase two study in a yet-to-be-announced, autoimmune indication, which could potentially start in 2023.

In 2023.

The phase two study in lupus has completed enrollment, and we're looking forward to, data from this study in the first half of 2023. This will be the first phase two data for Nektar 358, and if we're successful, could, lead to a phase three program in lupus shortly thereafter.

The phase two study in lupus has completed enrollment and we're looking forward to data from this study in the first half of 2023. This will be the first phase two data for an extra $3 58, and if we're successful could lead to a phase III program and lupus shortly thereafter.

In May, the study successfully passed an interim analysis based upon 60% of patients, and we, are particularly pleased that the study is continuing as planned with no modifications.

In May the study successfully passed an interim analysis based upon 60% of patients and we are particularly pleased that the study is continuing as planned with no modifications.

Brian will provide further details on our continued clinical progress and the timing, of upcoming data readouts in a few minutes.

Ryan will provide further details on our continued clinical progress and the timing of upcoming data readouts in a few minutes.

Our IL 15 agonist program in oncology.

Our IL-15 agonist program in oncology, Nektar 255, is also advancing well.

Next are $2 55 is also advancing well our new strategic plan focuses on our near term development strategy that prioritizes the biggest opportunities for development such as the major emergence of the field of cell therapy.

Our new strategic plan focuses on a near-term development strategy that prioritizes the, biggest opportunities for development, such as the major emergence of the field of cell therapy.

Jay-Z will discuss Nektar 255 in detail later in the call, along with a review of our new, research programs. But I'd like to highlight a few key accomplishments from the second quarter. First, our partner, Merck KGA, initiated the Javelin Bladder Metally Study, which incorporates, Nektar 255 with a Velumab in the maintenance bladder setting.

Jay Z will discuss next are $2 55 in detail later in the call along with a review of our new research programs, but I'd like to highlight a few key accomplishments from the second quarter.

First our partner Merck K G. A initiated the javelin bladder mentally study, which incorporates nectar $2 55, with avella mab and the maintenance bladder setting.

This is a setting where a Velumab is approved and currently has annual sales of approximately, $500 million.

This is a setting where avila mab is approved and currently has annual sales of approximately $500 million. We're highly encouraged that Merck shares our enthusiasm for nectar $2 55, and its potential to help bladder cancer patients in.

We're highly encouraged that Merck shares our enthusiasm for Nektar 255 and its potential, to help bladder cancer patients.

In the registrational study of a Velumab, patients with higher levels of natural killer, cells had better outcomes when treated with a Velumab in the maintenance setting.

In the Registrational study of Avila Mab patients with higher levels of natural killer cells had better outcomes when treated with the Villa mab in the maintenance setting. Therefore, the addition of an NK mobilizing agents, such as nectar or $2 55 to Avila Mab makes a lot of sense.

Therefore, the addition of an NK mobilizing agent, such as Nektar 255, to a Velumab makes, a lot of sense.

We're also planning a highly focused strategy for next or $2 55 and cell therapy. Our primary goal. Initially is a nectar sponsored phase two study to combine <unk> 255 with approved autologous car T therapies is Carter and <unk> in diffuse large b cell lymphoma.

We're also planning a highly focused strategy for Nektar 255 in cell therapy.

Therapy.

Our primary goal initially is a Nektar-sponsored Phase II study to combine Nektar-255 with, approved autologous CAR-T therapies, Iscarta and Bray-Unzi, in diffuse large B-cell lymphoma.

Growth of these agents has been significant following their approvals in the second-line, DLBCL setting, and revenues for these agents in second and third line is expected to grow to a combined $3 billion or higher.

Growth of these agents has been significant following their approvals in <unk> in the second line D. L. P. C O setting and revenues for these agents in second and third line is expected to grow to a combined $3 billion or higher.

By including multiple approved therapies in our study, our goal is to position Nektar-255, as a cell therapy potentiator of choice that could provide patients with better and more durable responses.

By including multiple approved therapies in our study our goal is to position Nektar $2 55, as a cell therapy potentiate or of choice that could provide patients with better and more durable responses.

We ended the second quarter with approximately $625 million in cash and importantly, our new plan enables us to have a cash runway through the first half of 2025, we do not anticipate a need to raise capital during this period.

We ended the second quarter with approximately $625 million in cash, and importantly, our, new plan enables us to have a cash runway through the first half of 2025. We do not anticipate a need to raise capital during this period.

This is paramount to our business because, as you know, capital is scarce in today's, biotech market.

This is paramount to our business because as you know capital is scarce in today's biotech market our unique position in this sector gives us the financial strength to execute on the new strategic plan and drive our key programs forward to value generating data and milestones.

Our unique position in this sector gives us the financial strength to execute on the new, strategic plan and drive our key programs forward to value-generating data and milestones.

I will now turn the call over to Brian to provide an update on Nektar-358.

I will now turn the call over to Brian to provide an update on nectar 358, Brian .

Brian?

Thank you, Howard.

Thank you Howard.

Nektar-358 is a unique molecule, and I am truly excited about the work we are doing, on this important first-in-class mechanism in the field of autoimmune disease.

<unk> 358 is a unique molecule and I am truly excited about the work we are doing in this important first in class mechanism in the field of autoimmune disease Lilly.

Lilly recently received approval for the generic name for Nektar-358, which is respegaldysleucan, or RESPEG for short.

Lilly recently received approval for the generic name for Nektar 358, which is rez pegged Aldis Lucan, our Reds peg for short.

We're excited to see Lilly's continued enthusiasm for this program, and I personally look, forward to continuing to work with the Lilly team to support the advancement of this program.

We're excited to see Lilly's continued enthusiasm for this program and I personally look forward to continuing to work with the Lilly team to support the advancement of this program.

With three five day, we've utilized a completely different approach with our pegylation chemistry to capture the immune regulating potential of vial to buy specifically stimulating regulatory T cells or T regs.

With Nektar-358, we've utilized a completely different approach with our pegylation chemistry, to capture the immune-regulating potential of IL-2 by specifically stimulating regulatory, T cells, or Tregs. Our goal with this program is to address the underlying Treg abnormalities in autoimmune, disease and to develop an IL-2-like molecule that could selectively stimulate Tregs in a more effective manner than low-dose IL-2.

Our goal with this program is to address the underlying T. Reg abnormalities in autoimmune disease and to develop an IL two like molecule that could selectively stimulate T regs in a more effective manner than low dose IL two.

The data that emerged from the program in both lupus and in atopic dermatitis have reinforced, our conviction in this approach. In a phase 1b multiple ascending dose study comparing RESPEG to placebo in lupus patients, RESPEG led to a dose-dependent reduction in lupus skin disease activity as measured by the CLASI activity score in the subset of 22 patients with baseline CLASI score greater than or equal to 4.

The data that emerged from the program in both lupus and in atopic dermatitis have reinforced our conviction in this approach in the phase one be multiple ascending dose study comparing rents pegged to placebo in lupus patients rents pegged led to a dose dependent reduction in lupus skin disease activity as Meg.

<unk> by the clouds, the activity score and the subset of 22 patients with baseline <unk> score of greater than or equal to four these data along with the PK PD and safety information we collected in our phase wouldn't be lupus trial led Lilly launching a phase two dose range finding study.

These data, along with the PK, PD, and safety information we collected in our phase 1b lupus, trial, led Lilly launching a phase 2 dose range-finding study in 280 patients. As a reminder, the phase 2 study compares several doses of Nectar 358 to placebo for, a 24-week treatment period.

And 280 patients as a reminder, the phase II study compare several doses of <unk> three five day to placebo for a 24 week treatment period.

As Howard mentioned, in May, the Interim Assessment Committee reviewed interim efficacy and safety, data from the phase 2 lupus study. The committee looked at data from approximately 60% of patients who completed the 24-week, treatment period.

As Howard mentioned in May the interim assessment Committee reviewed interim efficacy and safety data from the phase two lupus study the.

The committee looked at data from approximately 60% of patients who completed the 24 week treatment period, we were excited to find out that the interim assessment Committee had recommended that the study continue to completion without modification.

We were excited to find out that the Interim Assessment Committee had recommended that, The study is now fully enrolled, and we were on track to report data from this study in the first half of 2023.

The study is now fully enrolled and we were on track to report data from this study in the first half of 'twenty 'twenty three.

In December of 'twenty, 'twenty, one Lilly announced the first initial proof of concept data in the second Dermatologic disease, we are pursuing with rez peg and moderate to severe atopic dermatitis. The 12 week phase one B study conducted by Lilly tested two doses of <unk> pegged compared to placebo.

In December of 2021, Lilly announced the first initial proof-of-concept data in the second, dermatologic disease we are pursuing with ResPeg in moderate to severe atopic dermatitis. The 12-week Phase 1b study conducted by Lilly tested two doses of ResPeg compared to placebo, and then followed patients for 36 additional weeks after the last dose of therapy. Treatment with ResPeg showed a dose-dependent reduction in the eczema area and severity, index scores in patients, also known as the EASY score, with approximately a 70 percent reduction in scores at week 12 at the highest dose tested.

And then followed patients for 36 additional weeks after the last dose of therapy.

Treatment with Reds pegs showed a dose dependent reduction in the eczema area and severity index scores in patients also known as the easy score with approximately a 70% reduction in scores at week 12 at the highest dose tested.

