Nektar Therapeutics (NKTR) 2017 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Nektar Therapeutics Third Quarter 2017 Financial Results Conference Call.

(Operator Instructions)

As a reminder, this conference call may be recorded.

I would now like to introduce your host for today's conference, Ms. Jennifer Ruddock, Senior Vice President of Investor Relations. Please go ahead.

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

On this call we expect to make forward-looking statements regarding our business, including potential regulatory approval milestones and commercial launch timings, the timing of future clinical trials and clinical trial results, clinical development plans, the therapeutic potential of certain drugs and our drug candidates as well as those of our partners, our financial guidance for 2017, 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 the Form 8-K we filed today and our most recent Form 10-Q, which is available at sec.gov.

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

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 to everyone for joining us today for our third quarter conference call.

On today's call we will review the many upcoming milestones for Nektar's pipeline over the next 6 months, including our planned submission of an NDA for NKTR-181 and the continued advancement of our IO portfolio, including NKTR-214, NKTR-262 and NKTR-255. We will also update our financial guidance for the remainder of 2017.

As you know, we will see many of you at the SITC Conference at the upcoming Analyst Event, and we plan to discuss our NKTR-214 program and the rest of our IO portfolio in more depth at the event, so we will keep our comments brief today in anticipation of the important presentation with our clinical investigator panel on Saturday.

First let's review the substantial progress we've made with NKTR-181, which has emerged not only as a critically important new potential medicine to treat patients with moderate to severe chronic pain, but also as an important building block in our nation's effort to solve the opioid public health emergency and stem the tide of new opioid addiction.

As you know, our data package for NKTR-181 includes an extensive amount of efficacy and safety data in over 2,100 patients and healthy subjects. This includes our 600-patient Phase 3 efficacy trial, our 2 human abuse potential studies, our 630-patient long-term safety and efficacy trial, as well as a wide range of PK and PD studies of therapeutic and super therapeutic doses of NKTR-181 in over 450 healthy volunteers.

Our CSO, Steve Doberstein, and our Head of Regulatory, Carlo Di Fonzo, recently led discussions with the agency in a Type C meeting in October to discuss our plan to submit an NDA for NKTR-181 for the treatment of moderate to severe chronic low back pain in patients who are new to opioid therapy, also known as opioid-naive patients. I also participated in the meeting.

We had an extremely productive conversation with the agency, and they clearly recognize the opioid crisis. And as a result of their input we are planning to submit an NDA with the current extensive data package we have for NKTR-181. Since we only recently completed the meeting we are awaiting final minutes from the agency.

The staff indicated that a single efficacy trial for approval of a new molecular entity opioid to treat chronic pain will be a review issue and the NDA will also likely go to the advisory committee for discussion and recommendation. In the recent meeting the agency also confirmed that the overall safety database is adequate for an NDA submission.

The agency further confirmed that Nektar has an adequate human abuse potential assessment data package to support an abuse potential assessment review in the NDA, and that both the abuse potential package and the safety database appear to be adequate to warrant a discussion of a less than C2 schedule.

As a result of these positive conversations we have already requested a pre-NDA meeting. To prepare for NDA submission we are currently completing the final steps needed for the NDA, which includes real-time stability studies for the CMC module. We are on track to submit the NDA in April of 2018.

The opioid abuse and addition epidemic has clearly become a central focus of the FDA, Congress and the White House. It is one of the few truly bipartisan issues facing our country, and we've heard from our discussions with all of these stakeholders. I personally have had the privilege of meeting with the White House and key members of Congress to discuss the importance of NKTR-181 as a tool to help in the fight against the growing opioid epidemic.

In the past several months I have also participated in a number of important government-led initiatives to discuss opioid abuse topics, including a meeting of the President's Commission on Combatting Drug Addiction and the Opioid Crisis, which was led by Governor Chris Christie, and an HHS Secretary Roundtable on Opioids, led by Dr. Elinore McCance-Katz, who is the First Assistant Secretary for Mental Health and Substance Abuse.

Steve Doberstein also has been actively involved with the leaders from the NIH and NIDA as a participant in the public-private initiative to address the opioid crisis. In all of these meetings, our scientific research and clinical data for NKTR-181 have been acknowledged as an extremely important part of the solution to help prevent the next generation of opioid addiction in this country.

