Nektar Therapeutics (NKTR) 2024 Q3 法說會逐字稿

Good day. And thank you for standing by. Welcome to the Nektar Therapeutics third quarter, 2024 financial results conference call at this time. All participants are in a listen-only mode.

(Operator Instructions). I would now like to hand the conference over to your speaker today. Vivian Wu. Please go ahead.

Thank you, Crystal and Good afternoon, everyone. Thank you for joining us today with us on the call are Howard Robin, our President and Chief Executive Officer, Dr. Jonathan Zalevsky, our Chief Research and development Officer, Dr. Mary Tagliaferri, our Chief Medical Officer, and Sandra Gardiner, our Chief Financial Officer.

On today's call. We expect to make forward-looking statements regarding your business including statements regarding the therapeutic potential of and future development plans for drug candidates and research programs.

The timing of the initiation of clinical studies and 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 agreements, financial guidance and other certain statements regarding the future of our business.

Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict 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 our Form 10-Q that was filed on August 9, 2024, 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 development or otherwise, a webcast of this call will be available at on the IR page of Nektar's website at nektar.com

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

Thank you, Vivian. Thank you all for joining us today.

During the third quarter, we made significant progress in advancing our highly promising pipeline focused on immunology and inflammation. Importantly, we are laser focused on advancing our Phase 2 studies for our lead aspect.

Our lead asset REZPEG Alvis Lupin also known as REZPEG, which is designed to directly expand functional Tregs cells and engage multiple immune regulatory pathways in patients with autoimmune disorders. As REZPEG generated promising early data which support its potential to become a highly differentiated and new mechanism in the treatment of Atopic Dermatitis and Alopecia.

There are approximately 15 million people living with moderate to severe Atopic Dermatitis in the USA. Today, it is estimated that under 10% of those patients who could receive biologics today are actually receiving treatment. We believe that new mechanisms are the key to growing this underserved biologic market.

This is why we're so excited by REZPEG potential as a first in class T regulatory cell mechanism for these patients with critical unmet need. Enrollment in our Phase 2 study and Atopic Dermatitis is on track for a top line data readout in the first half of 2025. We're very pleased with the enrollment pace for this large 400 patient Phase 2b study and J Z will share more on the ongoing study. In a moment.

We believe there's also significant potential for REZPEG to help people with Alopecia Areata. Nearly 7 million people in the United States alone have or will develop the disease. The disorder significantly affects the quality of life for patients and the currently available Jack inhibitor therapies are not durable, have high relapse rates and carry significant safety risks. Therefore, there's an urgent unmet medical need for new therapies for these patients as well.

Enrollment in our second Phase 2b study of REZPEG in 86 patients with severe to very severe Alopecia Areata also remains on track for top line data in the second half of 2025. Two weeks ago, we published in Nature Communications, the data from the Phase 1b study of REZPEG and Atopic Dermatitis and Psoriasis.

These data taken in aggregate bolster our decision to proceed with the clinical plan and advance our Phase 2b studies in Atopic Dermatitis in OPEC area. And JZ will talk more about the important data from these publications later on in the call.

Turning to our pre-clinical programs, we continue to advance Nektar-165. Our novel TNFR-2 agonist antibody program given the importance of TNF receptor-2 Nektar-165 could potentially become a first in class treatment for autoimmune diseases such as multiple Sclerosis, Ulcerative Colitis and Vitiligo.

Earlier this year at EULAR, we presented the first pre-clinical data for this program showing that Nektar-165 demonstrated selective enhancement of T-reg cell function. And JZ will discuss more about that later.

We're currently conducting I&D enabling studies with the goal of preparing for an I&D submission in the second half of 2025.

Now leveraging our learnings from Nektar-165 we've also designed a pipeline of TNFR-2 containing bispecific molecules that pair TNFR-2 agonism with other antibody targets and we look forward to providing more color on this pipeline as development candidates emerge.

In addition to Nektar-165 we also have our [PEG CFS-1] program, Nektar-422 in pre-clinical stage that was engineered to selectively modulate resolution processes of inflammation. We're excited to announce that pre-clinical data spanning multiple animal models including collagen induced arthritis were selected for an oral presentation at the upcoming 2024 ACR convergence meeting in Washington DC.

