Nektar Therapeutics (NKTR) 2016 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Nektar Therapeutic Second Quarter 2016 Financial Results Conference Call. (Operator instructions) As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Jennifer Ruddock, Vice President of Investor Relations. Please go ahead.

Thank you, Cat. Good afternoon, everyone, and thank you for joining us. With us today are Howard Robin, our President and CEO; Jon Nicholson, our Chief Operating Officer; Gil Labrucherie, our Chief Financial Officer; Dr. Ivan Gergel, our Chief Medical Officer; Dr. Steve Doberstein, our Chief Scientific Officer, and Dr. Jonathan Zalevesky, our Vice President of Biology.

On this call, we expect to make forward-looking statements regarding our business including: potential regulatory approval decisions and commercial launch timing; the timing of future clinical trials; clinical development plans; the economic potential of our collaboration partnerships; the therapeutic and market potential of certain drugs and drug candidates, as well as those of our partners; our financial guidance for 2016; and certain other statements regarding the future of our business. Because these forward-looking statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict, and many of which are outside of our control.

Important risks and uncertainties are set forth in our Form 10-Q filed on May 4, 2016, which is available at SEC.gov. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future development, or otherwise. A webcast of this call will be available on the IR page at Nektar's website, at Nektar.com. With that, I will now turn the call over to Howard. Howard?

Thank you, Jennifer. Thank you, everyone today, for joining us on our Second Quarter 2016 call. On today's call, we will review our quarterly results and discuss the many upcoming catalysts and milestones for Nektar expected over the next several quarters. Ivan will provide an update on our plans for NKTR-181 and NKTR-214, both of which are advancing on track in the clinic. Also, Jonathan will provide a brief discussion on our translational research for the ongoing trial and future trials of NKTR-214.

I'd like to begin with a few comments on Movantik. As of July 22, over 332,000 prescriptions for Movantik had been filled in the US since launch. We continue to be very pleased with the efforts of AstraZeneca and Daiichi Sankyo to create awareness for the OIC market, gain primary and preferred reimbursement status for Movantik, and drive Movantik's commercial performance in its first year of launch.

As Movantik was the first oral [primora] approved which treats the underlying cause of OIC, AstraZeneca and Daiichi continue to execute both an unbranded OIC awareness campaign as well as Movantik-specific DTC advertising.

US Movantik prescriptions continue to grow nicely. Weekly prescriptions for the week ended July 22 totaled about 8,800, a 15% increase from a quarter ago. This translates to an annual run rate of roughly $133 million at the current WAC price of approximately $290 per monthly prescription. Both companies continue to be extremely pleased with the favorable feedback from patients and physicians after experience with Movantik.

Now, let's talk about the positive progress of Adynovate for hemophilia A, which was launched in the US in November of 2015. In June, Shire announced the completion of its $32 billion acquisition of Baxalta. Shire is fully-committed to the hemophilia franchise and continues to invest in Adynovate to position this novel treatment to grow and lead the global market for hemophilia A.

The Adynovate launch is progressing quite nicely. On their Q2 financial results call yesterday, Shire noted that Adynovate sales are annualizing at greater than $100 million based on Q2 sales. They added that sales are obviously growing quite rapidly given that the product is still in its initial launch mode.

Shire recently presented positive data on Adynovate in pediatric patients at the World Federation of Hemophilia Congress. The trial achieved its primary endpoint with no patients developing inhibitory antibodies to Adynovate. The data also showed that these previously-treated patients had fewer bleeding episodes and a reduced dosing frequency with Adynovate.

As a reminder, a supplemental BLA to expand the use of Adynovate into pediatric patients and surgical settings was filed in February of this year, and this pediatric trial also served as one of the registration trials for the European filing of Adynovate this past March.

Just this week, Shire also announced that the Baxject system, which is used in Advate, has now been approved for Adynovate, allowing an easier administration process for physicians, caregivers, and patients.

As a reminder, Nektar is entitled to receive mid-single-digit royalties on sales of Adynovate up to $1.2 billion, and a flat 13% royalty on sales exceeding $1.2 billion, as well as an additional $55 million in sales milestones.

As stated in the past, the economic potential for Movantik and Adynovate alone should contribute substantial revenues to Nektar, and move us towards becoming a cash-flow-positive company.