The activities seen at 12 weeks of treatment with ResPeg is in line with the activities, seen after 16 weeks of treatment with Dupixent, the current standard of care.

The activities seen at 12 weeks of treatment with Reg Peg is in line with the activities seen after 16 weeks of treatment with the pixel <unk>. The current standard of care, but clearly the most fascinating observation from the study was that when we looked at patients 36 weeks. After we stopped dosing rez pegged their skins court.

But clearly, the most fascinating observation from the study was that when we looked at, patients 36 weeks after we stopped dosing ResPeg, their skin scores remained very low and in fact dropped even further during this extended period, an effect not observed with, Dupixent. This has led us and Lilly to be very enthusiastic about the potential for durability with ResPeg, in the setting of atopic dermatitis.

Remained very low and in fact dropped even further during this extended period in effect not observed with depiction.

This has led to us and Lilly to be very enthusiastic about the potential for durability with resin pegged in the setting of atopic dermatitis.

The full efficacy and safety data from this Phase 1b study will be presented at the 2022, EADV European Dermatology Meeting next month.

The full efficacy and safety data from this phase once.

Phase one B study will be presented at the 2022 E. A D V European Dermatology meeting next month.

In addition to the ongoing Phase 2 lupus study, we are collaborating closely with Lilly on, the design of a Phase 2 study in patients with atopic dermatitis.

In addition to the ongoing phase two lupus study, we are collaborating closely with Lilly on the design of a phase two study in patients with atopic dermatitis.

Lilly will be sponsoring and executing this study. This will be a relatively large placebo-controlled study, and we expect the design of the study, to be completed around the end of the year with a study start in the first half of 2023.

Lilly will be sponsoring in executing this study this will be a relatively large placebo controlled study and we expect the design of the study to be completed around the ended the year with the study start in the first half of 'twenty to 'twenty three.

Lilly is also planning another Phase 2 study in a yet-to-be-announced autoimmune indication, which we hope to unveil in the first half of 2023.

Lilly is also planning another phase II study in a yet to be announced autoimmune indication, which we hope to unveil in the first half of 'twenty 'twenty three.

As you can see, we have important data readouts in the next 12 months, and we are looking, forward to the continued collaboration with Lilly.

As you can see we have important data readouts in the next 12 months and we are looking forward to the continued collaboration with Lilly.

And with that I'll hand, the call over to Jay Z to discuss next are 255, and our preclinical programs.

And with that, I'll hand the call over to Jay-Z to discuss Nectar 255 in our preclinical, programs.

Jay-Z?

Jay Z.

Thanks, Brian.

Let me begin today with an update on our Nectar 255 program. Our therapeutic candidate, Nectar 255, is an agent that engages the full biology of, the IL-15 pathway to provide functional activation and homeostatic control of IL-15 responses of immune cells, namely natural killer cells, CD8 T cells, and immune memory subsets. Now, as a full agonist of the IL-15 pathway, Nectar 255 can be combined with multiple mechanisms, ranging from targeted agents to cell therapies, including CAR-Ts, and even immunological checkpoints to potentially improve the efficacy of these agents.

Thanks, Brian .

Let me begin today with an update on our next year to five five program.

Our therapeutic candidate an extra 255 is an agent that engages the full biology of the IL 15 pathway to provide functional activation and homeostatic control of IL 15 responses of immune cells, namely natural killer cells, CDA T cells and immune memory subsets.

Now as a full agonist of the IL 15 pathway.

255 can be combined with multiple mechanisms ranging from targeted agents to cell therapies, including car Ts and even immunological checkpoints to potentially improve the efficacy of these agents.

In our early dose escalation work with Nectar 255, we have observed a consistent increase, of natural killer cells, as well as CD8 T cells across multiple tumor types, including multiple myeloma, non-Hodgkin's lymphoma, colorectal cancer, and head and neck cancer.

In our early dose escalation work with Nektar to five five we have observed a consistent increase of natural killer cells as well as CDA T cells across multiple tumor types, including multiple myeloma, non hodgkin's lymphoma, colorectal cancer and head and neck cancer.

Cancer.

We have seen up to a nine fold increase in NK cells and a pharmacokinetic profile is highly predictable, allowing us to dose negative five five every three or four weeks and.

We have seen up to a nine-fold increase in NK cells, and our pharmacokinetic profile, is highly predictable, allowing us to dose Nektar 255 every three or four weeks.

And importantly, we see increases in NK and CD8 T cells in even the most difficult-to-treat, patients, including multiple myeloma patients with compromised bone marrow, and no increase of T regulatory cells in the peripheral blood, which is another very important attribute of Nektar 255.

And importantly, we see increases in NK, and CDA T cells, and even the most difficult to treat patients, including multiple myeloma patients with compromised bone marrow.

And no increase of T regulatory cells in the peripheral blood, which is another very important attribute of an extra two pi pi.

In April, we unveiled that our new development plan for Nektar 255 is focused on key areas, of differentiation and strength for the development of an IL-15 candidate. Additionally, our plan includes leveraging external collaborations with partners to generate, proof-of-concept data. The first area of focus for our development work is being conducted by our collaborators, who are combining Nektar 255 with anti-PD-L1 agents.

In April we unveiled that our new development plan for next year 255, and focused on key areas of differentiation and strength for the development of an IL 15 candidate.

Additionally, our plan includes leveraging external collaborations with partners to generate proof of concept data.

The first area of focus for our development work is being conducted by our collaborators who are combining nektar 255 with anti PD L. One agents.

This past quarter, Merck, Hey, Jay initiated the javelin bladder medalist study.

This past quarter, Merck KGA initiated the Javelin Bladder Medley Study. This phase two, randomized, open-label study will compare avilumab combinations with three, anti-tumor agents, Nektar 255, Fidelity, and one of Merck's own anti-TIGIT therapeutic candidates in the setting of maintenance treatment for bladder cancer in patients whose disease did not progress following a platinum regimen.

This phase two randomized open label study will compare of Allomap combinations, but three anti tumor agents.

255.

Fidelity and one of merck's own anti pigeon therapeutic candidates in the setting of maintenance treatment for bladder cancer in patients whose disease had not progressed following a platinum regimen.

As Howard stated earlier, avilumab is annualizing at about a $500 million revenue run rate in, this setting.

As Howard stated earlier as Bela MAF and Annualizing at about a $500 million revenue run rate in this setting we.

We see significant potential for Nektar 255 in this setting. In the Javelin Study, the Nektar 255 arm will be compared against avilumab monotherapy.

We see significant potential for Nektar 255 in this setting.

And the javelin study.

The next three to five five arm will be compared against with Allomap monotherapy.

The study plans to recruit a total of 252 patients, 72 patients for each of the combination, arms, including Nektar 255, and 36 patients for the avilumab barotherapy arm.

The study plans to recruit a total of 252 patients.

72 patients for each of the combination arms, including Mexico 255.

And 36 patients for the Bela MAF Barbara therapy arm.

The Javelin Study has a primary endpoint of progression-free survival and should provide, us with clear comparative proof-of-concept data in these patients. In the Registrational Javelin Bladder 100 Trial in this same patient population, the, PFS reported for avilumab plus best supportive care was 3.7 months.

One study has the primary endpoint of progression free survival and should provide us with clear comparative proof of concept data in these patients.

And the Registrational javelin bladder 100 trial in the same patient population. The PFS reported four of Allomap plus best supportive care was 3.7 months.

The study also gives Nektar 255 a possible path in the future registrational trial in, this setting based upon the strength of the data generated in this Phase II study.

The study also gets netted to five five a possible path in the future Registrational trial in this setting based upon the strength of the data generated in this phase two study.

We expect the first potential data from this Phase II study in late 2024.

We expect the first potential data from this phase II study in late 2024.

But the reason we are very excited about this study because unlike all other PD one checkpoint inhibitors for Bela MAF is an I G. G. One monoclonal antibody directed to PD L. One.

But the reason we are very excited about this study is because unlike all other PD-1 checkpoint, inhibitors, avilumab is an IgG1 monoclonal antibody directed to PD-L1. And as an IgG1, it contains an FC region that can bind to receptors on immune effector cells, and act as a bridge to induce ADCC-mediated tumor cell lysis. All other antibodies directed to PD-1 and PD-L1 lack the ability to trigger antibody-dependent, cellular cytotoxicity because they harbor a mutated FC region or belong to the IgG4 subclass.

And as an IGT want it contained an FC region I can bind to receptors on immune effector cells and act as a bridge to induce a D. C C mediated tumor cell license.

All other antibodies directed to PD, one and PDL, one lack the ability to trigger antibody dependent cellular cytotoxicity, because they harbored mutated FC region or belong to the IGD for subclass.

The scientific hypothesis is that Nektar 255 will synergize with avilumab by both generating, cytotoxic CDA effector, a memory cell, as well as by generating NK cells to enhance the unique ADCC effect of avilumab. With this dual mechanism of action, augmenting the immune response and triggering ADCC, our, unique combination has the capability to engage both the innate and adaptive immune response.

The scientific hypothesis is that magnitude five five will synergize with development by both generating cytotoxic CD eight factor memory cell as well as by generating NK cells to enhance the unique ADC see effect of development.

With this dual mechanism of action and mentoring the immune response and triggering a D. C. Our unique combination has the capability to engage but the innate and adaptive immune response.