This will be our first presentation of pre-clinical data from this program. And Nektar-422 has the potential applications and a number of therapeutic indications including acute and chronic inflammation. Next, I'd like to discuss Nektar-255 our [IL-15] program in Oncology.

We've recently announced multiple sets of data from this program published in blood and at ash, these data show that Nektar-255 can enhance the activity of CAR-T therapies. Today, we presented a late breaking abstract at city demonstrating the use of Nektar-255 in a new application and that abstract Nektar-255 showed the ability to recover radiation induced lymphopenia in patients with non-small cell lung cancer. And Mary will talk more about that program on the call today.

Now, before I hand the call to JZ, I want to briefly discuss our transaction. Our transaction announced this week earlier this week, we announced that we signed an agreement to sell our commercial peculation reagent manufacturing facility in Huntsville to Ampersand Capital Partners.

The PEG reagent facility will be spun out as a standalone Ampersand Portfolio Company, Nektar will receive $90 million in total compensation which is comprised of $70 million in cash and $20 million in equity ownership in the new portfolio company and we expect the deal to close on December 2.

In addition to serving the plant's existing customers, the new company will continue to serve Nektar's PEG supply needs for REZPEG and our other peculated programs in our pipeline. We will retain all rights to royalties and milestones under existing PEG's license agreements, including those related to [Dappy Pegol] which has already demonstrated positive Phase 3 [EPAC Lupus]

This strategic divestiture of the plant allows us to streamline our operations and further bolsters Nektar's financial position as we head into top line data readouts in 2025 the proceeds will extend our cash runway into the fourth quarter of 2026. And with that, I'll hand the call over to JZ for an R&D discussion, JZ.

Thank you, Howard. Starting with REZPEG, this program is the most advanced is IL-2 T Reg mechanism in the field. We believe there are major opportunities in both atopic dermatitis and alopecia areata that REZPEG could potentially address our Phase 1b data and atopic dermatitis demonstrated dose dependent efficacy and encouraging durability observed long after patients completed the 12-week induction period.

In fact, for both patients reported outcomes and physician assessed end points, we observed the same trends, rapid onset of effect, dose dependence and long-term durability of control, the rapid onset of action and the type of extended disease control. After the end of dosing, rivals are outperformed that of [DMAB] or JAK inhibitors.

And these promising data have us and physicians very enthusiastic about the potential for long lasting responses and infrequent maintenance dosing with REZPEG in atopic derma. As Howard mentioned last month, we published preclinical and clinical REZPEG data in nature communications.

The manuscript includes results from mouse models and two human Phase 1b studies in atopic dermatitis and psoriasis. All demonstrating the potential of REZPEG for the treatment of inflammatory skin diseases. The clinical results from these two different inflammatory skin conditions show that REZPEG improved physician assessed disease activity and patient reported outcomes

And these promising findings clinically validate the T reg hypothesis that causally restoring T reg function through a central pathway of [IO-2] receptor driven T reg rescue can have therapeutic potential across a variety of chronic skin diseases.

It also demonstrates that REZPEG can act on multiple disease driving pathways and is uniquely poised to address a diversity of immunopathology. Furthermore, a consistent safety and tolerability profile was observed across the studies and in line with previously published data.

the exciting cross indication clinical efficacy we observed is buttressed by serum biomarker analysis demonstrating that REZPEG could modulate multiple immune regulatory pathways to provide rapid onset and duration of efficacy.

In the atopic dermatitis study, we included longitudinal serum proteomic analysis, and it demonstrated the plurality of T reg mediated pathways with potential effects on tissue resonant memory T cell populations resulting in sustained efficacy.

Seen in the antigen challenged mouse models. And in the clinical trial, these proteomic findings further validate our therapeutic approach of using a T reg stimulator to dampen inflammatory responses and simultaneously restore immune balance in patients with chronic inflammatory skin diseases.

Overall, the totality of the observations including the biomarker analysis provide an understanding of how treatment with REZPEG led to dose dependent efficacy in the Phase 1b study over the 12-week treatment period including its rapid onset of action. And it also provides insight into pathways that could result in the sustained efficacy that was observed in the study even after treatment was removed.