Before I provide an update on all of our progress with our proprietary pipeline, I'd like to comment briefly on four additional partner programs, all of which have expected Phase 3 data or a potential approval milestone occurring in the next several quarters. If successful, these partner programs could contribute to our royalty streams as early as 2017.

I'll start with Onzeald which we recently partnered with Daiichi Sankyo Europe. Onzeald is our novel Topo-1 inhibitor that has completed a Phase 3 trial in patients with advanced breast cancer. In Q2, we granted Daiichi Sankyo Europe exclusive rights to market Onzeald in Europe, and Nektar retains the rights to market Onzeald in the US and the rest of the world.

In June of this year, we filed the MAA for Onzeald, and I am pleased to tell you that in July, the EMA validated and accepted the Onzeald filing for review. The MAA is pursuing conditional marketing authorization based on the highly promising data in a pre-specified sub-group of patients in the Phase 3 trial who had advanced breast cancer with a history of brain metastases. You will recall that we doubled overall survival in this subset of patients.

The CHMP also granted an accelerated assessment procedure for the Onzeald filing, which abbreviates the standard 210-day review time frame to only 150 days. This means we will have a decision on the conditional approval of Onzeald sometime in the first quarter of 2017, so this is a key upcoming catalyst for us.

Daiichi Sankyo Europe is paying $20 million up front for the licensing of rights to Onzeald in Europe, and this payment helps to fund the confirmatory trial which if positive could support final approval in Europe and support the NDA filing in the US. If conditional approval in Europe is granted in the first quarter of 2017, we will receive another $10 million payment from Daiichi and upon final approval in Europe we will get another $25 million. Nektar will also receive 20% royalties on net sales of Onzeald in all European territories.

In the area of anti-infectives, Cipro Inhale and Amikacin Inhale, two separate programs currently in development with Bayer, are poised to complete their Phase 3 program shortly. Bayer expects data readouts from these Phase 3 trials in 2016 or early 2017 respectively. For Cipro Inhale, Nektar will receive an average 10% royalty on sales, and for Amikacin Inhale, we will receive a flat 30% royalty on US sales and an average 22% royalty on ex-US sales. So, we look forward to Bayer's announcements with the data from these Phase 3 programs over the next several quarters.

Another key partnered program with an upcoming Phase 3 data catalyst is Ophthotech's Fovista for wet AMD. The current market for therapeutic stream wet AMD is $6 billion, so royalties from potential Fovista sales represent a substantial opportunity for Nektar. Ophthotech recently confirmed they are on track to deliver top-line data from their Phase 3 program in Q4 of this year. With a successful trial outcome and the potential for a priority review in this indication, Fovista is positioned for a potential launch in the fourth quarter of 2017. In addition to earning a mid-single-digit royalty on net sales, we will also recognize revenue from product sales as Nektar's manufacturing will support the commercial supply chain for Fovista.

So, now, let's talk about our proprietary pipeline. As you know, Nektar has built an impressive pipeline with four highly-valuable, wholly-owned drug candidates in the therapeutic areas of immuno-oncology, pain, and immunology. In IO, we have NKTR-214 and NKTR-255, which capitalize on the IL-2 and IL-15 pathways to stimulate tumor-killing T cells and memory T cells. In pain, we have NKTR-181, a novel opioid molecule in Phase 3 for chronic pain, and in immunology we have NKTR-358, our first autoimmune disease candidate which I recently announced at the Jefferies conference in June and which will enter the clinic in the first quarter of 2017.

I'll comment briefly on these pipeline programs, and then Ivan will provide more detail on the clinical development plans for both NKTR-181 and NKTR-214 as they are both poised to have near-term clinical data.

First, NKTR-181. The enrollment for the Phase 3 trial for NKTR-181 is now complete, and we continue to expect initial data in the first quarter of 2017. NKTR-181 could emerge as an important new pain medicine to treat patients with moderate to severe chronic pain. Moreover, as opioid abuse remains a major societal problem, NKTR-181's unique properties attributable to the molecule's inherent structure position the drug to address the opioid abuse epidemic. NKTR-181's slow rate of brain entry is uniquely designed to reduce euphoria and likeability in stark contrast to the highly-abused opioids and opioid formulations available today.

The drug's safety profile may also offer additional advantages over other opioids, with a potential for reduced respiratory depression and sedation. Finally, since NKTR-181's properties are inherent to the molecule itself, and not a result of a reformulation of a highly-abused, rapid-acting opioid, the drug could also address the serious issue of diversion in this country.