Our second study of an extra 255 combined with an anti PD one agent as a single site collaboration trial being conducted at MD Anderson Cancer Center in the clinic, a doctor's Stephen Len.

Our second study of Nectar 255 combined with an anti-PD-L1 agent is a single-site collaboration, trial being conducted at MD Anderson Cancer Center in the clinic of Dr. Stephen Lin. The study, which plans to enroll 30 patients, will combine Nectar 255 with Dervalumab, also, known as Insensi, in its approved indication of stage 2 to stage 3 non-small cell lung cancer following chemoradiation.

The study, which plans to enroll 30 patients will combine neck there to five five with development also known as Infinity.

And its approved indication of stage two to stage III non small cell lung cancer following chemo radiation.

And this is important because we know that many of these patients experienced lymphopenia following chemo radiation and this is associated with inferior progression free survival.

This is important because we know that many of these patients experience lymphopenia following, chemoradiation, and this is associated with inferior progression-free survival. With the addition of an IL-15 stimulatory mechanism, we believe we have the opportunity, to overcome this effect.

With the addition of an IL 15 stimulatory mechanism. We believe we have the opportunity to overcome this effects.

The study will assess activity of the doublet, and we expect the initial data in early 2024.

The study or the activity of the doublet and we expect the initial data in early 2024.

Yeah.

The second area of focus for our development work is to pursue Nectar 255 as a cell therapy, potentiator in the broad and developing landscape of cell therapy.

The second area of focus for our development work is to pursue neck or to buy fiber to cell therapy potentially later in the broad and developing landscape of cell therapy.

Since their first approvals in 2017, usage of chimeric antigen receptor T-cells, or CD19, CAR-T therapy, has grown significantly in the B-cell lymphoma treatment landscape.

I think their first approvals in 2017 usage of Comerica antigen receptor T cells or CD 19 car T therapy has grown significantly in the T cell lymphoma treatment landscape.

Although these therapies offer great treatment benefits for those DL-BCL patients who fail, first- or second-line treatments, clinical responses to CAR-T tend to relapse over time for many patients.

Although these therapies offer great treatment benefit for those D. L. D C L patients, who fail first or second line treatment.

Critical responses to the car T tend to relapse overtime for many patients.

So there is both a high unmet need to provide an extended duration of response, as well, as to drive to a higher frequency of complete responses. Preclinical data generated with the Fred Hutchinson Cancer Center has demonstrated the promise, of combining Nectar 255 with CD19-targeted CAR-T cell therapy. At ASH 2019, the addition of Nectar 255 to a CD19-targeted CAR-T cell regimen preclinical, models of B-cell lymphoma was shown to increase survival of CAR-T cells and reduce tumor growth as compared to either treatment alone.

So there is both a high unmet need to provide an extended duration of response as well as to drive to a higher frequency of complete responses.

Preclinical data generated with the Fred Hutchinson Cancer Center has demonstrated the promise of combining connector to five five with CD 19 targeted car T cell therapy.

And Ash 2019, the addition of neck or two by five to the CD 19 targeted car T cell regimen in preclinical models of B cell lymphoma.

As shown to increase survival of car T cells, and reduced tumor growth as compared to either treatment alone.

And at EHA 2019, researchers showed that in vivo treatment with Nectar 255 and CAR-T cells, resulted in rejection of a tumor rechallenge.

And then E. J 2019, researchers showed that in vivo treatment with Nektar 255, and car T cells resulted in rejection of a tumor re challenge.

But based on these findings, as well as data that we presented at ASH last year in relapsed, patients, which showed an increase in baseline CAR-T cell levels after Nectar 255, and as Howard said earlier, we are highly focused on initiating a Nectar-sponsored study of, Nectar 255 combined with approved CAR-T therapy.

Based on these findings as well as data that we presented at Ash last year in relapsed patients, which showed an increase in baseline car T cell levels after an extra 255 and.

And as Howard said earlier, we are highly focused on initiating a nectar sponsored study of <unk> two pie five combined with approved car T therapy.

The goal of this study is to generate comparative data with Nectar 255 with CAR-T versus placebo, plus CAR-T in this setting.

The goal of this study is to generate comparative data with vector to pie five with car T versus placebo plus car T. In this setting.

And our work here could enable future potential registrational trials.

And our work here could enable future potential registrational trial.

Since our announcement in April, we have held an advisory clinical board meeting to discuss, the role of Nectar 255 with CAR-T therapies and to discuss the study design. We left that meeting with a lot of enthusiasm from the investigators, and we are on track, to complete the study design and initiate the study by the first quarter of 2023.

Since our announcement in April we upheld in advisory clinical board meeting to discuss the role of vector to five type of car T therapies and to discuss the study design.

We left that meeting with a lot of enthusiasm from the investigators and we are on track to complete the study design and initiate the study by the first quarter of 2023.

And based on this timing, we are expecting initial data by the third quarter of 2024.

And based on the timing we are expecting initial data by the third quarter of 2024.

We already have two studies underway with external collaborators to evaluate <unk> 255 in combination with car T therapy.

We already have two studies underway with external collaborators to evaluate Nektar, 255 in combination with CAR T therapy. The first study is sponsored by Dr. Crystal McCall, who is the founding director of the, Stanford Center for Cancer Cell Therapy.

The first study is sponsored by Dr. Crystal Rock Hall, who is the founding director of the Stanford Center for cancer cell therapy.

Stanford is combining our proprietary CD 19, CD 22, Bispecific car T cell therapy with NEC with 255.

Stanford is combining their proprietary CD19, CD22, by specific CAR T cell therapy with, Nektar 255 in patients with relapse or refractory acute lymphoblastic leukemia.

In patients with relapsed or refractory acute lymphoblastic leukemia.

Although the CR rate is high for this therapy, there is a high rate of relapse and a short, duration of response, as well as a short median CFS. Our goal is to evaluate whether Nektar 255 can extend the duration of patients' CRs with, this regimen.

Although this CR rate.

This therapy, there was a high rate of return and the short duration of response as well as the short median PFS.

Our goal is to evaluate whether <unk> connect.

And the duration of patient see ours with this regimen.

The study plans to enroll 24 patients.

The study plans to enroll 24 patients.

Recruitment for this IST is well underway, and we are looking forward to sharing results, from the first several patients in the study around the end of this year or the early part of next year.

<unk> for the tire T is well underway and we are looking forward to sharing results from the first several patients in the study around the end of this year or the early part of next year.

The second study is being conducted by Dr. Cameron turtle glad at the Fred Hutchinson Cancer Center.

The second study is being conducted by Dr. Cameron Turtle's lab at the Fred Hutchinson, Cancer Center.

The HUTCH is combining Nektar 255 with Brionzy, or Lysosel, and approved CD19 CAR T cell therapy, in 24 relapse or refractory large B-cell lymphoma patients.

The Hutch is combining nektar 255, with Grande or license health and approved CD 19 car T cell therapy, and 24, relapsed or refractory large b cell lymphoma patients.

We expect to have results from the first several patients in the study in the first part of, 2023.

We expect to have results from the first several patients in the study in the first part of 2023.

The third and final areas of focus for Nektar 255 are our Nektar-sponsored ADCC combination, studies underway with Nektar 255. We have two studies ongoing in liquid and solid tumors in combination with ADCC antibodies.

The third and final area of focus for nitric 255, or a nectar sponsored a D. C. C combination studies underway with Becker to five five with.

We have two studies ongoing in liquid and solid tumors in combination with a D. C. C. Antibodies, we are planning to present data from the dose escalation portion of the liquid tumor study later this year at ash.

We are planning to present data from the dose escalation portion of the liquid tumor study, later this year at ASH.

Now turning to our preclinical research programs, we are cultivating our research pipeline with, a near-term focus on biological programs that have application in oncology and autoimmune disease. The first program we are working on, Nektar 288, is a PEG conjugate of the protein interferon, gamma. This molecule is designed as a site-specific conjugated PEG to protein in order to modify, binding of interferon gamma with one of its substrates and, overall, to greatly optimize the pharmacodynamic duration of interferon gamma signaling.

Now turning to our preclinical research programs, we are cultivating our research pipeline with a near term focus on biological program and have applications in oncology and autoimmune disease.

The first program. We are working on next at 288 is a peg conjugate of the protein interferon gamma.

This molecule is designed as a site specific conjugated tag could protein in order to modify binding of interferon gamma with one of its substrates and overall greatly optimize the pharmacodynamic duration of interferon gamma signaling.

This program has application in a number of potential indications, including oncology, as well as infectious diseases and others.

This program has application in a number of potential indications, including oncology as well as infectious diseases and others.

We are progressing this program, and in addition to our internal work, we'll explore collaboration, opportunities to bring this program into the clinic.

We are progressing this program. In addition to our internal work will explore collaboration opportunities to bring this program into the clinic.

Our second preclinical program targets tumor necrosis factor receptor 2, or TNFR2, and, is being developed in a collaboration with Biologique Design. The antibody engineering capabilities of Biologique are especially useful for the design of epitope-specific, antibody-based agonists. And so we're working together with them on a novel and unique bivalent agonistic antibody, targeting TNFR2. TNFR2 is highly expressed on T-regulatory cells, neuronal cells, and endothelial cells. And TNFR2 agonism has been shown to potentiate the suppressive effects and overall functional, properties of T-Rex. And its absence is associated with CNS autoimmunity, and its presence has been associated with, protective effects for neuronal cells, as well as other cell populations and tissues in the body.

