Nektar Therapeutics

Ladies and gentlemen, thank you for standing by, and welcome to the Nectar Therapeutics fourth quarter 2020 financial results. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and then one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star and then zero. I would now like to hand the conference over to your speaker today, Ms. Jennifer Ruddock, Head of Corporate Affairs. Ma'am, you may begin.

Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. With us on the call are Howard Robin, our President and CEO, Gil Labrucherie, our COO and CFO, Dr. Jonathan Zalevsky, our Chief of Research and Development, and Dr. Brian Cotson, our Interim Chief Medical Officer and Head of Development. On today's call, we expect to make forward-looking statements regarding our business. including clinical trial enrollment and clinical trial results, timing and plans for future clinical trials, timing and plans for future clinical data presentations, the therapeutic potential of our drug candidates, outcomes and plans for health authority regulatory actions and decisions, estimates and predictions of the COVID-19 pandemic's impact on our business and clinical trials, financial guidance, 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 10Q that was filed on November 6, 2020, 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 of NECTR's website at NECTR.com. Before turning the call over to Howard, I'd like to remind you that I will moderate the Q&A session for our team as we're all in different locations, so we can avoid technical issues during the session. We appreciate your patience as we work to ensure there are no technology disruptions for those listening on the call today. With that said, I will hand the call over to our President and CEO, Howard Robin. Howard?