And all of this supports the design of our ongoing Phase 2b study in atopic dermatitis which is enrolling roughly 400 patients with moderate to severe disease across three different regimens of REZPEG versus Placebo. Evaluated over a 16-week induction period.

After the induction period, patients that meet a threshold to advance from induction to maintenance will be rerandomized into one of two maintenance regimens at their original dose level to receive that dose level on either a once a month or once every three-month regimen.

The maintenance portion of the study is 36 weeks which will in total provide 52 weeks of treatment duration for patients in the study. We will also follow participants for one year after the conclusion of the 52-week treatment period, enabling us to evaluate the potential remittable effects of REZPEG enrollment is on track and approximately 130 clinical investigator sites are active across the US, Canada, Europe and Australia.

As Howard mentioned, we anticipate top line data from the 16-week induction period of this state to study in the first half of 2025 and data from the 36-week maintenance period of the study will be available towards the end of 2025 or early 2026.

Now, turning to Alopecia Areata which is a dermal disease localized to hair follicles in this disease. The patient's immune system attacks the hair follicle disrupting its normal ability to keep and grow hair leading to hair loss.

We believe there is strong rationale for REZPEG in this indication based on the role of T regs on the underlying pathology of the disease. The Phase 2b study is well underway and plans to recruit 84 patients with severe to very severe disease that will be randomized to REZPEG or Placebo.

Patients will be treated for a period of 36 weeks and observed up to 60 weeks in total. Our primary endpoint for this study is mean percent improvement in salt or the severity of alopecia tool at week 36. And we expect top line data in the second half of 2025.

Now turning to Nektar-0165 TNFR2 agonist antibody TNFR2 is highly expressed on T regs myeloid suppressor cells, regulatory B cells, neuronal cells and in t rags, TNFR2 agonism has been shown to potentiate the effector functions, suppressive functions and maintenance of T reg lineage stability, especially in the non-lymphoid tissue compartments.

Genetic studies show that if TNFR2 is absent, the phenotypic effect is autoimmunity as well as other conditions that resemble Fox P-3 loss of function. In contrast, its presence and activation of it signaling has been associated with the immune regulatory function and tissue protection effects.

Our TNFR2 agonist program is built upon many years of T reg experience that we've gained from studying REZPEG as an IL-2 receptor pathway agonist drives JAK stack signaling in T reg, which is critical to drive T reg proliferation and function in primary and secondary lymphoid organ.

TNFR-2. On the other hand, is the most abundant TNF superfamily member expressed on T regs and a key activator of NF-kB which also controls the Fox P-3 protein expression and is critical to maintain DRG function especially in the non-lymphoid organs.

Thus, with the REZPEG and TNFR-2 agonist programs. Nektar's pipeline provides target rationale for both lymphoid and non-lymphoid T reg. And this is one of the reasons why we are so excited about Nektar-165 we presented the first pre-clinical data for this program at Eular in June of this year.

And there were several key takeaways from that presentation. First, the TNFR-2 agonists we discovered are able to signal through the TNFR-2 multimeric receptor, a single arm monovalent antibody, which is a very novel effect for a TNFR-2 agonistic antibody.

Second, the clinical candidate Nektar-165 demonstrated very high specificity for binding and signaling through TNFR-2 on T reg with little to no binding and signaling in conventional T cells, NK cells or monocytes.

Third, Nektar-165 is a monotherapy drove T reg proliferation, upregulation of Foxp3 and other activation markers, primary T regs. The fourth, the PKPD of Nektar-165 and efficacy in the KLH-DTH model were confirmed in a human TNFR-2 knock-in mice model.

We are very excited with the unique and differentiated profile of the antibodies that were discovered and we are rapidly advancing Nektar-165 into the clinic and we expect to submit an I&D for this program in the second half of 2025 examples of indications that could be addressed include multiple sclerosis, mucosal immunology conditions such as ulcerative colitis and even dermal autoimmune diseases such as vitiligo.

Since the TNFR-2 agonist antibody specificities we discovered are active as single arm antibodies. We have leveraged this to design a pipeline of TNFR-2 containing bispecific molecules that pair TNFR-2 agonism with other specificities.

These novel assets take advantage of multiple mechanisms to bring about novel molecules with novel approaches for targeting autoimmune diseases. We look forward to providing more color on this pipeline as development candidates emerge for future clinical entry.