As the first new full mu-opioid agonist molecule to be developed in over 50 years, NKTR-181's unique inherent properties position the drug to not only help stem the rate of new addiction to conventional opioids, but also to reduce diversion of prescription pain medications for abuse. The comprehensive NKTR-181 data established the potency of its analgesia, its low abuse potential, its favorable safety and physical dependency profile, and the strength of its molecular structure, which can't be tampered with, broken or converted into a rapid-acting euphorigenic opioid form. We're also actively engaged in conversations with potential commercial partners for NKTR-181 so that this important new medicine can be made available to patients.

Moving on to NKTR-214, we are very excited about the maturing data from the ongoing trial for NKTR-214 in combination with nivolumab. As a T-cell growth factor, NKTR-214 provides an important and singular new mechanism in immuno-oncology. NKTR-214 acts as a biased agonist on the IL-2 pathway to expand specific cancer-fighting T cells and natural killer cells directly in the tumor microenvironment in cancer patients. It also increases expression of PD-1 on these immune cells.

This positions NKTR-214 to provide clinical benefit to many patients who currently can't respond or respond suboptimally to checkpoint inhibitors. Further, NKTR-214 can be administered on an antibody-like dosing schedule, with an exceptionally favorable tolerability profile in combination with a checkpoint inhibitor. There is simply no other IO cancer treatment of its kind in development.

Many of you have already seen our press release this morning for the upcoming SITC presentations. We have seven different abstracts being presented for our IO portfolio. As you saw this morning, the PIVOT NKTR-214/nivolumab abstract contains highly compelling preliminary efficacy data for the first set of 16 melanoma and RCC patients in dose escalation, which had at least one post-baseline scan by the end of July.

Clearly, these early data that show strong response rates in the first set of patients are exciting and earned us an oral presentation at SITC. For Dr. Diab's oral presentation on Saturday, November 11, he will present efficacy and safety data from the full 38 patients in the entire dose escalation portion of the PIVOT trial, including non-small cell lung cancer patients who are PD-L1 negative and have progressed on prior chemotherapy.

As I stated earlier, we are not going to go into much more detail today, as the presentation is this weekend. We continue to be extremely pleased with how the data are maturing and how NKTR-214 is clearly emerging as a differentiated IO asset that has strong synergy with checkpoint inhibition, particularly in PD-L1-negative patients as an area of high unmet need in today's treatment paradigm.

Nektar and Bristol are continuing to enroll patients in the expansion cohorts in the Phase 2 stage of the PIVOT trial across multiple tumor indications. Enrollment is proceeding rapidly, with approximately 50 patients already dosed in the expansion. At SITC we will provide more insight on these expansion cohorts and discuss how our data from the dose escalation phase of the study is shaping our planning for the future development of NKTR-214, including potential registrational trials of NKTR-214 with nivolumab or other checkpoint inhibitors.

Our objective is to position NKTR-214 as a keystone therapeutic in IO, and the emerging data from the PIVOT studies reinforces that this objective is achievable. In addition to the PIVOT trial, we are also conducting the PROPEL trial, which is designed to show that NKTR-214 is also synergistic with other checkpoint inhibitors TECENTRIQ and KEYTRUDA.

Based on its mechanism as a T-cell growth factor we believe that NKTR-214 could be combined with many other agents beyond checkpoint inhibition, as well. For example, at ASCO earlier this year we showed that after NKTR-214 treatment we observed an increase in ICOS-positive CD8 T cells, suggesting NKTR-214 plus an ICOS agonist could be a rational combination.

Another example that we've mentioned in the past is the work we have underway with Takeda in liquid and solid tumors with 5 separate Takeda clinical compounds. We expect to have our initial preclinical data from these combinations before the end of this year.

As you know, in addition to NKTR-214 Nektar is developing a broad portfolio in immuno-oncology, and we will present the development plans for this portfolio at our IR event at SITC. The portfolio also includes NKTR-262, a TLR agonist, and NKTR-255, an IL-15 candidate which can stimulate both NK cells and memory T cells.

The preclinical data for the 214/262 combination are particularly compelling. We are on track to file the IND for the combination trial of NKTR-262 and NKTR-214 by the end of this year in order to dose our first patients in early 2018. As a novel small molecule TLR agonist, NKTR-262 was designed specifically to be administered with NKTR-214, and, most importantly, would give Nektar our first wholly owned combination regimen in IO.

Before I hand the call to Gil for a brief discussion on our partnered portfolio and financial guidance, just a quick note on the progress of NKTR-358 with our new partner Lilly. This morning Nektar and Lilly presented very strong proof-of-concept preclinical data for NKTR-358 at the 2017 American College of Rheumatology Annual Meeting in San Diego.