Thank you, Jennifer. Thanks to everyone for joining us on the call today. Over the past year, NICR has made excellent progress positioning our company as a leader in the development of cytokine therapeutics. Importantly, we successfully broadened the registrational program in solid tumors for our lead IL-2 program, BEMPEG, with the addition of multiple registrational trials in adjuvant melanoma, muscle invasive bladder cancer, and most recently, head and neck cancer. We also successfully completed enrollment in the ongoing Nectar-sponsored registrational studies in renal cell carcinoma and bladder cancer, overcoming the challenges presented by the pandemic over the past year. We initiated a new development strategy with our IL-15 program, advancing two separate Phase I-II clinical studies to combine Nectar-255 with leading ADCC compounds, rituximab and daratumumab, in liquid tumors, and cetuximab in solid tumors. And for Nectar 358, our Treg stimulator, we and our partner, Eli Lilly, broadened the clinical program with four mid-stage studies in different autoimmune disorders, including a Phase II in lupus, a Phase II study in ulcerative colitis, and two Phase Ib studies, one in psoriasis and the second in ectopic dermatitis. We've also bolstered our already strong financial position with a $150 million royalty financing in December and a novel $150 million risk sharing collaboration, which we just completed with Blackstone Life Sciences and Abingworth through their SFJ entity to fully fund a study for BEMPEG plus PEMBRO in head and neck cancer. And we're working with Merck on this study. our deep pipeline of candidates in immune oncology and immunology together with a strong cash balance position Nectar well as we enter 2021. So let me begin today with BEMPEG, our most advanced late stage clinical program and IL-2 pathway agonist that is being developed in combination with checkpoint inhibitors nivolumab and pembrolizumab. A strategy for BEMPEG is focused on pursuing multiple large frontline and adjuvant tumor settings, melanoma, renal cell carcinoma, bladder cancer, non-small cell lung cancer, and head and neck cancer. The opportunity for combining BEMPEG with PD-1 inhibitors in these tumor settings is significant. The 2020 sales of PD-1s across these settings were greater than $5 billion, and we were exceptionally proud that we put in place a development program that positions us to capture significant value with BEMPEG. Over the past year, we and BMS initiated two new registrational studies for BEMPEG plus nivolumab, both of which target large patient populations. The first in adjuvant melanoma that Nectar is sponsoring, and the second in muscle-invasive bladder cancer that BMS is sponsoring. In addition, BMS also initiated a phase two study in renal cell carcinoma for BEMPEG plus NEVO with a TKI to pave the way for future development of a TKI-inclusive regimen in the setting in first-line RCC. The study is designed to build on their recent successful approval of NEVO plus CAVO, and we're excited about moving forward in that study. Separately, Nectar also advanced our own phase two study known as PROPEL in patients with non-small cell lung cancer studying BEMPEG plus PEMBRO. And just last week, we announced two separate collaborations that are designed to fund and advance a new registrational study for BEMPEG plus PEMBRO and first-line head and neck cancer. I'll briefly comment on these recent collaborations. First, we entered into a clinical trial collaboration and drug supply agreement with Merck for a Phase 2-3 study of BEMPEG plus PEMBRO versus PEMBRO monotherapy in patients with metastatic head and neck cancer whose tumors express PD-L1. This study is designed to allow us to pursue global registration of BEMPEG in this indication, and we are very grateful to collaborate with Merck for the first time on BEMPEG. Merck will provide PEMBRO at no cost for this 500-patient study, and they are also collaborating with us on the protocol and study designs. Hembrough has emerged as the leading checkpoint inhibitor and standard of care in this setting, overtaking the extreme regimen in its usage in first-line care. And we are excited about the potential of BEMPEG to help these patients. Jay Z will talk more about this study and the rationale for an IL-2 agent in this indication. Second, to fund this study in a non-dilutive fashion, we entered into a very innovative agreement with SFJ, and entity backed by Blackstone Life Sciences and Abingworth with a commitment from them for $150 million. We're pleased that SFJ and its investors showed their conviction in BEMPEG by committing this capital entirely at risk. This underscores their beliefs that BEMPEG has the potential to be approved in multiple tumor settings. In exchange, following BEMPEG's approval, we have a series of success-based milestone payments that will be made over approximately seven years. Importantly, again, these payments are made only if BEMPEG secures FDA approval, and these payments do not start until after the completion of the head and neck study, which is currently projected for 2024, with our projection for a potential first payment of $30 million in 2025. We estimate that this new opportunity in head and neck cancer could be as large as $500 to $800 million globally each year, and so it represents a substantial value addition to the BEMPEG development program. From the onset, we had envisioned BEMPEG to be developed with other checkpoint inhibitors beyond nivolumab. Our original agreement with BMS provided us with the ability to conduct independent studies outside of the indications being pursued by the Nectar BMS Joint Development Plan underway with NEVO. For PEMBRO, the two largest metastatic settings with monotherapy labels are non-small cell lung cancer and head and neck cancer. With this new head and neck study, we now have a strategy to address both of these tumor types, and to do so, we are combining with the clear market leader in these settings. To remind you, in the agreement with BMS, We have a $1.43 billion payment in filing and approval milestones for BEMPEG in the U.S., Europe, and Japan, and these are tied to any approval of BEMPEG, whether the approval is with NEVO or not. We're eligible to receive $625 million for filings and approvals in the first indication and $260 million for each of the next three indications. Again, regardless of whether the filing and approval is in combination with NEVO or PEMBRO. With six registrational studies to support potential filings, we have many opportunities to bring in these milestones. At CITSE, this past November, we reported new data for the patients in our metastatic melanoma cohort from PIVIT-02. These data illustrated the ability of PEMPEG to help melanoma patients achieve a high reduction in tumor burden and demonstrated the continued benefit of the doublet treatment over time. 90% of patients who responded experienced a 100% reduction in target lesions or a complete response to the investigational doublet treatment. And we know in this setting that depth of response can translate into improved PFS and OS. The median PFS reported for the BEMPEG plus NEVO cohort is 30.9 months, which compares very favorably to the historical PFS of 6.9 months for NEVO alone from the Checkmate 067 study. As a reminder, NEVO monotherapy is the comparator arm in our ongoing phase three study in these patients, so the data presented at CITSE provides us with an even more confidence in BEMPEG's therapeutic potential. For the first time, we also reported a landmark overall survival figure for BEMPEG plus NEVO at two years of 77%, and the median overall survival has not yet been reached. The results compare favorably to OS data for NEVO alone as well, which recorded landmark OS of 59% at two years. We also recently reported very good enrollment progress with the NECTAR-sponsored PROPEL study, which is evaluating BEMPEG plus PEMBRO in patients with first-line non-small-cell lung cancer. This study will provide us with key data in order to develop a Phase III strategy in this setting with PEMBRO. As we mentioned at the J.P. Morgan Conference, enrollment in this trial came in well ahead of schedule, with a high number of patients enrolled in November and December of last year. We plan to report the initial data from this study in the second half of this year, This will be data in approximately 60 patients spread across three separate PD-L1 expression cohorts. And I'll let Jay Z share more on Propel in a moment, and he will also provide an update on our work with BEMPEG in the COVID-19 study. Turning to Nectar 255, our second major IO cytokine program with a broad-based mechanism that causes the proliferation of natural killer cells and the expansion of CD8 T cells and memory cells. By combining Nectar 255 with the leading approved ADCC antibodies, which require functional natural killer cells for their mechanism of action, we believe that we can improve the therapeutic potential of these targeted antibody therapies for patients. We reported very encouraging early clinical data at this past CITSE conference in patients with multiple myeloma and non-Hodgkin's lymphoma, would show that Nectar-255 is increasing NK cells in these patients, and we demonstrated the clinical benefit of Nectar-255 as a single agent in these early dose cohorts. In addition to the ongoing trial in hematological malignancies, we are also enrolling patients in our Phase I solid tumor study. We expect to have additional data from these studies in the second half of this year. The third cytokine in our portfolio is Nectar-358, which is being developed in partnership with Eli Lilly to address a broad range of autoimmune and inflammatory conditions, all of which represent significant patient populations. We're truly excited about Lilly's commitment to this program, and Brian will share more of this program later in the call. Following the positive data for Nectar-358 in lupus patients last year, Lilly commenced a 280-patient Phase II study in lupus and is now also initiating a 200-patient Phase II study in ulcerative colitis. And these add to the ongoing separate Phase Ib studies in psoriasis and ectopic dermatitis. We entered 2021 with an exceptionally strong balance sheet with $1.2 billion in cash and no debt. And I'll now turn the call over to Jay Z, who will expand on our BEMPEG Nectar 262 and Nectar 255 programs. Jay Z.