Overall, we have observed growing interest for a novel and selective TNFR-2 agonist like Nektar-165. And as we move forward with our I&D enabling studies, as well as with our progression of the bispecific pipeline, we will continue to be open to the opportunity of working with companies that have interest in these areas to strategize on the best path forward.

We have a second pre-clinical target in the immunology space PEG-CSF1 called Nektar-422. This program is a PEG modified hematopoietic colony stimulating factor protein. Current standard of care, chronic inflammatory disease therapies are designed to suppress inflammation and are not optimized for inflammation resolution and the restoration of tissue homeostasis, tissue function.

The goal of Nektar-422 is to stimulate inflammation resolution and tissue repair by targeting the expansion reprogramming and activation of anti-inflammatory tissue resident macrophages. An agent that possesses such biological properties could create a new class of anti-inflammatory therapeutics.

And this is our objective with Nektar-422 to discover Nektar-422, we use in vitro and in vivo screening of PEG-CSF1 conjugates to identify a CSF1 receptor agonist with a differentiated PK/PD profile compared to the native side effects.

And what we found was in vivo treatment with Nektar-422 shows a significantly reduced target media clearance, sustained target engagement, durable signaling on both the ERK and AKT pathways. Proliferation and expansion of tissue resided macrophages with minimal off target effects of monocyte infiltration or production of monocyte derived macrophages.

Moreover, tissue macrophages induced the expression of inflammation resolution and tissue repair markers including increased IL-4 receptor alpha IL-10 receptor alpha cell surface expression [iery tosis receptor MTE KP] regulation and metalloprotease activation.

Nektar-422 monotherapy showed efficacy in the mouse. [The SSS] colitis model and combination treatment of Nektar-422. With the Tanner greatly increased the efficacy of TNF alpha blockade on arthritic Pass welling after starting treatment at the peak of inflammation in a rat collagen induced arthritis model.

As Howard mentioned data from our early research of this program has been selected for an oral presentation at this year's ACR Convergence Conference. This program has applications in a number of therapeutic indications that span acute and chronic inflammatory diseases. And we're excited to be presenting this first pre-clinical data next week.

And with that, I'll hand the call over to Mary to discuss Nektar-255. Mary,

Thank you, JZ. Now turning to our IL-15 based oncology program. Since October, we have three new data disclosures for Nektar-255, all of the publications and presentations can be found on Nektar's website. First, the journal blood recently published data from Stanford study evaluating Nektar-255 in combination with their proprietary CD 1922 car T cell for B cell, acute lymphoblastic leukemia.

The results show Nektar-255 added to Stanford's proprietary car T cell therapy increased the 12-month relapse free survival rate from 38% to 67% when compared to Stanford's historical controls. Also of note, Nektar-255 enhanced lymphocyte trafficking to disease tissue which further supports the mechanism of action.

Second, the abstract for ash poster presentation was made public this week at the annual conference in December. We will present final data for the 15 patients in our Phase 2 Placebo controlled trial, evaluating Nektar-255 after approved CD-19 car T cell therapies for large B cell lymphoma, we're encouraged by the six month complete response rate data from this trial which align with the findings from the Stanford trial and further confirm Nektar-250 five's ability to enhance car T cell efficacy.

Third, data presented today at [CSY] strengthen our belief in Nektar-255 therapeutic potential in a new application as a combination treatment with checkpoint inhibitors for some background radiation induced lymphopenia is a common occurrence after chemo radiation and is associated with a worse overall survival in multiple solid tumors including lung cancer.

The presence of severe lymphopenia at the initiation of consolidative der volumed therapy. After definitive chemo radiation for unresectable locally advanced non-small cell lung cancer was found to be an independent predictor of shorter progression free survival and overall survival.

Dr, Steven Lin presented interim data from a Phase 2 study evaluating Nektar-255 to restore lymphocyte counts after chemo radiation for patients with locally advanced non-small cell lung cancer.

In comparison to MD Anderson's historical control data, Nektar-255 in combination with [diol AAB] demonstrated a statistically significant improvement in the eight-week absolute lymphocyte count. These interim data presented as a late breaking abstract at sits today suggests that Nektar-255 has the potential to confer clinical benefits in patients with locally advanced non-small cell lung cancer.

