Nektar Therapeutics (NASDAQ:NKTR) Q1 2023 Earnings Call Transcript

Jonathan Zalevsky: Yes. Thanks Daina for the question. We have seen with even low-dose IL-2, and I know you are familiar with the literature, that across different disease indications, low-dose IL-2 has a different kind of performance. And there is different kinds of sensitivity of the underlying immune dysfunction and how low-dose IL-2 works. One of the things that we learned from the study in lupus patients, right, is that the high dose, which we have studied before in multiple settings, from healthy volunteers to patients with mild lupus to patients with psoriasis to patients with atopic dermatitis and patients with ulcerative colitis, we really didn’t see systemic toxicities and issues with that dose level in those other patient populations.

But in the moderate to severe lupus patients, we found more intolerability in that setting. So, one of the hypotheses that we have is really related to the nature of the disease. In the lupus patients, you have much more of a systemic Th1 disease, whereas in atopic dermatitis, it’s different. It’s a Th2 kind of disease. So, even though the same dose level was studied in both patient populations, we definitely saw very different profiles, both in terms of efficacy at that dose level as well as tolerability. One of the things that gives us comfort moving forward in the atopic dermatitis Phase 2b study is that we have already studied that same dose level at 24 micrograms per kilogram in the Phase 1b, which is essentially analogous to the 1,800-microgram flat dose.

We have already studied that dose level in the Phase 1b study. And looking at the efficacy profile, relative to the tolerability profile, it looks like a very reasonable and encouraging, if not positive, kind of a risk benefit profile from that small study. So, we are comfortable continuing using that dose level in patients with atopic dermatitis. And so it’s really a patient population and disease indication difference. It’s really not uncommon for many, many drugs.

Daina Graybosch: Alright. Thank you.

Operator: Thank you. And our next question will come from Boris Peaker from TD Cowen. Your line is open.

Unidentified Analyst: Hi. This is Hans for Boris Peaker. Thanks for taking our questions. I have one for REZPEG. So, when you decided to return the asset, just wonder if you could give a little color for the reasons behind. And also you had some feedback, positive feedback from the key opinion leaders? And what does that make you feel confident can move forward with this action?

Howard Robin: Okay. Good. Certainly a good question and pretty reasonable. Look, Lilly has other priorities in atopic dermatitis. And when we took the REZPEG data in both lupus and in atopic dermatitis to the various key opinion leaders, every key opinion leader that reviewed the data believe that REZPEG is a promising therapeutic and needs to be advanced in the clinic to help patients. So, I think we were very comfortable when we went to some of the true thought leaders in atopic dermatitis and the true thought leaders in lupus and had them look at the data. They were very impressed with it, actually. I think Lilly, we were very excited to get REZPEG back from Lilly. I think they made a business decision that doesn’t reflect the inherent value of REZPEG.

Instead, it really reflects their strategic direction where REZPEG would have been a potential competitor to their anticipated and soon likely to be approved other therapy in atopic dermatitis, so I think there is lots of reasons for them giving it back to us. But I wouldn’t say lack of efficacy for the drug is one of them. I hope that answers your question.

Unidentified Analyst: Thank you. That’s very helpful. My second question is just a general question. As your company now shifting to immunology folks to biotech, so what have you done in terms of your organization that you, expertise-wise, what have you done to make it possible or a successful transition?