We're extremely excited about the potential for NKTR-214 to transform the immuno-oncology landscape as the first medicine designed to selectively stimulate the in-vivo growth of endogenous tumor-killing T cells and natural killer cells within the tumor microenvironment.

By biasing action of NKTR-214 to the CD122 receptors found on CDA-positive T cells and natural killer cells, we can stimulate the growth of these cells without the corresponding growth in regulatory T cells.

NKTR-214 also has an extremely-attractive profile as a medicine -- it has an antibody-like dosing regimen and a non-overlapping side effect profile, which complements the existing checkpoint inhibitor class of drugs.

With its unique profile, NKTR-214 could become a centerpiece in the rapidly-evolving IO landscape. Ivan will update you on the ongoing NKTR-214 trial, and our development plans for NKTR-214 in a moment. We're also working on other IO therapies such as NKTR-255, our IL-15 candidate, which as a memory T cell agent could play a complementary role to NKTR-214 and other IO agents, and we will continue our research efforts in this area. We look forward to the opportunities that lie ahead.

Now, switching away from cancer IO into immunology, we are excited about NKTR-358, a new autoimmune disease candidate which is designed to stimulate the growth of the body's own regulatory T cells. Many autoimmune diseases are characterized by an overproduction of pathological T effector cells, and an insufficient supply of T regs. A medicine which directly increases production of T regs in vivo has long been a goal in immunology. Unlike current immunosuppressant agents, which globally suppress the immune system to only address disease symptoms, NKTR-358 could be the first medicine to correct the underlying pathology of autoimmune disease.

At the Jefferies conference, I presented data for NKTR-358, which shows that it significantly increases T reg cells in healthy non-human primates, without stimulating the production of T effector cells. These data are exceedingly promising, highlighting NKTR-358's potential to have a profound effect on a number of autoimmune diseases including rheumatoid arthritis, Crohn's disease, psoriasis, lupus, and Graph-versus-Host Disease. We anticipate filing an IND for NKTR-358 in the first quarter of 2017.

With that, I will now hand the call over to Ivan.

Thanks, Howard, and good afternoon. I'd like to begin by giving you an update on NKTR-181. First, as Howard just stated, we are pleased to announce that we have recently completed enrollment in our pivotal efficacy trial in chronic low back pain patients, and we are on track with our goal of having top-line efficacy data for NKTR-181 in the first quarter of 2017.

As we have discussed on prior calls, this trial utilizes an enriched enrollment, randomized withdrawal design to evaluate NKTR-181 in 600 opioid-naive patients with chronic low back pain. Patients from the efficacy trial are also rolling over into the 52-week long-term safety study which was also initiated last year.

As we mentioned last quarter, we are starting a Phase 3 human abuse liability trial which is also referred to as a HAL trial, by the end of this year. The results from this study are intended to support final labeling and scheduling for NKTR-181. This planned pivotal HAL trial is of course much shorter than the efficacy trial, and so we expect to complete it in the second quarter of 2017.

HAL studies are designed to assess the relative abuse potential of a medicine. Our first HAL trial measured drug liking, feeling high, and sleepiness, for 100 milligrams, 200 milligrams, and 400 milligram doses of NKTR-181 as compared to 40 milligrams of Oxycodone and placebo. The results show that all three doses of NKTR-181 were statistically significant in their separation from Oxycodone on each of these measures, with P values less than 0.0001.

As Howard stated earlier, the inherent properties of NKTR-181 could be pivotal in addressing the prescription opioid abuse problem and could be transformative in the treatment of chronic pain.

Now, let's move on to what we're doing in IO, and in particular the progress that we are making with our Phase 1/2 trial for NKTR-214. As Howard mentioned, the dose escalation portion of this study is proceeding on track, and we still expect to report initial top-line data before the end of the year.

This first stage of the trial evaluates single-agent NKTR-214 given once every three weeks in escalating dose cohorts, and is being conducted at MD Anderson and at Yale Cancer Center. This dose escalation portion of the trial which we started last December, includes patients with melanoma and with renal cell carcinoma, amongst others, and will evaluate tumor responses and safety, and notably in the trial to date, no patients have experienced vascular leak syndrome.

