Nektar Therapeutics Q3 FY2025 earnings call

Key Points

• Howard Robin welcomed Dr. Mary Tagliaferri back as Chief Medical Officer and highlighted focus on regulatory T cell science, preparing REZPEG for Phase III in atopic dermatitis, and upcoming results from RESOLVE-AA study in alopecia areata. Also mentioned TrialNet's Phase II study in type 1 diabetes and pipeline antibody NKTR-0165.
• Jonathan Zalevsky discussed REZPEG's Phase IIb studies in atopic dermatitis, including RESOLVE-AD data on EASI scores, asthma comorbidity analysis, and alopecia areata's RESOLVE-AA study details, including SALT score endpoints and comparison to JAK inhibitors. Also noted type 1 diabetes study and pipeline antibody NKTR-0165.
• Sandra Gardiner reviewed quarterly financials, including cash balance, R&D, G&A expenses, and updated cash runway guidance extending into Q2 2027.

No specific product segment financial performance data on absolute terms and revenue contribution % provided in the transcript.

Guidance Points

• Expected year-end cash balance is approximately $240 million, extending cash runway into Q2 2027.
• Full year R&D expense expected to range between $125 million and $130 million, including noncash depreciation and stock-based compensation.
• G&A expense for full year 2025 expected to be between $70 million and $75 million, including noncash depreciation and stock-based compensation.
• Noncash interest expense for full year expected to total approximately $20 million, and noncash loss from equity method investment expected to be approximately $10 million.

Risks

• Forward-looking statements are subject to uncertainties and risks difficult to predict, as detailed in the latest Form 10-Q available at sec.gov. No specific operational failures discussed in detail in the provided transcript.

Q: Congrats on a great quarter. Could you help us understand what you hope to report at ACAAI in patients with AD and asthma, and how this data might impact development in asthma?

A: Howard Robin noted they're not pursuing an asthma indication but the data on comorbidity is important. Jonathan Zalevsky explained they're presenting a preplanned exploratory analysis using ACQ-5 to assess asthma control in patients with both atopic dermatitis and asthma, evaluating improvement in ACQ-5 scores and effect on severe asthma.

Q: Congrats on all the recent progress. I'm wondering if you have a good sense now for the level of interest for a therapy that potentially has a truly remittive effect, and to what extent that could emerge as a differentiator for REZPEG in atopic derm? And switching to alopecia areata, do you see an opportunity for use if efficacy is even lower than low-dose Olumiant given REZPEG's safety?

A: Howard Robin said the Treg mechanism has received attention, and there's a lot of inbound interest in REZPEG. Jonathan Zalevsky stated REZPEG has potential as a differentiated mechanism in alopecia areata due to its safety profile, and there's opportunity even if efficacy is lower than low-dose Olumiant given the lack of black box warnings in REZPEG.

Q: Maybe speaking to the AA, I'm just wondering how fast you can maybe start the Phase III program? And are you planning to move the program by yourself or in a partnership if the December data is positive? And separately, in the Phase IIb AD study, are there any patients have alopecia areata comorbidities?

A: Howard Robin said depending on December data, they'd start Phase III next year. Jonathan Zalevsky mentioned in the Phase IIb AD study, asthma was the largest comorbidity population, with few patients having alopecia areata comorbidities.

Q: In addition to low-dose Olumiant, are there any therapeutics that are in development, biologics for alopecia that you think would be an appropriate benchmark? And are there any IL-2 specific studies that you think could provide read-through to REZPEG in alopecia?

A: Jonathan Zalevsky said there are biologics in development for alopecia, but REZPEG's study is larger. He also stated low-dose IL-2 isn't a good proxy for REZPEG as REZPEG achieves higher Treg levels and longer duration.

Q: On the alopecia top line data analysis, would you have any off-treatment responder rate you plan to report on given some patients may have been past that 36-week treatment period? And on the auto-injector development, how far along are you?

A: Jonathan Zalevsky said the 36-week induction period data will be presented, and the study is ongoing with off-drug observation. Auto-injector development is ongoing, with goal to have it available at REZPEG launch.

Q: Given that you've passed in the data there, how should we think about the primary endpoint for the approval there in the future? Do you think the SALT 20 is still could do the job?

A: Jonathan Zalevsky said health authorities set registrational endpoints (SALT 20 in US, SALT 10 in Europe), but studies measure multiple secondaries, leaving it to regulators.

Q: Sorry, I apologize if the question has been asked before. So given the readout coming readout for the alopecia, what's your current manufacturing footprint?

A: Howard Robin said they sold PEGylation facility to Gannet BioChem but have guaranteed raw material source and work with contract manufacturing companies. Mary Tagliaferri added they implemented procedures to minimize placebo effect in RESOLVE-AD and will apply same in Phase III.