The collaboration with Lilly is progressing extremely well. The project team, composed of Nektar and Lilly researchers and clinicians, is working closely together to shape the development of NKTR-358, and NKTR-358 is advancing through the Phase 1 single ascending dose escalation trial in healthy volunteers.

As a reminder, the first Phase 1 study evaluates safety, tolerability, and mechanism-based immunological biomarkers associated with the pharmacodynamics of single subcutaneous doses of NKTR-358. Lilly and Nektar are planning to start the Phase 1b trial, which will be multiple ascending dose-escalation studies of NKTR-358, in early 2018. The Phase 1b trial will include evaluation of NKTR-358 in both healthy volunteers and patients with lupus.

With that, I'll hand the call over to Gil.

Thank you, Howard, and good afternoon, everyone. On today's call I will provide an update on our partnered programs as well as updated financial guidance for the remainder of 2017.

In the third quarter Nektar and Eli Lilly announced a significant collaboration for NKTR-358 which includes a broad development plan to evaluate NKTR-358 in at least 4 different autoimmune indications in the clinic. Lilly paid Nektar an initial upfront payment of $150 million in the third quarter, $128 million of which we recognized as revenue in Q3.

In addition, we will receive up to $250 million in development and regulatory milestones through various phases of development, success and regulatory approval. For Phase 2 and Phase 3, with Lilly covering 75% of development cost, our royalty rates will start in the mid-teens and reach the low 20s when NKTR-358 achieves $500 million in annual global sales.

So, in essence, Nektar is funding a quarter of the development and retaining a one-third ownership of the drug. Lilly is also responsible for all costs of global commercialization, with Nektar having a co-promote in the United States.

Turning to our on-the-market royalty-bearing assets, our royalty revenue from MOVANTIK and ADYNOVATE continued to grow in the third quarter. Royalties from MOVANTIK and ADYNOVATE grew 25% in the third quarter of 2017 as compared to the second quarter of 2017. Royalty contribution from these products has grown 82% year-to-date as compared to the first 9 months of 2016. On the market expansion front, Shire is awaiting European Commission approval for ADYNOVI around the end of 2017.

Next, I'd like to give a brief update on our Bayer collaborations that are in late-stage development. With respect to Cipro Inhale, Bayer has filed an NDA with the FDA based upon the Phase 3 RESPIRE studies. The FDA antimicrobial drugs advisory committee will meet on November 16 to discuss Bayer's NDA.

The committee will discuss the NDA for the proposed indication of reduction of exacerbations in noncystic fibrosis bronchiectasis, adult patients, with respiratory bacterial pathogens. As a reminder, Nektar will receive an average 10% royalty on sales of this therapy if it is approved.

For Amikacin Inhale, Bayer's Phase 3 trials are complete, and Bayer still expects to report top-line results from this program before the end of 2017.

Now, on to our updated financial guidance. We still plan to end 2017 with approximately $350 million in cash and investments, including the $150 million upfront payment we received from Eli Lilly in the third quarter.

We are raising our full-year 2017 revenue guidance to a range of $250 million to $255 million, which includes approximately $130 million as a result of our NKTR-358 collaboration with Eli Lilly, of which $128 million was recognized in Q3. We expect to recognize the remaining $20 million of the upfront payment using a proportionate performance method through the end of 2019.

We still expect 2017 royalty revenue to be approximately $55 million to $60 million, which includes approximately $30 million to $35 million in royalties from MOVANTIK and ADYNOVATE, with the remainder from noncash CIMZIA and MIRCERA royalties.

We anticipate that 2017 GAAP R&D expense will range between $250 million and $255 million, which includes approximately $29 million of noncash depreciation and stock compensation expense.

2017 G&A expense is projected to be approximately $50 million. G&A expense includes approximately $13 million of noncash depreciation and stock compensation expense.

To reiterate our cash guidance for the year, we plan to end 2017 with approximately $350 million in cash and investments. It is important to keep in mind that our 2017 projected ending cash position does not include proceeds from any potential partnerships.

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

Thank you.

(Operator Instructions)

Our first question comes from Jessica Fye, from JPMorgan.