Also in this study, we are collecting serial blood samples and tumor biopsies in order to analyze important biomarker data. Jonathan will talk about these in a moment. Again, we expect to report initial top-line data before the end of this year. Of course, we anticipate that there will still be patients on treatment with the drug when we report these initial data. We are also planning to expand the single-agent study into specific tumor cohorts before the end of this year.

As you know, the clinical landscape in IO is changing rapidly, given the recent positive results from checkpoint inhibitor combinations, and the most recent approval in melanoma. As we initiate combination studies of NKTR-214, we want to insure that NKTR-214 is positioned to be developed to its full potential within this evolving landscape. To this end, we are in the process of designing a clinical program that combines NKTR-214 with checkpoint inhibition. We plan to begin the combination program later this year.

And with that, I am going to hand the call over to Jonathan.

Thanks, Ivan. I'd like to spend a few minutes reviewing the importance of our biomarker program in the ongoing NKTR-214 clinical trial. As you know, and as we've presented at numerous medical meetings, including the recent ASCO meeting in Chicago, in our pre-clinical studies NKTR-214 promotes tumor killing immune cell accumulation directly in the tumor, providing a mechanistic basis for its significant anti-tumor activity in multiple models.

In these studies, we've characterized the immunological determinants of NKTR-214's action. Now, as we evaluate NKTR-214 in patients, both as a single agent and in combination with checkpoint inhibitors, we have made it a priority to incorporate human immune monitoring from the very beginning of the trial in order to examine NKTR-214's mechanistic effect in multiple physiological systems, including whole blood and the tumor micro-environment.

In our ongoing clinical trial, we have incorporated the longitudinal collection of pre- and post-dose blood samples and tumor tissue. Numerous analytes are being measured from these blood and tumor specimens that classify the mechanistic relationship of NKTR-214 action on tumor immunology, and the direct TD effect of NKTR-214 in cancer patients. We are using flow cytometry and IHC methods to measure the identity, proliferation, activation state, and total abundance of immune cells present during treatment with NKTR-214. These measurements include changes in the patients' CD8 T cell and K cell, and T reg cell levels from baseline in blood and tumor samples, and include activation markers such as the proliferation marker KI67.

Importantly, we are also looking at PD-1 and PD-L1 markers, specifically, both in the blood and in the tumor, because an agent that could stimulate the induction of these markers could become very well-positioned in combination with checkpoint inhibitors.

In addition, we are looking not only at measures of proliferation and activation, but also at functionality and specificity. For example, we are using nucleic acid-based technologies to detect changes in overall gene expression and TCI repertoire analysis as a measure of T cell clonality.

These measurements will demonstrate to us whether NKTR-214 as a medicine has the ability to grow TILs in vivo and replenish the immune system. This mechanism is critically important in IO. While inflamed or hot tumors have been shown to respond best to checkpoint inhibition, we've now learned that many human tumors lack these sufficient TIL populations. For this reason, a TIL-enhancing MOA could transform the IO landscape.

We believe that this scientifically-guided approach for NKTR-214 throughout our human trials will greatly benefit our understanding and help us optimize the potential of NKTR-214 as a single agent and in combination for future IO regimens in a broad range of tumor types.

With that, I'll turn the call over to Gil for a discussion of our financial results.

Thank you, Jonathan. I will start with a brief review of the highlights of our second quarter 2016 financial results, and then I will go over our financial guidance for this year. Before I review our Q2 results, I would like to note that our year-end cash guidance remains unchanged, and we still plan to end the year with approximately $200 million in cash and investments.

For Q2 2016, total revenue was $32.8 million compared to $22.7 for Q2 2015. This increase was due to higher product sales, royalties, and license collaboration and other revenue. Product sales and gross margin have substantially increased in 2016 from comparable periods in 2015. These increases are due to higher product sales to Ophthotech under our exclusive manufacturing agreement to supply their ongoing Fovista clinical trials, as well as validation batches for their commercial readiness activities.

As Howard mentioned earlier, on May 30 of this year, we entered into a collaboration agreement with Daiichi Sankyo Europe under which we gave Daiichi exclusive commercialization rights to Onzeald in Europe. This agreement includes a $20 million up-front payment which we expect to receive in Q3. In Q2 2016, we recognized $3.2 million of the up-front payment in accordance with GAAP revenue recognition principles. We expect to recognize the remainder of the up-front payment over the estimated period of time it will take to obtain final marketing approval of Onzeald in Europe.