Now, looking ahead, we're continuing our Phase 1 trial with Abel Zeta to assess Nektar-255 with their tills for advanced non-small cell lung cancer patients who do not respond to anti PD-1 therapy.

We're also collaborating with Merck KGaA to evaluate Nektar-255 in combination with [vici] for bladder cancer with the first potential PFS readout expected either by the end of this year or in the first part of next year. As this is an event driven analysis.

All in all, the growing body of evidence highlights the broad applicability of our IL-15. As new data emerge, we continue to explore partnering options to continue the Nektar-255 development program.

And with that, I'll turn it over to Sandra for our financial guidance, Sandra.

Thank you, Mary and good afternoon, everyone. We ended the third quarter with $249 million in cash and investments and with no debt on our balance sheet with the proceeds from the sale of our Huntsville Alabama commercial PEG manufacturing facility for $90 million which includes $70 million in cash and $20 million in equity ownership. Our financial position is further strengthened.

We now expect our cash runway to extend into the fourth quarter of 2026. Taking us through several key data milestones including top line data from both of our Phase 2b Res studies. We now expect to end the year with approximately $265 million in cash and investments.

I'll briefly review our quarterly financials and share updates to our financial guidance for 2024. Our revenue was $24.1 million for the third quarter of 2024. We now expect our revenue for the full year to be between $90million to $95 million, which includes $60million to $65 million in non-cash royalties and $30million to $35 million in product sales. Our product sales generate a negative gross margin.

We expect to recognize a gain upon the close of the sale of the Huntsville manufacturing facility in the fourth quarter of approximately $40million to $45 million. We do not expect to owe any taxes on this game R&D expense for the third quarter of 2024 was $35 million. And we still anticipate full year R&D expense to range between $121million to $130 million with approximately $10 million of non-cash expense.

G&A for the third quarter of 2024 was $19 million. We now expect G&A expense for the full year to be between $75million and $80 million with an increase in the non-cash portion to approximately $12 million from $5million to $10 million.

Lastly, our 2024 noncash interest expense remains unchanged and is expected to be between $20million to $25 million. Our net loss for the third quarter of 2024 was $37 million or $0.18 basic and diluted loss per share.

And as I mentioned earlier, we plan to end 2024 with approximately $265 million in cash and investments and a runway that extends into the fourth quarter of 2026.

And with that, we'll now open the call for questions. Crystal.

Thank you. (Operator Instructions).

Our first question will come from Yasmine Rahimi from Piper Sandler. Your line is open and.

Good afternoon team. Thank you so much for all the wonderful updates across the entire pipeline. Really informative, I guess one question. I think a lot of investors are eagerly waiting, the AD and AAV read out and it was really appreciated. The color you gave that enrollment is progressing really well and on track for delivering both data readouts.

But could your kind of is there an opportunity to quantify, like where, how close we're getting to bringing both of the studies to finish line? Do you see, I think that could be really helpful. And then two, I think the second question that's most and most often asked is the ability to on a positive data, especially from the ad study, how to extrapolate efficacy and biologically experienced patients. And I apologize for asking two questions. I'll jump back in the queue.

Mary. You want to take that question?

Yeah, sure. Thanks, Jasmine, for the question. So, starting with the first one.

Can we provide more color on enrollment? I can just say, we started this trial last October in 2023 and we have advised that we will have our top line data in the first half of 2025. What we will commit to doing is on clinical trials.gov.

When we've completed enrollment, we will change the status on clinical trials.gov. So people can continue to monitor the progress of our trial there in terms of efficacy, our clinical trial in the Phase 1 study was in biologic naive patients. And we made the decision to also advance REZPEG into a Phase 2b in biologically naive patients.

And so, we will be able to have a read through of our data from the Phase 1. I think today it's not well understood what the efficacy will be with biologics and biologically experienced patients. And as we see more data with the oxford studies and other compounds, we'll have a better sense of what is the response rate in that patient population? I think today it's too early to say.

Thank you.

Thank you. Yes.

Thank you.

Our next question will come from Julian Harrison from BTIG. Your line is open.

Hi. Thank you for taking my questions and congratulations on all the recent progress. First, I'm wondering if you have a good sense for when damages could be publicly specified in your ongoing litigation against Eli Lilly.