This is Ryan on for Jess. Just a couple on 214. As we go into SITC, how do we think about the duration of follow-up that we'll have for the lung patients? And then, second, I guess how we should think about response rates? Should we think about it more broadly based on the overall n in each tumor type, or would you -- could we think about the data being more sort of categorized by, say, those with only 2 scans? Thanks.

This is Jonathan Zalevsky. Hello. So, at SITCI we will show spider plots so you can sense of the patients that are on the study. And, of course, remember the data that we're showing, it's from an ongoing study. So we'll be showing you data from patients that are continuing on the trial.

Okay. And then in terms of how they might be broken down, I mean, could we see them sort of categorized by like the number of scans, as well?

Yes, so, and remember, when you look at a spider plot what you're looking at is each point on the spider plot is a scan. Right? So when you're looking at multiple points on the same line you're seeing the same patient being scanned multiple times. So you will be able to see that data from patients that have had multiple scans on the therapy. And then, of course, when you look at multiple scans you're also looking for patients that have multiple confirmations of their overall response profile. So we'll be showing you all of that data.

Okay.

Yes, and we've also broken down the data by patients who are PD-L1 positive and negative.

Okay. Great. Thank you.

Our next question comes from Chris Shibutani, from Cowen and Company.

I wanted to ask questions about 214 and the data that we'll see at SITC, in particular with regard to understanding the baseline PD-L1 status for these patients. You mentioned that we will see some of that. The questions that I have center around should we expect that efficacy could meaningfully differ between the 3 different tumor types as a function of PD-L1 status, positive or negative? And then, secondly, thinking also about the baseline status, should we be thinking about implications for efficacy in the naive versus the refractory setting? In particular, how can we extrapolate or what would be appropriate to read forward in that regard? Thanks.

Thanks, Chris. So, we are characterizing the baseline PDL status for almost all of the patients in the trial, and we will be showing response broken down by baseline PD-L1 status. And so you'll see that across all of the tumor types that we'll be presenting data on, which includes melanoma patients, renal cell carcinoma, as well as non-small cell lung cancer. And so as we've presented in earlier presentations, for example, if you remembered, at SITC last year, we showed you that NKTR-214 treatment was able to convert a patient that was PD-L1 negative at baseline to PD-L1 positive on treatment. And so we have a good understanding that PD-L1 is really able to change the whole tumor microenvironment, and as a course of that it's able to change what we expect will be the possibility of patients that are even PD-L1 negative to have the chance to benefit from treatment of the combination of NKTR-214 plus nivolumab. And so we'll be showing you all of that kind of baseline data. And then, in addition -- well, yes, so you will be able to see all of those responses broken down, and you'll also see the rates, as well, associated with that.

And as far as thinking about the refractory setting, which we won't see at SITC, but how should we interpret and think about the baseline PD-L1 status in that refractory population?

Yes, so in the dose escalation part of the trial, remember that that was all done in approved indications for nivolumab. So you'll be looking at first-line and second-line instances. But, as we've explained before, in the dose expansion portion of the trial, which began in August, there we are looking at relapsed/refractory populations, as well, and we'll be presenting data in a future meeting for that.

Our next question comes from Difei Yang, from Mizuho.

This is Matt on for Difei. We were wondering, if you could, of those 16 patients, do you know the breakdown between the MM and RCC, the two different melanomas?

Yes, there are 8 melanoma patients, that's correct, and 8 RCC patients. That's for the 16 that are listed in the abstract.

Yes, for PIVOT-02. And then aside from -- sorry, go ahead.

No, and I was going to say but you'll see data from all 38 patients as we announced in our press release this morning that were included in the dose escalation. So you'll see more data on Saturday.

We're definitely looking forward to that. And then in terms of the next forum in terms of time frames, when could we expect more data related to PIVOT-02 or PIVOT-04 aside from this upcoming weekend?

Yes, we'll give an update on that at our presentation this weekend.

Great. Thank you so much.

Our next question comes from Bert Hazlett, from BTIG.

Just on 181 for a minute, does the positive developments that have happened with the regulatory agency alter your commercial strategy or your partnering strategy? And maybe you mentioned it, but should we -- is the possibility for expedited review on the table, as well? And I have a 358 question, as well.

Okay, well, look, I can't comment on the expedited review because we have to submit our NDA and then the FDA can make decisions on how they want to proceed. I can tell you that, as I said earlier, we've had discussions, intense discussions with the White House, members of Congress, and all the parties that are principally involved in dealing with this opioid crisis. And I think there's a general high level of interest in NKTR-181. That said, Nektar has evolved into an immuno-oncology company. If you look at our portfolio in immuno-oncology, with 214 and 262 and 255, and I'm not even discussing the things that we have at the preclinical stage prior to that, I think we clearly plan to find a partner for NKTR-181. We don't intend to become a pain company. We're focused on immuno-oncology. And therefore a partnership on 181 is still absolutely in the plans.