Our second preclinical program targets tumor necrosis factor receptor, two or TANF opportunity and is being developed in a collaboration with biologic design.

The antibody engineering capabilities to biologics are especially useful for the designer epitope specific antibody based agonist.

And so we're working together with them on a novel and unique bi valent agonistic antibody targeted TNF Archie.

The N F. R. Two is highly expressed on T regulatory cell neuron with trials of endothelial cells.

And T N F. R. Two agonism has been shown to potentiate, the suppressive effects and overall functional properties of T. Rex and that option is associated with CNS auto immunity.

Its presence has been associated with protective effects for neuronal health as well as other cell populations in tissues in the body.

We expect to choose a candidate for IUD-enabling studies by year-end.

We expect to choose a candidate for <unk>, enabling studies by year end.

Our third program, which was invented in our research laboratories at nectar is also a novel biologic candidate that focuses on immune cell populations that participate in tissue repair and tissue protection.

Our third program, which was invented in our research laboratories at Nektar, is also a, novel biologic candidate that focuses on immune cell populations that participate in tissue repair and tissue protection. This program uses polymer engineering to modify a non-lymphocyte targeting cytokine, and we, are excited about the applications for this candidate as well.

This program uses polymer engineering Commodify, a non lymphocyte targeting site.

And we are excited about the applications for this candidate as well.

And we are looking forward to keeping you updated on our progress as these programs, mature.

And we're looking forward to keeping you updated on our progress as these programs mature.

And with that, I will turn the call over to Jill for a review of our financial guidance.

With that I will turn the call over to Joe for a review of our financial guidance.

Thank you Jay Z and good afternoon, everyone.

Thank you, Jay-Z, and good afternoon, everyone.

As Howard noted earlier, we have made significant progress in executing our restructuring plan, and implementing our revised strategic plan.

As Howard noted earlier, we have made significant progress in executing our restructuring plan and implementing our revised strategic plan.

Our 2022 financial guidance, which we provided during our April call, remains unchanged.

Our 2022 financial guidance, which we provided during our April call remains unchanged.

Our strategic plan is designed to support the advancement of Nektar 358, Nektar 255, and a number of innovative preclinical programs.

Our strategic plan is designed to support the advancement of an extra 358 next year to 55 and a number of innovative preclinical programs. We ended the quarter with a strong financial position, including approximately $625 million in cash and investments and no debt.

We ended the quarter with a strong financial position, including approximately $625 million, in cash and investments and no debt. The quick action we've taken to resize our programs and workforce to fit our new strategic, objectives sets up a cash runway that extends through the first half of 2025, which will take us through several key value-generating milestones for our pipeline.

Quick action, we've taken to resize, our programs and workforce to fit our new strategic objective sets up a cash runway that extends through the first half of 'twenty 25, which will take us through several key value generating milestones for our pipeline.

I'd like to summarize the key actions we took during the second quarter to reduce our ongoing, operating expenses. We reduced our headcount by approximately 70 percent, from around 735 to 225 employees. On an annual run rate basis, this reduction represents approximately $120 million in annual, operating expense savings.

I'd like to summarize the key actions, we took during the second quarter to reduce our ongoing operating expenses.

We reduced our head count by approximately 70% from around 735 to 225 employees on an annual run rate basis. This reduction represents approximately $120 million in annual operating expense savings.

We have worked to execute the most efficient operational wind-down of the BEMPEG program, consistent with our commitment to patients and their physicians. The studies are being discontinued, and patients are being transitioned to standard of care, options.

We have worked to execute the most efficient operational wind down of the ban paid program consistent with our commitment to patients and their physicians. The studies are being discontinued and patients are being transitioned to standard of care options.

We closed our R&D facility in Hyderabad, India, and have received strong interest from multiple, parties for the purchase of the site.

We closed our R&D facility in Hyderabad, India and have received strong interest from multiple parties for the purchase of the site.

We are also pursuing subleases for a substantial portion of our facilities in the San Francisco, Bay Area, while still maintaining sufficient office and laboratory space to allow our team to drive forward our proprietary program.

We are also pursuing sub leases for a substantial portion of our facilities in the San Francisco Bay area, while still maintaining sufficient office and laboratory space to allow our team to drive forward our proprietary program.

Now I'd like to turn to our second quarter results and remind you of our financial guidance. As I noted earlier, we ended the second quarter with approximately $625 million in cash and, investments, and we still plan to end the year with $440 to $450 million.

Now I'd like to turn to our second quarter results and remind you of our financial guidance as I noted earlier, we ended the second quarter with approximately $625 million in cash and investments and we still plan to end the year with $440 million to $450 million.

Our Full Year Gap Revenue Guidance is unchanged and expected to be between $85 and $95 million, which includes $15 to $20 million of product sales and $70 to $75 million of non-cash royalties. We expect to recognize the remaining revenue on a fairly rateable basis in the second half, of the year.

Our full year GAAP revenue guidance is unchanged and expected to be between 85 and $95 million, which includes 15 to 20 million of product sales and 70 to 75 million of noncash royalties, we expect to recognize the remaining revenue on a fairly ratable basis in the second half of the year.

In connection with our business restructuring and reduction in headcount, we still expect, to recognize impairment charges totaling $150 to $160 million. In the second quarter, we recognized $106 million of this restructuring charge, including, $57 million of non-cash impairment charges related to the write-off of facilities, IT systems, and laboratory equipment, and approximately $28 million of severance.

In connection with our business restructuring and reduction in head count, we still expect to recognize impairment charges totaling $150 million to $160 million.

In the second quarter, we recognized 106 million of this restructuring charge, including 57 million of noncash impairment charges related to the write off those facilities I T systems and laboratory equipment and approximately 28 million of severance.

The impairment charge in Q2 also includes $21 million in BEMPEG program wind-down costs, the most significant portion of which relates to ongoing clinical study costs during the wind-down. The wind-down process will continue in Q3 and Q4, and in accordance with GAAP, we will, record the remaining costs as incurred within the impairment line item of our income statement.

The impairment charge in Q2 also includes $21 million in Dunn take program wind down costs. The most significant portion of which relates to ongoing clinical study costs during the wind down.

The wind down process will continue in Q3, and Q4 and in accordance with GAAP, We will record the remaining costs as incurred within the impairment line item of our income statement.

Our R&D expense guidance is still expected to be between 240 and $250 million, including 45, 40 to 45 million in noncash depreciation and stock compensation expense.

Our R&D expense guidance is still expected to be between $240 and $250 million, including, $40 to $45 million in non-cash depreciation and stock compensation expense. Our G&A expense guidance is still projected to be between $90 and $95 million, including, $25 to $30 million in non-cash depreciation and stock compensation expense.

Our G&A expense guidance is still projected to be between 90 and $95 million, including 25 to 30 million in noncash depreciation and stock compensation expense and finally, our noncash interest expense is expected to be between 25 and $30 million related to our prior monetization.

And finally, our non-cash interest expense is expected to be between $25 and $30 million, related to our prior monetization of our royalty streams.

Our royalty streams.

Now, looking beyond 2022, our revised strategic plan is designed with an average annual net, cash used in operations of between $150 and $175 million. This represents a reduction of $225 to $225 million from our spending level prior to the, restructuring we announced in April.

Now looking beyond 2022.

<unk> strategic plan is designed with an average annual net cash used in operations of between 150 and $175 million. This represents a reduction of $225 million to $225 million from our spending level prior to the restructuring we announced in April .

As a reminder, our plan is to fully fund Nectar's 25 percent share of the Phase III development, of the Nectar 358 program under our collaboration agreement with Eli Lilly. In addition, there are a series of potential milestones that we are eligible to receive, through the late-stage development of this program, which total $250 million. These milestones include $50 million for the first patient enrolled in a Phase III clinical, study, $75 million upon the first Phase III study to meet its primary endpoints, $75 million for the first BLA approval in the U.S., and $50 million for the first European approval. As we have previously shared, these milestones are a critical component of our collaboration, with Lilly, as they essentially help us to pay for Nectar's 25 percent share of the Phase, III study costs.

As a reminder, our plan is to fully fund nectar is 25% share of the phase III development of the next two or 358 program under our collaboration agreement with Eli Lilly.

In addition, there are a series of potential milestones that we are eligible to receive through the late stage development of this program, which total $250 million.

These milestones include $50 million for the first patient enrolled in a phase III clinical study.

75 million upon the phase III. The first phase III study to meet its primary end points 75 million for the first BLA approval in the U S and $50 million for the first European approval.

As we have previously shared these milestones are a critical component of our collaboration with Lilly as they essentially help us to pay for an extra 25% share of the phase III study costs.

Thank you for joining us on the call today.

You for joining us on the call today, we will now open the call to questions Chad.

We will now open the call to questions.

Chad?

Thank you.

We will now begin our question and answer session.

Thank you we will now begin our question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys.

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To withdraw from the question queue, please press star then two.

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We please ask that you limit yourself to one question.

We please ask that you limit yourself to one question. If you have additional questions you may reenter the question queue.

If you have additional questions, you may reenter the question queue.

At this time, we will pause momentarily to assemble our roster.

At this time, we will pause momentarily to assemble our roster.

And the first question will come from Chris Shibutani with Goldman Sachs.