Total operating costs and expenses for Q2 2016 were $71.1 million compared to $66.1 million in the same quarter of 2015 as a result of increased R&D investment. R&D expense was $52.4 million in the second quarter of 2016 compared to $45.4 million in the same quarter of 2015. This increase is primarily due to investment in our clinical programs including NKTR-181 and NKTR-214. R&D expense for the quarter included approximately $5 million of non-cash stock-based compensation and depreciation expense.

G&A expense was $11 million in Q2 2016 compared to $10.2 million in the same quarter a year ago. This included approximately $3 million in non-cash stock-based compensation and depreciation expense. Cash and investments at June 30, 2016 were $274.9 million, as compared to $308.9 million at the end of 2015.

The cash balance at the end of Q2 does not include the $20 million up-front cash payment we expect to receive from Daiichi this quarter.

I will now review our annual financial guidance for 2016.

We continue to expect total GAAP revenue to be between $155 million and $165 million. Other than the $11 million in Movantik European milestones which we expect to collect and recognize as revenue in Q4, we project revenue to be split fairly evenly between Q3 and Q4. We now expect our GAAP R&D expense will range between $200 million and $210 million.

We have increased our R&D expense guidance range by approximately $20 million for the following reasons: the initiation of a Phase 1 dose escalation studies of NKTR-214 in combination with checkpoint inhibitors; investment in IND-enabling studies for NKTR-358; and the initiation of the confirmatory study for Onzeald as well as the pivotal NKTR-181 human abuse liability study.

R&D expense includes approximately $21 million of non-cash stock-based compensation and depreciation expense. We continue to expect G&A expense to come in between $40 million and $42 million, which includes $12 million of non-cash stock-based compensation and depreciation expense.

And as I stated earlier, we are reiterating our cash guidance for 2016. We still plan to end the year with approximately $200 million in cash and investments.

With that, we will now open the call to questions. Operator?

(Operator instructions) Our first question comes from the line of Jessica Fye with JPMorgan. Your line is open.

Hey there, thanks for taking my question. I guess I want to dig into 214 a little bit more. You talked about the rapidly-evolving landscape in immuno-oncology. Can you elaborate a little bit more on the factors that you weigh as you think about the development path from here, particularly in combo with PD-1s, including things like tumor type, setting, and maybe which checkpoint inhibitor you most want to study 214 with? Thank you.

So, we appear to be having a problem with the operator opening the call for questions, so I'm going to ask that folks e-mail me a question.

Hello?

Hi.

Hey, did you guys hear my question?

We did not hear it. Can you repeat it again, Jessica? Thank you.

Yes, so I just wanted to dig in a little bit more on 214, and the kind of development path from here. You guys talked about the rapidly evolving landscape in immuno-oncology, so curious to hear your thoughts or the factors that you're weighing when you think about what tumor types might be most attractive, which checkpoint inhibitors, which PD-1 or PD-L1, what setting or kind of line of therapy, and are you prioritizing sort of the fastest possible path to market relative to the maybe largest potential commercial opportunities, kind of how you weigh those factors?

Okay. And can you hear me? Because we were having some technical problems with the conference. Can you hear me clearly?

Yes, I can hear you, Howard.

Okay, good. So look, I think there's a lot of opportunities to move NKTR-214 forward. And as we've said a number of times, clearly checkpoint inhibitors aren't going to work very well if the tumor doesn't have TILs. If the tumor is cold, and not hot, you're not going to see a very effective use of checkpoint inhibitors.

So, I think clearly we'll want to move forward in combination with checkpoint inhibitors. You can imagine that there are lots of opportunities there, whether we do that ourselves, whether we do that in collaboration with someone else. I think there's lots of possibilities for exploring the combination of NKTR-214 in combination with checkpoint inhibitors.

So, we haven't laid out the entire program, yet. We're in the process of designing these combination studies, which we will initiate this year. We will be looking at NKTR-214 further as a single agent, and we will be looking at it in combination with checkpoint inhibitors. And you can imagine, and you can imagine the clinical indications or the cancer indications. You can see where checkpoint inhibitors are indicated.

So, I think at this point it's a bit premature to define the program, but suffice it to say there's an incredible interest in NKTR-214 because it does serve a very, very important use in cancer immunotherapy. And it will -- if it works, it will clearly change the way cancer immunotherapy is practiced.