Okay, thank you. And then 358, has there been, as you interact with your partners in Indianapolis, has there been an evolution of the indications that could be pursued with that molecule, given the plethora of opportunities that are in front of it, and has there been any particular alteration of the order of any indications? Any additional clarity you could provide there would be helpful.

Yes, thanks, Bert. This is JZ. So, no, we definitely still continue to prioritize lupus. And, as we announced, even in the Phase 1b multiple ascending dose study we will be including patients with lupus in some of those dose escalation repeat dose arms of the study. We've also continued to discuss additional indications such as gastrointestinal diseases like UC, Crohn's and psoriasis and so forth, and they all remain key parts of the discussion. But we're definitely continuing to focus on lupus, and that will be the first patient population we'll enroll, starting with the MAD early next year.

Okay, terrific. And just one quick one, when do you think we'll see the first human data on 255 in combination with 214?

Good question. So let me maybe take a step back. So with 262, which is our TLR agonist, so that IND --

I meant 262, forgive me, I meant 262.

Yes, no worries. So, yes, that IND is still on track for the end of this year, and in very early 2018 we'll start the combination clinical trial with NKTR-262 plus NKTR-214. So I'd expect that we would have an opportunity to show some of those early first-in-human results at an upcoming medical meeting. That would be in the future after we begin that study, because it will just start early next year.

Okay. Thank you. Congratulations on the progress.

Our next question comes from Michael Higgins, from ROTH Capital Partners.

A couple of questions on 181 if I could. With your NDA on 181 not including a pivotal trial from the opioid-experienced patients, which you had agreed to with the FDA in your end-of-Phase 2 meeting, but nonetheless your NDA is, I guess, your skinny NDA with over 2,000 patients, it's positive news. A question is at this stage did the agency describe any changes in the stat methods, or is the bar potentially higher because you've got -- because you're not including that opioid-experienced patient group?

Yes, no, that didn't come up at our meeting with the FDA, and I think we recognize that at this point we have data in chronic lower back pain on opioid-naive patients, and that's what the NDA submission will be based on. I think given the fact that there's a significant opioid crisis I can't comment on how narrow or broadly the FDA wants to review this at this stage, but I certainly don't think they have any concern with the statistical design of the study that we've run.

You don't think the label would be only including opioid-naive patients? From what I'm hearing it doesn't sound like there would be any language at all regarding opioid experience.

It could be limited to opioid-naive patients. That's entirely possible. But also remember that that's the population that is directly affected by the opioid crisis. I mean, you have patients that are already addicted to opioids, and NKTR-181 is not the solution for helping them with their addiction problems. It potentially could be, but it's not -- that's not necessarily what we looked at. If you look at the patients who are opioid-naive, patients who have chronic lower back pain, for example, who have not taken an opioid in quite some time, those are the patients that are subject to the problems we see with the current crop of opioids. And we hope to make a big impact there. So I don't see that as being an issue either way.

Great feedback. Good to hear. Then, finally, on 181, any updated thoughts for us on the partnering, if you're looking for U.S. or looking for global, or what your thoughts are there?

Well, the partnership we're looking for would be global in nature. Of course, there's certainly a more significant opioid crisis in the U.S. than there is ex-U. S. But the partnerships that we're looking at would span the globe. It's not a U.S. or European-only partnership.

Appreciate it. We look forward to seeing you guys this weekend. Thank you.

Our next question comes from Andy Hsieh, from William Blair.

I do want to congratulate the Nektar team on the significant progress with NKTR-214 as well as 181, so, accordingly, I have two questions, one on each asset. So, for JZ, on the abstract that's released today regarding the Phase 1/2 PIVOT-02 trial, do you mind telling us how many of these responders are confirmed versus not confirmed?

So, yes, that's actually something that we will not talk about right now, but we'll present all of that to you at SITC. So Adi in his podium presentation will cover that. He'll cover the patients that were reported in the study. Because, again, they continued on in the trial. So he'll report a complete update of all of that. We'll also be showing you a waterfall plot which will show for of all the patients that were evaluated, of those 38, we had scans available, and we'll be seeing -- you will see a waterfall plot of all of those responses, as well as spider plots in each of the different indications. So please, yes, please come to the event and you'll see all of that data unveiled.