Yeah, look, obviously, we really can't comment on an ongoing lawsuit. I can tell you that we're in the process of mediation. We're talking with each other about how to resolve this and we're, Nektar is fully committed to following through and we believe we have a very strong case and clearly there were a number of mistakes made during that clinical trial process.

So, I can't comment on when we'll have a damages number and, when we'll get this resolved, I can tell you that we're actively pursuing it, but of course, it's an active lawsuit and consequently, I really can't get into a lot of discussion on it.

Got it understood. And one more, if I may, just on your Phase 2b atopic dermatitis trial, can you remind us of the protocol pertaining to topical steroid use?

Is Yes. So, this is not a combination trial. So, patients have to wash out of the use of topical corticosteroids before they enroll into the study. And then, they're, they're not permitted to use topical corticosteroids. And if they do after the first two weeks of treatment, then that would be the use of rescue medication and those patients would discontinue treatment.

Got it. So all rescu are considered study discontinuations.

That that's correct. Now, one aspect of our trial that I think incentivize patients to stay on the trial and adhere to the rules for no use of topical corticosteroids is after the 16-week induction period. If patients have adhered to the protocol, they have the possibility to randomize and maintenance period and of course, if they are not responders, then they will go to an escape alarm and receive the highest dose of Res so particularly for patients where there's not great access to biologics in Europe where we're going to enroll, roughly 65% of the patients. I think we'll see strong adherence to the protocol.

Okay. Great, very. Helpful. Thank you.

Thank you.

Our next question will come from Jay Olson from Opco. Your line is open.

Oh, hey, this is John on the line for Jay. Thanks for taking the question and congrats on progress just on the red pack 80 trial. Since you've been enrolling patient for some time. Now, I'm wondering if you can provide some color on the patient baseline characteristic of seeing, for example, the baseline easy score. And also, if you can share the split between patients who enrolled from US sites versus X US sites, that'd be super helpful. Thank you.

Yeah, hi, this is Mary. this is a fully blinded study and we've really meticulously drafted protocols and plans to make sure that we capture data and do so accurately and timely and that we clean our data and that,we maintain a blind of the study. We, I personally have not been looking at those aggregated data in a blinded fashion. And we promise that we will provide you with very clear baseline characteristic traits as well as very clear top line data for three different doses compared to Placebo.

Got it. Thank you.

Thank you.

And our next question will come from Jessica Fye from J P Morgan. Your line is open.

Hey guys, good. Afternoon. Thanks for taking my questions, I guess first one, this data at [EADB] on serum proteo file markers. In ad I believe it was noted that REZPEG reduced expression of serum proteins known to be elevated in AD and I was curious if those expression levels stay reduced. Even after REZPEG therapy was stopped.

Kind of trying to get the phenomenon you saw where patients experience sustained benefit even after stopping re peg in the Phase 2b.

Hey, Jeff, this is JZ. It's a, it's a great question. Unfortunately, though the last time point that was collected in that study was week 12 at the end of induction. So, we don't have proteomic results beyond into the drug free follow up.

However, in the Phase 2, we are collecting samples all through the maintenance period. And also, after the one year of treatment in the one year follow up. So, we'll be able to answer your question very directly in that study, but not in the Phase 1b where collection stops at week 12.

Okay. And.Then for me, if I just didn't, but on the al PIA timing shift from, I think it used to be first half, then mid 25. Now, back half 25. Is that like a delay of getting sites up and running? Is it screen failure or something? What's kind of behind that timing shift?

Yeah. So that study began in.

Right. Yeah. Hi. Yeah, this is Mary Tyt Fair. So, as the trial, for atopic dermatitis began in October of 2023 and then it was about five months later that we began the Alopecia areata study and those patients are followed for 36 weeks of treatment.

And so, I don't think we're necessarily far off from our predictions. I think we're very close to what we predicted. When we started the study, we are enrolling in Canada, the United States and in Europe, it is true that in any trial these days that you're going to run in immunology and with the globalization process in Europe.

It does take longer to bring the European sites on than it is in US. So, you certainly start your enrollment earlier in the United States and Canada, but we are on our projected timelines, and we'll have the data in the second half of 2025.

Thanks.

Thank you. And our next question will come from Andrew Siepker from William Blair. Your line is open.