Now, I will also point out that we want to try to move NKTR-214 as early as we can in the treatment cascade, and you can imagine that moving upline is important for us. So, overall, I think we're making great progress. I think we will be talking at further meetings about how we plan to move NKTR-214 forward.

Thank you.

Thank you. Our next question comes from the line of Josh Schimmer with Piper Jaffray. Your line is open.

Hi, thanks for taking the question, we'll stick on 214, maybe some questions for Jonathan. At what point in the dose escalation do you think you'll get an active level of exposure? How many patients worth of data do you think you'll have at an active dose? And what signal should investors be looking for with regards to response rate or rate of turning cold tumors hot? Should we be looking at Proleukin as a proxy, is that kind of a right place to start with setting expectations? Thanks.

Certainly. So, as we've stated before, one of the main objectives of this first in-human trial is to assess the safety and the tolerability, pharmacokinetics and pharmacodynamics of NKTR-214 in solid tumors, multiple types. And the objectives of the study in the standard dose escalation is to identify an active dose level that we will then use for further expansion into both as a single agent, and as we've discussed, also into combination trials with checkpoint inhibitors.

Now, there is an extensive biomarker program that I alluded to earlier in the call, and one of the main reasons of that is to provide immune monitoring components of our mechanism of action. We've had good success in our pre-clinical models, identifying the magnitudes and the quantities and the types of T cell infiltrates into the tumor, the cytotoxic state of those cells, and even changes in the clonality of the entire cell population within the tumor micro-environment. We've presented this data in multiple meetings earlier this year, and we're making those same analogous measurements in the clinical trial as well.

And we're using the totality of all of that evidence in order to really guide the future development and use of NKTR-214.

Hi Josh, this is Ivan, and just to add to what Steve said, you'll recall -- and we've said this previous -- we actually started with a dose that we believe, based on our preclinical experiments, you do go into it with a dose, even the lowest dose we believe to be sort of an active dose. And then, as we've said previously, we sort of step up by doubling that dose. The original dose was .003 mgs per kg. As Jonathan said, we've -- clearly there's a bunch of things we're looking at. We're clearly trying to define the sort of the recommended Phase 2 dose. We're looking at safety, extensive biomarker program, and of course we'll be looking for responses.

And all of these factors, we're going across a range of tumor types, but all of these factors will be taken into consideration as we pick the Phase 2 dose, and also as we pick the dose that we go into combination with.

Got it. Maybe one quick question for Gil if you're on the line, with the new SEC accounting rules on stock-based compensation, what share count should we be using for next year? Thanks.

Yes, hey, Josh. So, we haven't given guidance for next year yet, we look forward to doing that in the first part of 2017. We don't expect any major changes to our stock-based compensation, based on the new SEC rules. So, I think you'll see a consistency (technical difficulty) past years.

Okay, thanks very much.

Thank you. Our next question comes from the line of Debjit Chattopadhyay with Janney Montgomery Scott. Your line is open.

Thank you, and good afternoon. So, could you contrast that there was -- specifically talking about 214 here, could you contrast that there was patients that were receiving versus the high-dose IL-2 knowing that even the first dose was potentially therapeutic? The reason I ask this, is because IL-2 has historically given very rapid responses, unlike other IO drugs. So, if you were starting with close to a therapeutic dose, should we not be seeing some degree of responses in patients other than [we get the] data?

So, just to be clear, what we said is we started at 0.003 mgs per kg but we -- and we will be talking about the sort of clinical data towards the end of this year, but we haven't said anything about it. Other than the fact we have not seen vascular leak syndrome, we've not spoken about our results of the clinical study to date.

Fair enough, but back to the question, then. So, IL-2 traditionally has given very rapid responses, unlike any of the checkpoint inhibitors including CTLA-4. So, should we not be -- should we be surprised, negatively surprised, if you don't see responses even at the higher dose cohorts?

As I said before, I think we're not going to speculate on clinical results at this point, but we -- it is our plan to talk about clinical data before the end of this year.

Okay, then the study was started like eight months ago. I believe you have six building cohorts here. The fact that you haven't seen any VLS issues yet, how far along are you in the study given that it's been eight months, and physician interest was pretty compelling back -- middle of last year?