Great. Thank you. And in terms of 181 I just want to get a sense about the definition of opioid naive. Is there a consensus among the physicians or specialists about what that definition is, and maybe from the regulators, as well? Because I foresee, if you get a label that is just for opioid-naive patients, is there a way for doctors to check, to double-check whether he or she is prescribing to the right patient population?

Well, there are criteria for that, and it's generally patients who have not had opioids in 6 months or are taking less than 10 morphine-equivalent units. There are some guidelines for that. So I think opioid-naive patient doesn't mean a person who has never taken an opioid. It means that they haven't taken opioid recently or they're on a fairly low dose of opioids. We used those guidelines in our trial. So when we studied opioid-naive patients we followed the guidelines that the general population and that the FDA looks at for the definition of opioid-naive.

Great. Thank you.

Our next question comes from David Steinberg, from Jefferies.

First, congratulations on the FDA decision to bypass the Phase 3 and go right to the NDA. That's pretty impressive. It doesn't happen very often. So two questions on that. The first thing is should we assume that because of the FDA's position that the terms of a potential partnership have gone up? And, secondly, did it bring any new additional partners to the table or because the meeting was so recent you haven't seen that happen? And then, secondly, you mentioned you're hoping for a C3 or C4 like tramadol. Could you give us more granularity on those discussions? Would the FDA perhaps go straight to that, or maybe give you a C2 with a promise that you could move to a C3 within a certain period of time? Any granularity would be appreciated. Thanks.

Yes, look, I think, look, the FDA has to take our submission, they have to file it, they have to review it, and then we will -- then they will engage us in discussions. And, as I said earlier, the issue of one efficacy trial is a review issue. It'll ultimately most likely go to an ad com for discussion. But I think we were very pleased. The FDA clearly recognized that there's a major opioid crisis in this country. And understand that we put almost all of our effort into the human abuse potential side and the safety side. I think there's very little debate that mu-opioid agonists are good analgesics. That doesn't need a lot of scientific proof. And we all know what this molecule is. It's very well defined. It's very well characterized. The real issue is can you demonstrate that you don't cause abuse, that you don't cause likability, that you don't cause the kinds of problems associated, safety problems associated with the current opioids. And I think we did that in a very meaningful way. And that's where we put all of our effort into the trial, into the abuse potential side and the safety side, and we have an incredibly powerful safety database. So on a risk-benefit ratio, reward ratio, I mean, there's very little risk to NKTR-181 and there's a lot of potential reward, and I think that's how we approached it. In terms of scheduling, the FDA did say they believe our data package is adequate to allow the discussion, to allow the discussion as to whether we should have labeling that is better than C2. That would be 3 or 4. Obviously that's a review issue. They're not going to comment now on whether they believe that our data package is adequate for that. But they clearly stated that they believe we have enough data so that it warrants that discussion. And, quite frankly, it's all going to be a review issue at that point.

And just one more clarification, after that meeting did the FDA basically said look, you've got what you need to file, go file, or is it more the company saying let's go file and we'll take our chances. Just wondering if you can give us a little granularity on that.

Look, the FDA will never tell you please file it -- please submit it, we're going to file it. They're never going to tell you till you get it and they review it for the first pass. What they did say is that the issue of one efficacy trial will be a review issue. They did say that they plan to bring it to an ad com. And they did recognize the opioid crisis. And they did say that they hope to move this program forward. And quite frankly, like I said earlier, we don't have the minutes back from the meeting yet, so I've got to review the minutes when we get those back. But you know the FDA never tells you go ahead and submit your NDA. We're going to file it. They don't do that. So it was a very encouraging meeting. It was extremely productive. They recognize that there's a major opioid crisis. I think everybody recognizes that the opioid agonists are good analgesics. And I'm hopeful that we move this drug forward as rapidly as possible.

Okay. Thanks.

And I am showing no further questions from our phone lines now, and I'd like to turn the conference back over to Howard Robin for any closing remarks.

Well, thank you for joining us today. I think we've been working very hard at building our IO portfolio. We hope to see many of you if not all of you at SITC, and it should be a very interesting meeting. And, again, I want to thank all the Nektar employees and scientists for all the incredibly hard work they've put into making what I think is one of the best IO portfolios in the business. So thank you, everybody. Appreciate it.

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