Hey, thanks for taking our questions. Just a question on the city poster that's presented today. One is, you looked at the NK cell operations. I'm just wondering if there are any other relevant, cell populations that you looked at that's part one.

Part two is really on the control arm. I think Mary, you said that they basically took patients from MD Anderson, in the same, basically the same institution. I'm curious if the limit count pattern is similar to some of the Pacific studies that have been done with AstraZeneca.

I'm just curious about the consistency of that trend on the control arm. Thank you.

Sure. Hi, Andy. It's Mary. So in terms of the historical control arms, these are all patients that were treated at MD Anderson, there were 39 of them that anid the approval of [divol amab]. So, they were only treated with chemo radiation. And then there were 120 patients that were treated with CRT plus DERVA.

And the ALC counts in these patient populations are relatively analogous. And what they want Doctor Lynn showed today was if you look at cycle one day eight, the median increase in ALC was 2.35-fold higher and at cycle two day eight, it was 3.6-fold higher.

And these were statistically significant against his controls. And what he is astounded by is the persistence of the lymphopenia that he's seen in these patient populations. And that, it's remarkable that this effect persists for 12 months after completing radiation therapy.

I don't know. Andy if the literature, but Steven Lynn did put in the background information, his data from the study that he did with, again an analogous patient population. And there's been a second study that was completed at Johns Hopkins and it's an author by the name of [Fre.]

And what he showed was he used a slightly different absolute lymphocyte count than Steven Lynn used 0.23 times [10 to the ninth] liters for lymphocytes. And at the Johns Hopkins Center, they use 0.5 and they showed that the median PFS for those patients with severe lymphopenia was on and this is on the Pacific regimen on [divol AMAB] was only 217 days, which is, about seven months versus 570 days for those patients that didn't have severe lymphopenia.

And when you look at what the median PFS was in the Pacific trial for patients on Placebo, it was 5.6 months. And so, what Steven Lynn's point is when you look at these data, it's astonishing that patients with severe radiation induced lymphopenia at various thresholds really don't do well and seem to have very little benefit from divol IAB.

And so, he has a strong belief that combining Nektar-255 with divol in this setting, would be a very powerful mechanism to, to improve the PFS and overall survival of these patients who aren't deriving benefits today of a checkpoint inhibitor.

And Andy, I can answer your first question. So, what was shown today were NK cell effects and both proliferative effects as well as modification of cell surface proteins associated with activity on the NK cells and some of those phenotypic functions that was shown that's the target one of the targets of the drug.

But in the study, there's quite a bit more phenotypic analysis as well as assessing T cell populations and then assessing the overall proportion of the cells in the patients that recovered from limpo, looking at the memory cell pools and also just looking at the overall health.

One of the underlying hypotheses as Mary was also mentioning is, the cells themselves. because in the patients that have lymphopenia, they're missing lymphocytes are probably also missing, lymphocytes that target the tumor. So also looking at the recovery of specific populations as well. Those are all key objectives that are coming in the study.

Thank you.

(Operator Instructions). Our next question will come from Arthur. He with HCW. Your line is now open.

Hey, good afternoon. I just have a quick, quick question regarding the a study design. So after the 36 week maintenance period, does do the patient have the opportunity to receive the treatment continuously during the follow up?

Hi. Yeah, this is Mary. I'm sorry, go ahead.

Yeah, I was just going to say Arthur that now in this study. So after the 52 weeks of total treatment, which is both the 16 week induction, as well as the maintenance period, then the patients will be followed for 52 weeks with no further treatment. So our one of our objectives here is treat for a year and then assess the remit of effect after one year of treatment.

I see. So which means we can get the data regarding how the off treatment control this control from this study.

Yeah. So, for example, like as as the program continues and say moves into later stage studies like Phase 3, eventually this Phase 2 study will have data from both the one-year treatment as well as the one year off treatment follow up.

That's exactly right. Okay. Got you. Thanks. Thanks for the call.

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

Well, thank you everyone for joining us today and we remain focused on advancing our I&I pipeline and our, we're very excited about the potential for each of our unique programs. I want to thank all of our employees for their hard work and diligence and I want to thank our investors for their continued support and we look forward to providing you with updates on our progress. So stay tuned. Thank you very much.

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