And the first question will come from Chris should be tawny with Goldman Sachs. Please go ahead.

Please go ahead.

Yes.

Good afternoon.

Yes. Good afternoon. Thank you very much for the opportunity and it's good to see progress that's being made across the programs here. If I can put my question to 358 upcoming disclosure of additional data in September to be clear have we had any information about the psoriasis program I don't believe that that.

Thank you very much for the opportunity, and it's good to see progress that's being made, across the programs here.

If I could put my question to 358, upcoming disclosure of additional data in September.

To be clear, have we had any information about the psoriasis program?

I don't believe that that had been top-lined by Lilly.

<unk> had been topline by Lilly should we expect in September in addition to the a D data that that would be the case and with 358 as we contemplate the different kind of immune mediated disease indications can you help us understand if you feel if that particular compound. This approach 358 might be advantaged.

Should we expect in September, in addition to the AD data, that that would be the case?

And with 358, as we contemplate the different kind of immune-mediated disease indications, can you help us understand if you feel if that particular compound, this approach, 358, might be advantaged for certain types of indications?

For certain types of indications we've seen.

We've seen some early promising in lupus.

Some early promising in lupus there is I believe some disappointment and you see if you could just help us understand how to think about that and the September readout. Thank you.

There was, I believe, some disappointment in UC.

If you could just help us understand how to think about that and the September readout.

Thank you.

Thanks, Chris.

Thanks, Chris we'll have Brian answered that question. So yeah. Thank you for the for the questions.

We'll have Brian answer that question.

So yeah, thank you for the questions.

You know, I think I can take them in order, but you may have to remind me of the third, one.

I I think I can take them in order, but you may have to remind me of the of the third one the first question was.

The first question was, will we be presenting data related to the psoriasis study? And yes, the answer is yes.

Will we be presenting our data related to the psoriasis study and yes. The answer is yes. The there'll be two presentations at E. A D V. In September one will be directed to the psoriasis study the phase II B study in psoriasis. The second one will be a phase one b.

There will be two presentations at EADV in September. One will be directed to the psoriasis study, the Phase 1B study in psoriasis.

The second one will be a Phase 1B summary of the Phase 1B in atopic dermatitis.

A summary of the of the phase, one b and and atopic dermatitis and I just wanted to emphasize that the the data you know.

And I just want to emphasize that the data, you know, for the presentation in atopic dermatitis, will be, since we've already presented some interim data, but we'll be presenting, well, really we'll be presenting the full efficacy and the full efficacy and safety data set.

For the presentation in atopic dermatitis will be since we've already presented some some interim data, but we'll be presenting a lilly will be presenting the full efficacy.

And the the the full after the efficacy and safety dataset.

You know, we've only presented interim data so far.

You know, we've only presented interim data so far.

And then, in addition, I think it's worth emphasizing that we'll also be presenting, additional endpoints that are also used for, you know, in studies of atopic dermatitis.

And then.

And then in addition, the I think it's worth emphasizing that will also be presenting additional endpoints that are also used force you know in studies of atopic dermatitis.

What Oh, what excites us very much about the presentation CIS, you'll be able to see the level of improvement and and as we've emphasized the.

What excites us very much about the presentations is you'll be able to see the level of improvement, and, as we've emphasized, the durability that we've seen after the drug treatment, after treatment has been stopped.

The durability that we've seen after the drug treatment after treatment has been stopped.

So, I know you asked the second question, but I need to be reminded of that one.

So Oh I know you asked the second question, but I need to be reminded of that one.

It's off for 3, 5, 8, there's some challenges here, you know, what makes this likely to, work or what have you learned so far, perhaps uniquely mechanistically from the different indications that we're doing early clinical work on?

Yes.

Great sauce for 358 Theres challenges here you know what makes this likely to work or what have you learned so far perhaps uniquely mechanistically from the different indications that we're doing early clinical work on thank you.

Thank you.

Yeah, so it's a great question.

Yeah. So it's a great question I think that you know we're unveiling new biology here so.

We're pretty much in the lead as we go to these indications and and and the this mechanism of inducing regulatory T cells to down regulate the immune responses that are driving these diseases, it's new biology, and as you emphasize we've seen some incredibly encouraging data in both lupus.

I think that, you know, we're unveiling new biology here.

So, you know, we're pretty much in the lead as we go to these indications and this mechanism, of inducing regulatory T cells to downregulate the immune responses that are driving these diseases.

And in a certain dermott dermatological skin diseases, you know atopic dermatitis.

You also mentioned the fact that we had a you know we had that we stop the study in ulcerative colitis I think it's important to emphasize that the T cells to drive.

The disease in these different indications are very different so the T cell driving force in ulcerative colitis is a very different you know pathogenic pathway than what we've seen in lupus or what we know is in lupus as well as in the.

As you know atopic dermatitis and psoriasis.

So you know again I think that we're a we're looking new biology is is is being uncovered I would say that the fact that we saw you know less efficacy than the UC study that we didn't see the efficacy that we've seen in the other indications is consistent with what other people.

It's new biology.

And as you emphasized, we've seen some incredibly encouraging data in both lupus and in certain dermatologic skin diseases, you know, atopic dermatitis.

You also mentioned the fact that we had, you know, we stopped the study in ulcerative, colitis.

I think it's important to emphasize that the T cells that drive the disease in these different indications are very different.

[noise] have reported that.

And you know both with this mechanism in with other mechanisms. It just takes a either a higher doses or it takes.

Other types of therapies to have an impact in ulcerative colitis that its not true in these other indications. So thanks again for the question.

So the T cell driving force in ulcerative colitis is a very different, you know, pathogenic pathway than what we've seen in lupus or what we know is in lupus as well as in the, you know, atopic dermatitis and psoriasis.

So, you know, again, I think that we're looking, new biology is being uncovered.

Thank you and the next question will be from Jay Olson from Oppenheimer. Please go ahead.

Oh, Hi, this is Charlie on the life of Chase. Thanks for taking my question I guess first for 45 age I think you previously indicated that phase III study start.

In the atopic dermatitis.

Quarter and now it seems like the trial will be started probably in 'twenty sleep. So just wondering what caused the delay and what allocating chapter.

Separately for 255.

No.

Seems like you already excel.

Forget about that but you mentioned combining two five thought it was car T. So what will trigger a natchez sponsored stuff.

Study in that setting.

Yes.

That's all thank you.

Thank you Shang will have Brian answer the first part of your question and then James you will tackle the second.

So the reason that we're continuing to design so.

The design of the phase two a dose ranging study in atopic dermatitis. This is complex, okay, and it's basically the delay it's just taking us longer to figure out what's the perfect perfect. The optimal type of design.

I would say that the fact that we saw, you know, less efficacy in the UC study that we didn't see the efficacy that we've seen in the other indications is consistent with what other people have reported that.

And, you know, both with this mechanism and with other mechanisms, it just takes either higher doses or it takes other types of therapies to have an impact in ulcerative colitis that it's not true in these other indications.

<unk> for the questions I would say that the landscape in atopic dermatitis is changing and this has also prompted us to to spend more time in that study design and that's why the study is is our.

So thanks again for the question.

The initiation is planned for 2023, rather than the end of this year.

Hey.

Hey, Joe This is Jay Z. So I'm sorry. Your second question. Yeah. We are definitely very excited about the potential of <unk> to five five combined with car T therapies, and I summarize really a lot of the data that we presented now over the last.

Three years, where we've been studying the combination and kind of more and more complex test systems right starting out with simple in vitro studies.

The car T cells for example have IL 15 receptors right you can signal.

Windows receptors, you could make the cells proliferate you can induce anti apoptotic markers in a very simple studies in vitro moving to more and more complex and Evo studies in cell models and ultimately moving into you know different doubles.

<unk> setting so it led to clarify.

I asked the question of what would get us to trigger a sponsored study well we are in fact are indeed.

Indeed doing a sponsored study. So so this is the study that I mentioned earlier on the call or we'll be evaluating placebo with standard of care car T therapies.

Since 255 added two to three weeks after car T therapy transplant into the patients. So we're actually going to be doing that study next year will be the sponsor.

I'm very excited to kick that study off and we expect to start that study around the end of this year and as I mentioned earlier, we expect to have data from that study in 2024.

Thank you and the next question will be from Jessica Fye from J P. Morgan. Please go ahead.

Thank you.

Hi, This is J O four Jeff. Thank you for question.

And the next question will be from, Jay Olson from Oppenheimer.

Please go ahead.

Our first question is on the interim analysis of a 358 in the phase two lupus study so based on the press release it looks like besides the safety.

Efficacy also a part of the interim analysis Sylvia wondering does it mean like a utility analysis has been done based on both efficacy and safety and if safety is part of the interim analysis, what type of safety sorry, what type of efficacy data has been.

Considered.

And by the committee.

Did they haven't looked at the primary endpoint or any of those secondary efficacy endpoint.

And our second question is on the cash runway.

Understand you guided your cash runway it could be into the first half 2025, but if it based solely on two five and three <unk> or does it also take it into any consideration that you might announce new clinical assets.

Between now and the first half 2025.

You very much.

Thank you Brian answer the 358 question and then she'll answer the financial question.

In order to preserve study integrity and to retain blinding for the study with patients and investigators we cannot share the data.

Reviewed by the the interim assessment Committee you know for the interim analysis as you as you know and as we've said the study is ongoing and it's really important to maintain the integrity of that study the.