Well, look. I think at this -- I can tell you that we can't certainly give out the data yet on how many patients are enrolled and such, but you can imagine that we're progressing nicely. Everything is on track, and we have seen no instances of vascular leak syndrome. So, I think we're very comfortable with that, and I think at this point we feel fairly safe in saying that we've overcome some of those problems associated with high-dose IL-2.

But, what we can't do is get into now on this conference call, the specifics of the clinical trial data to date. We will announce it when we announce the top line data. I wanted to give everybody some comfort that at this point, we see no vascular leak syndrome, and I think that's a very important criteria for looking at this trial.

And then one question on NKTR-102 for breast cancer patients with CNS mets. Do you have an SVA to use the proposed study for -- the single study for an NDA, or can you take it back, some of the data from the BEACON study? Thank you so much.

What we have done, as we said previously, is we did meet with FDA and certainly they've reviewed the design of the study that we're conducting, and if that study is successful we believe they will review this as -- for a potential NDA in the US.

Thank you.

(Operator instructions) Our next question comes from the line of Bert Hazlett with Ladenburg. Your line is open.

Thank you. My question is focused on 181. Is the data for 181 -- I guess just talking about the timetable, so you fully-enrolled the trial. Can we talk about the endpoint? I think it's a 12-week endpoint? And then when the data should be available?

Not to split hairs, but it seems like first quarter is a little extended with regard to that data if you're fully-enrolled in this trial. And then, just more broadly on 181, could you talk about the strategy with regard to the importance of the portfolio and partnering, and how you're thinking about that molecule specifically as we go forward and build out the opportunities you have in front of you? Thank you.

Let me take the latter part of your question first, and then we'll turn it over to Ivan. I think -- look, we've said all along that if we're successful with NKTR-181 we would like to find a partner for it. I don't really plan for Nektar to build a major sales and marketing organization in the primary care space. At this point, I think that would be something that we would not want to focus on. So, look -- clearly, a collaboration, a partnership, co-marketing, etc., for something like NKTR-181 is very important to us.

And, if NKTR-181 is a success in the Phase 3 study, then we've made a new opioid molecule that is much, much safer, will be much better tolerated, much more pleasing for patients as well as solving a major problem in our society which is abuse of opioids. So, I think it has a lot -- it will get a lot of attention.

I don't think we will have any problem finding an important marketing partner for it. But I don't think that Nektar is going to put in place a sales organization as a sole entity to approach the primary care marketplace. I think we're much better off positioning ourselves to build an organization to deal with immuno-oncology.

But, let me ask Ivan to comment on what we expect to see in the trial.

Yes, hey, Bert. Thanks for the question. So yes, it seems like a long time, but you'll recall that there are various steps to this study.

Firstly, patients need to go through a sort of open label, up-titration period, where we find their appropriate dose of NKTR-214. Then they get randomized, and the randomization period is a 12-week period, and then there's a brief follow-up period after that. And of course, at the end of that we have to bring all the data, and we have to lock the database.

So, that puts you well into the first quarter of 2017. I don't think we've been more specific about the timing in that regard, but it certainly puts you well into that period.

Okay, thanks. And then just very quickly, the timing of the HAL study and how we should potentially hear those results, as well?

Yes, so the HAL study will be initiated at the end of this year, and because it -- I don't think we spoke about the entire design externally yet, but because sort of the number of arms, and it's sort of one of these Latin-square-type designs where you have to have different cohorts being treated in the same way, that study will take a little while. Obviously not as long as an efficacy study, but we expect to have data from that some time in Q2. So, data from SUMMIT-07 in Q1, data from the HAL study in Q2.

Okay, thanks much.

(Operator instructions) Okay, and I'm showing no further questions at this time. I'd like to turn the call back over to Howard Robin for any closing remarks.

Okay, thank you, and I want to thank everyone for joining us today, and I'd like to thank our employees for all their hard work and dedication to the Company.

And importantly, as you can see from the call, we have a number of milestones and catalysts coming up for Nektar over the next several quarters. We have the Phase 1 dose escalation trial data for NKTR-214, the Phase 3 data for the Bayer programs, Phase 3 data for NKTR-181 efficacy, Phase 3 data for Fovista from Ophthotech, and the potential approval of Onzeald in Europe.

So, lots going on over the next few quarters, and we look forward to seeing many of you at the various conferences and medical meetings throughout the Fall. So, thank you for joining us. Thanks.

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