The interim analysis evaluated both efficacy and safety from approximately 60% of the patients who had completed the 24 week treatment period and again. The study is continuing as planned based upon the pre specified criteria.

Lilly and we do not disclose the prespecified criteria used in the interim analysis, we can say that there was no futility analysis in the study however.

The interim assessment Committee had the latitude to stop the study for inadequate efficacy versus placebo.

So and of course, they had the opportunity to stop the study for any important safety concern.

I just wanted to remind you also to remember that the that it is a placebo controlled study and it compares three different doses of <unk> pegged.

Two placebo so yes, thanks again for the question.

Hi, This is Joe so for the second question I'm of course subject to continued positive data of course in the preclinical programs. Our plans include the continued development of those preclinical programs at Gz shared with you and Additionally, as Jayson mentioned, we will evaluate a collaboration for Nektar.

Eight mm and other opportunities as they present themselves.

Yeah.

Yes.

Thank you the.

The next question is from Greg Harrison with Bank of America. Please go ahead.

Oh, hi.

This is Chong on the line for Jay.

Hi, there this is Mary Kate on for Greg. Thanks for taking our question maybe how are you looking to position <unk> in atopic derm, maybe what stands out in terms of the mechanism of action of responses seen that could be differentiating.

Thanks for taking our question.

Thank you mitigate we're gonna have Brian answer that question.

So I'm just I think that's part of the ongoing discussion at the moment, how we're going to positioned 358, especially related to the current changing landscape that I mentioned before let me emphasize first of all that.

Three five day is completely different mechanism of action compared to the other drugs that are in the atopic dermatitis space. Okay. So for example, the standard of care is to pixel, which is in our blocks. The IL four IL 13 pathway and some of the other drugs now introduced.

Our basically blocking the same pathway the IL 13 pathway, so very closely related and.

The other major drugs in.

R R.

Our had been approved or in and treatment you know in studies for atopic dermatitis or the.

The JAK inhibitors, and there's a whole story behind the JAK inhibitors, but.

<unk> think to emphasize right now is that negative three five it is completely different mechanism. So so we're looking at.

You know it basically we're looking at the endpoints that are very similar and in these studies and we realize that there'll be patient subsets that will respond to our mechanism that won't respond to others and vice versa, and and that's how we're going to differentiate this drug.

Yeah.

Thank you and our next question will come from Mara Goldstein with Mizuho. Please go ahead.

Hi, This is Jerry Dawn gone from their Goldstein, thanks for taking our questions.

Is that a potential development opportunities.

No you're stepping down on that front, the forehead heavier type opportunities for other candidates such as the extra five five or other earlier as well and is there a type of deal that you would make that you may be most interested in such as front loaded we're tackling milestones.

Thank you Jerry we're gonna have Howard answered that question.

Yeah that good question look we we we have significant business development efforts centered around Nick or $2 55, Although I don't think at this stage, where we're looking at licensing it out at all a lot of collaborations for sure. We've already been working with a number of companies who have been including our next $2 55.

<unk> in their programs and we're seeing some very interesting results in and they're seeing very interesting results. So I do think you will see some collaborations around an extra $2 55, but.

I think they will be kind of diverse and because in the area of cell therapy. There are a number of different opportunities, it's actually becoming quite quite broad and I would like to see nectar $2 55, as I said earlier become you know the potentiate or of choice in a number of different cell therapies, not just one so because of that.

I see a lot of collaboration potential I do think next year. We'll keep next are $2 55 is a wholly owned asset for now.

Thank you and the next question is from Andy Si with William Blair. Please go ahead.

Oh, great. Thanks for taking my question so.

Regarding the car T combination Jay Z.

Obviously, there is a lot of behind the scenes logistical things that you got to also figure out the cost there.

Of the therapy hospital fees.

Just curious is a buy in from a car from a partner from a cost perspective.

Is required for you to go ahead and conduct this trial.

Thank you Andy we're gonna have gz answer that question.

Hey, Andy Thanks for the question certainly you are correct right. These are expensive therapies.

And also as you know when a patient takes a car T. They have to remain geographically, you're very very close right to the hospital as well right because the patient has to be monitored so closely.

So they're either in the hospital or literally across the street, Peter but I mean, so all of those things you know, we we waited and took into consideration when thinking about how to operationalize and execute the study.

And we basically are able to conduct this study on our own we don't need to partner with another company to execute the study and that includes the fact that the accessibility to the cell therapy itself remember and in many cases, it's either covered by insurance reimbursement because this is used in the on label.

<unk> setting.

But either way we wanted to make this study.

Festival to investigators and as accessible to patients as well. So we took into account logistical considerations.

Timing considerations, even as you know Andy supply chain for some of these.

Alagoas products has even been challenging in some cases, we've even taken those things into account, we're very confident that we can execute the study.

We're working with some of the best centers in the United States in particular centers that have a lot of beds that treat many many car T patients with these approved on label products at least feel pretty confident that we can execute the study and as I mentioned, we expect to kick it off around the <unk>.

End of the year.

Thanks for your question Andy.

And the next question will come from Roger song from Jefferies. Please go ahead.

Great.

I guess first for 35A, I think you previously indicated, that phase two studies start in the atopic dermatitis in third quarter, and now it seems like the trial will be started probably in 23.

Thank you for taking the question, maybe just no one called that.

So for the since you are designing the phase III for atopic dermatitis.

So just wondering what caused the delay and what are the gating factors?

We're reporting that <unk> September a KOL.

<unk> data.

What would you consider the results on the phase one.

As you design the study and or you will have some go no go decision still to be decided.

Hugh.

Well.

Move forward.

Thanks Chip.

Thank you Roger or we're gonna have Brian answer that question.

No I I the the face we know the results from the from the Phase one B study and we're going forward with the design of the of the dose ranging phase II B. It's we we we have demonstrated proof of concept in this disease indication and we're moving forward.

Okay.

Thank you and the next question will be from Ben Burnett from Stifel. Please go ahead.

Hi, This is Kelly on for Ben Burnett. Thanks for taking our question. We just have one question regarding that 255, we were just wondering if I'm using that gets you five pipe alongside car. He gives you any room to lower a completely unmet needs.

And separately for 255, just wondering, it seems like you are very excited about the opportunity combining 255 with CAR T. So what will trigger an active response or study in that setting?

And then for depletion.

Thank you.

Yeah.

Yeah to answer that.

And, yeah, that's all.

Oh, yeah, Thanks, Vivien and Kelly Thanks for the question.

Thank you.

Thank you, Chong.

Very provocative question.

Certainly I as you know right now the most standard approaches to use typhoon right and that carries a lot of a lot of issues.

With it both from you know from the patient standpoint.

The variability of some of those components as you know if you follow this field closely.

We'll have Brian answer the first part of your question, and then, Jay, you'll tackle the second.

The other thing is we've always had the suspicion that went to 55, you may have the opportunity to a deed approach.

Thinking of the conditioning regimen is a completely different way.

Either he doesn't have to be as much of a.

For lack of better.

Term a sledgehammer you know on the patients immune system.

There may be different regimens that you could use that you might even be able to admit it all on its own.

That would fall into definitely much more exploratory kind of work.

Definitely the investigators that we work with are very very interested in this question and many of them have proposed and shared.

So the reason that we're continuing to design, – so the design of the phase two dose ranging study in atopic dermatitis is complex, okay?

And it's basically the delay, it's just taking us longer to figure out what's the, perfect and perfectly optimal type of design for the questions.

I would say that the landscape in atopic dermatitis is changing, and this has also prompted us to spend more time in the study design, and that's why the study is – initiation is planned for 2023 rather So, for your second question, yeah, we are definitely very excited about the potential, of Nektar 255 combined with CAR T therapies.

And I summarize really a lot of the data that we've presented now over the last, you know, almost three years, where we've been studying the combination in kind of more and more complex test systems, right?

Some of their their scientific thoughts about it.

Those that are central to all of this is that we do know that one of the most important roles of lymphoid depletion.

Actually to create a cytokine environment and the patient that's really highly associated with an effective transplant of lymphocytes, it's basically a very supportive lymphocyte environment and that happens by basically.

Depleting lymphocytes, and causing the body Tijuana adaptively replete the immune system and so that's how you wanna transplant into that kind of a kind of a systemic familiar and obviously with a mechanism like $2 55 in the IL 15 pathway agonism since that's such a critical cytokines, maybe able to change that and our investigators are intra.

Starting out with simple in vitro studies, you know, the CAR T cells, for example, have, IL-15 receptors, right?

You can signal with those receptors, you can make the cells proliferate, you can induce, anti-apoptotic markers, you know, very simple studies in vitro, moving to more and more complex in vivo studies and cell models, and ultimately moving into, you know, different levels of patient settings.

But all that said you know this would fall more into the exploratory work.

It's a future opportunity will.

We will be starting with using that kind of on label approach to the car T products in our clinical study.

So that'll be used in the typical way, but that's one of the long term potential opportunities for 255 is to indeed change potentially the conditioning regimen.

So, to clarify, you know, you asked the question, what would get us, you know, to trigger a, sponsored study?

Great question. Thank you.

And thank you and our final question will come from Dana Gray Bonk with SBB Leerink. Please go ahead.

Well, we are, in fact, are indeed doing a sponsored study.

Hi, Thanks for the question a lot of good ones basketball, Randy I'm going to go to two for Nektar to five five weather related.

So, this is the study that I mentioned earlier in the call, where we'll be evaluating placebo, with standard of care CAR T therapies versus 255 added two to three weeks after CAR T therapy transplant into the patients.

And sometimes you have a solid tumor combination so the first one.

So, we're actually going to be doing that study.

Hello, Mad maintenance for bladder cancer, I think that's a really interesting study and the biomarkers.

Nectar will be the sponsor.

We're very excited to kick that study off, and we expect to start that study around the, end of this year.

Where if any do you see these 16 N T cells can be potentially aided by an extra 255. So you help those patients do you think you'll help the patients at the higher affinity NK cells do better and then my second question is for the MD Anderson study post Thearchy combined after of Allomap.

Confirm that the single arm study I know that indication is one where outcomes are really varied widely from site to site and how it was a single arm study you think that you can get a good sense of how the outcomes compared to historical.

Without a randomize them. Thanks.

Thank you Dana will have Daisy answer that.

Yeah. Thanks, Dana for the question. So so your first question was around the about the amount of maintenance and the NK compartment. So so.

Mark actually published a really cool you know paper and the the javelin 100, the Registrational study there.

What they showed in the forest plots and some of the additional analyses right is that patients that had the.

The highest levels of NK cell baseline when they were randomized onto the maintenance really did did the best and so if you parsed out the outcomes. They were really kind of like the highest efficacy you know kind of core tile of what they observed and so it really crystallize you know the idea that having an <unk>.

N K rich environment was was very much beneficial now they didn't necessarily like do a lot of well the comprehensiveness of the Phenotyping I'm not aware of in that study, but to your specific question you know in.

In this case the Mechanistically the CD 16 positive NK cell right would be the most critical because we do know Theres 56, Bright 16 down 56, you know damn 16, bright right and the 16 bright ones are the ones that participate in agency reactions. They have FC gamma or three a that they express in high <unk>.

<unk>, what we've seen in our.

You know multiple first in human studies, both in solid tumors as well as in liquid tumors is that we elevate <unk> 16 positive NK cells and that was very important for us to demonstrate at the very early biomarker of metric to 55 biology, because as we advance into a D C.

The combination of even in the human setting like as in our studies Mcdaris human Marvin Rituximab.

Wanted to be certain that were elevating <unk> 16 positive NK cells. So all of that looks really really promising Merck also thought all of that was very very promising you know and that's why you know together, we're very very excited about having $2 55 is an arm and the job of the bladder badly it really test our composite.

Mechanisms to add on to prevent T O and as I mentioned prevent he is really unique because it is really the only PD L. One within ITG won't have C and it really gives us the opportunity to kind of have potentially two mechanisms at once with the addition of 255.

And, as I mentioned earlier, we expect to have data from that study in 2024.

So your next question around the the investigator sponsored study so that is indeed, a single arm study and it is at a single site study at MD Anderson.

One of the things that's important here is Dr. Stephen Len is a very experienced thoracic oncologists and get a lot of experience working with derma in the static at one of the things that this study is also measuring because it is your point is very important about kind of differences in regional effects. This study is specifically studying.

The lymphoma depleted population of patients that have lymphoid depletion following chemo radiation right. So it's really looking at the most severe subset of patients in.

And Dr. Lin has shown in his laboratory that addition of IL 15 in that setting and his preclinical models actually rescues litho depletion and actually restores sensitivity.

PDL, one blockade and so the scientific hypothesis that we're testing there is that you have an opportunity to overcome and correct liberal depleted.

Effect, that's seen in the subset of patients and then we should be able to potentiate efficacy with a combination of $2 55, plus derma and these lump of depleted patients. The other good thing is that M. D. Anderson doesn't D treat a lot of patients right and so they also have a lot of historical experience that they can bring to bear.

And helping the interpretation that the study just even within their own institution. So we're really looking forward to that study I think it's really well designed as a signal seeking study.

And if the data from that look promising then we would move into proper much much larger studies that are randomized with appropriate comparison.

Thanks for your questions.

And thank you ladies and gentlemen. This concludes our question and answer session I would like to turn the conference back over to President and CEO Howard Robin for any closing remarks.

Thank you.

Well. Thank you everyone for joining us today lots of really good questions.

And the next question will be from Jessica Fye from J.P. Morgan.

You know today I think we've outlined our continued progress across our pipeline and partnered programs as part of our strategic reorganization and we believe these programs have the potential to address the needs of significant patient populations and provide the opportunity to create significant value for our shareholders. We look forward to continuing to execute on.

Please go ahead.

Hi.

This is J.L.

for Jeff.

Thank you for taking our questions.

So, our first question is on the interim analysis of 3-5-A in the phase two LUPA study.

So, based on the press release, it looks like besides the safety, efficacy also a part of, the interim analysis.

So, we are wondering, does it mean, like, futility analysis has been done based on both, efficacy and safety?

And if safety is part of the interim analysis, what type of efficacy data has been considered, by the committee?

Did they have a look at the primary endpoint or any of those secondary efficacy endpoints?

And our second question is on the cash runway.

We understand that you guided your cash runway could be into the first half 2025, but is, it based solely on 2-5-5 and 3-5-A, or does it also take into any consideration that you might announce new clinical assets between now and the first half 2025?

Thank you very much.

Thank you.

We'll have Brian answer the 3-5-A question, and then Jill will answer the financial question.

These key programs and building upon our core research capabilities and unique competencies I'd like to thank all of our employees for their efforts and their hard work and I want to thank our shareholders for their continued support and we look forward to providing you with updates on our progress so stay tuned thanks for joining us.

In order to preserve study integrity and to retain blinding for the study with patients, and investigators, we cannot share the data reviewed by the interim assessment committee, you know, for the interim analysis.

As you know, and as we've said, the study is ongoing, and it's really important to maintain, the integrity of that study.

The interim analysis evaluated both efficacy and safety from approximately 60% of the patients, who had completed the 24-week treatment period.

And again, the study is continuing as planned based upon the pre-specified criteria.

Thank you.

Lili, and we do not disclose the pre-specified criteria used in the interim analysis. We can say that there was no futility analysis in the study, however, the interim assessment, committee had the latitude to stop the study for inadequate efficacy versus placebo. So and, of course, they had the opportunity to stop the study for any important safety, concern.

The next question is from Greg Harrison with Bank of America.

I just want to remind you also to remember that it is a placebo-controlled study and, it compares three different doses of Respeg to placebo.

Please go ahead.

So yeah, thanks again for the question.

Hi there.

Hi, this is Jill.

This is Mary Kate on for Greg.

Hi, this is Kaylee Brizon for Ben Burnett.

So for the second question, of course, subject to continued positive data, of course, in, the preclinical programs, our plans include the continued development of those preclinical programs that Jay-Z shared with you, and additionally, as Jay-Z mentioned, we will evaluate a collaboration for Nektar 288, you know, and other opportunities as they present themselves.

Thanks for taking our question.

Thanks for taking our question.

Maybe, how are you looking to position Nektar 358 in a topic term, perhaps maybe what stands, out in terms of the mechanism of action or responses seen that could be differentiating here?

We just have one question regarding Nectar 255.

Thank you, Mary Kate.

We were just wondering if using Nectar 255 alongside CAR T gives you any room to lower, or completely omit lymphodoplasia?

We're going to have Brian answer that question.

Thank you.

So I'm just, I think that's part of the ongoing discussion at the moment, how we're going, to position 358, especially related to the current changing landscape that I mentioned before.

Can you answer that question?

Let me emphasize, first of all, that 358 is a completely different mechanism of action, compared to the other drugs that are in the atopic dermatitis space, okay?

Oh, yeah.

So for example, the standard of care is Dupixent, which is in, blocks the IL-4, IL-13 pathway, and some of the other drugs now introduced are basically blocking the same pathway, the, IL-13 pathway, so very closely related.

Thanks, Vivian.

And the other major drugs that are, have been approved or in treatment, you know, in studies, for atopic dermatitis are the JAK inhibitors, and there's a whole story behind the JAK inhibitors, but the important thing to emphasize right now is that NECTA-358 is a completely different mechanism.

And hello, Kelly.

And thank you Sir the conference has now concluded. Thank you for attending today's presentation you may now disconnect.

And thank you.

So we're looking, you know, at basically, we're looking at the endpoints that are very, similar in these studies, and we realize that there will be patient subsets that will respond to our mechanism that won't respond to others, and vice versa, and that's how we're going to differentiate this drug.

Thanks for the question.

And our final question will come from Dana, Greybonk with SVB Lyrinc.

Thank you, and the next question will come from Mara Goldstein with Mizzou Hub, please, go ahead.

So, it's a very provocative question.

Please go ahead.

Hi, this is Jerry Gong, I'm from Mara Goldstein, thanks for taking our questions.

Certainly, as you know, right now, the, the most standard approach is to use CyFlu, right?

Hi.

And thank you.

The first is on potential business development opportunities, I know you've spoken on that, front beforehand, have you identified opportunities for other candidates such as NECTA-255 or other earlier candidates as well, and is there a type of field that you may be most interested, Thank you, Jerry.

And that carries a lot of, a lot of issues with it, both from, you know, from the patient, standpoint as well as availability of some of those components, as you know, if you follow this field closely.

Thanks for the question.

Ladies and gentlemen, this concludes our question-and-answer session.

We're going to have Howard answer that question.

Now, the thing is, we've always had the suspicion that with 255, you may have the opportunity, to indeed approach sort of thinking of a conditioning regimen in a completely different way.

A lot of good ones asked already.

I would like to turn the conference back over to President and CEO Howard Robin for any, closing remarks.

You may now disconnect.

Yeah, that's a good question.

Either it doesn't have to be as much of a, just for lack of a better term, a sledgehammer, you know, on the patient's immune system.

I'm going to go to two for Nektar 255 that are related in some of your solid tumor combinations.

Well, thank you, everyone, for joining us today.

Look, we have significant business development efforts centered, around Nektar 255, although I don't think at this stage we're looking at licensing it out at all.

There may be different regimens that you could use, and you might even be able to omit it, all on its own.

So the first one in the Avelumab maintenance for bladder cancer, I think that's a really interesting study.

Lots of really good questions.

A lot of collaborations, for sure.

That would, you know, fall into definitely much more exploratory kind of work.

And the biomarkers you talked about are also, interesting that the patients with this higher affinity NK cells seem to do better with that.

You know, today, I think we've outlined our continued progress across our pipeline and, partnered programs as part of our strategic reorganization, and we believe these programs have the potential to address the needs of significant patient populations and provide the opportunity to create significant value for our shareholders.

We've already been working with a number of companies who have been including Nektar 255 in their programs, and we're seeing some very interesting results, and they're seeing very interesting results. So I do think you will see some collaborations around Nektar 255.

Obviously, the investigators that we work with are very, very interested in this question, and many of them have, have proposed and shared, you know, some of their, their scientific thoughts about it.

And I wonder specifically, you know, does Nektar 255, have you done work showing that, patients of lower affinity CD16 NK cells can be potentiated by Nektar 255?

We look forward to continuing to execute on these key programs and building upon our core, research capabilities and unique competences.

But I think they will be kind of diverse, and because in the area of cell therapy, there are a number of different opportunities.

One of those that's central to all of this is that we do know that one of the most important, roles of lymphodepletion is actually to create a cytokine environment in the patient that's really highly associated with an effective transplant of lymphocytes.

Will you help those patients?

I'd like to thank all of our employees for their efforts and their hard work, and I want, to thank our shareholders for their continued support.

It's actually becoming quite broad, and I would like to see Nektar 255, as I said earlier, become the potentiator of choice in a number of different cell therapies, not just one.

It's basically a very supportive lymphocyte environment, and that happens by basically, you know, depleting lymphocytes and causing the body to want to adaptively replete the immune system.

Or do you think you'll help the patients with the higher affinity NK cells do better?

And we look forward to providing you with updates on our progress, so stay tuned.

So because of that, I see a lot of collaboration potential.

And so that's how you want to transplant into that kind of a, kind of systemic milieu.

And then my second question is for the MD Anderson study post-CRT combined after Avelumab.

Thanks for joining us.

I do think Nektar will keep Nektar, 255 as a wholly owned asset for now.

And obviously, with a mechanism like 255 and an IL-15 pathway agonism, since that's such, a critical cytokine, you may be able to change that, and our investigators are interested.

Can you confirm that the single-arm study, and I know that indication is one where, outcomes really vary widely from site to site, and how with a single-arm study you think that you could get a good sense of how the outcomes compare to historical without a randomized arm.

And thank you, sir.

Thank you.

With all that said, you know, this would fall more into the exploratory work.

Thank you, Dana.

The conference has now concluded.

And the next question is from Andy Tsai with William Blair.

I think it's a future opportunity, you know, we'll be starting with using the kind of on-label, approach to the CAR-T products in our clinical study, so they'll be, you know, used in the typical way, but that's one of the long-term potential opportunities for 255 is to indeed change potentially the conditioning regimen.

Okay.

We'll have Daisy answer that.

Thank you for attending today's presentation.

Please go ahead.

Great question.

Yeah, thanks, Dana, for the question.

[music].

Great.

Thank you.

So your, first question was around the Avelumab maintenance and the NK compartment.

Thanks for taking my question.

So Merck actually published a really cool, you know, paper in the Javelin 100, the registrational study there.

So regarding the CAR T combination, Jay Z, obviously there's, a lot of behind-the-scenes logistical things that you have to also figure out, the cost of the therapy, hospital fees.

And what they showed in, you know, the four spots and some of the additional analyses, right, the patients that had the highest levels of NK cell baseline when they were randomized onto the maintenance really did the best.

I'm just curious if a buy-in from a partner, from a cost perspective, is required for you to go ahead and conduct this trial?

And so if you parsed out the outcomes, they were really in the kind of the highest efficacy, you know, kind of quartile of what they observed.

Thank you, Andy.

And so it really crystallized, you know, the idea that having an NK-rich environment was very much beneficial.

We're going to have Jay Z answer that question.

Now they didn't necessarily, like, do a lot of, well, the comprehensiveness of the phenotyping.

Yeah.

I'm not aware of in that study.

Hey, Andy.

But to your specific question, you know, in this case, mechanistically, the CD16 positive NK cell, right, would be the most critical.

Thanks for the question.

Because we do know, you know, there's 56 bright, 16 dim, 56, you know, dim, 16 bright, right?

Certainly, you are correct.

And the 16 bright ones are the ones that participate in ADCC reactions.

These are expensive, therapies.

They have FC gamma R3A that they express in high levels.

And also, as you know, when a patient takes the CAR T, they have to remain geographically very, very close to the hospital as well because the patient has to be monitored so closely.

Well, we've seen in our, you know, multiple first in human studies, both in solid tumors as well as, in liquid tumors, is that we elevate CD16 positive NK cells.

So they're either in the hospital or literally across the street, if you know what I mean.

And that was very important for us to demonstrate as a very early biomarker of Nectar 255 biology.

So all of those things we weighed in and took into consideration when thinking about how to operationalize and execute the study.

Because as we advance into ADCC combinations, even in the heme setting, like as in our studies with daratumumab and rituximab, we want to be certain that we're elevating CD16 positive NK cells.

And we basically are able to conduct this study on our own.

So all of that looks really, really promising.

We don't need to partner with another company to execute the study.

Merck also thought all of that was very, very promising, you know.

And that includes the fact that the accessibility to the self-therapy itself, remember, in many cases, it's even covered by insurance reimbursement because this is used in the on-label setting.

And that's why, you know, together we're very, very excited about having 255 as an arm in the javelin bladder medley.

But either way, we want to make this study as accessible to investigators and as accessible to patients as well.

It really tests a composite mechanism to add on to Beventio.

So we took into account logistical considerations, timing considerations, even, as you know, Andy, supply chain for some of these autologous products has even been challenging in some cases. We've even taken those things into account.

And as I mentioned, Beventio is really unique because it is really the only PD-L1 with an IgG1-FC.

We're very confident that we can execute the study. We're working with some of the best centers in the United States, in particular, centers that have a, lot of beds that treat many, many CAR T patients with these approved on-label products. So we feel pretty confident that we can execute the study.

And it really gives it the opportunity to kind of have potentially two mechanisms at once with the addition of 255.

And as I mentioned, we expect to kick it off around the end of the year, here.

So, your next question around the investigator-sponsored study, so that is indeed a single-arm study, and it is a single-site study at MD Anderson.

Thanks for your question, Andy.

One of the things that's important here is Dr. Stephen Lin is a very experienced, you, know, thoracic oncologist, and he has a lot of experience working with DERVA in this setting.

And the next question will come from Roger Song from Jefferies.

One of the things that this study is also measuring, because it is, your point is very, important about kind of differences in regional effects, this study is specifically studying the lympho-depleted population of patients that have lympho-depletion following chemoradiation, right?

Please go ahead.

So, it's really looking at the most severe subset of patients, and Dr. Lin has shown, in his laboratory that addition of IL-15 in that setting in his preclinical models actually rescues lympho-depletion and actually restores sensitivity to PD-L1 blockade.

Great.

And so, the scientific hypothesis that we're testing here is that you have an opportunity, to overcome and correct a lympho-depleted, you know, effect that's seen in these subset of patients, and then we should be able to potentiate efficacy with the combination of, 255 plus DERVA in these lympho-depleted patients.

Thank you for taking the question.

The other good thing is that MD Anderson does indeed treat a lot of patients, right? And so, they also have a lot of historical experience that they can bring to bear and, help in the interpretation of the study, just even within their own institution.

Maybe just one from us.

So, we're really looking forward to that study.

So for the, since you are designing the Phase 2 for atypical dermatitis and you are reporting, the Phase 1B in September, the full data, would you consider the results for the Phase 1B as you design the study and, or you will have some go, no-go decisions due to be decide, as you, if you will kind of move forward with the Phase 2?

I think it's really well-designed as a signal-seeking study, and if the data from that were promising, then we would move it to, you know, proper, much, much larger studies, you know, that are randomized with appropriate comparators.

Thank you, Roger.

Thanks for your questions.

We're going to have Brian answer that question.

No, I, I, I, the, the phase, we know the results from the, from the Phase 1B study, and we're going forward with the design of the, of the dose ranging Phase 2B.

It's, we, we, we have demonstrated proof of concept in this disease indication and we're, moving forward.

Thank you.

And the next question will be from Ben Burnett from Stiefel.

Please go ahead.