Nektar Therapeutics

Good day, and thank you for standing by. Welcome to the Nectar Therapeutics third quarter 2024 financial results conference call. At this time, all participants are in 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. 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 Zalewski, our Chief Research and Development Officer, Dr. Mary Tagliaferri, our Chief Medical Officer, and Sandra Gardner, our Chief Financial Officer. On today's call, we expect to make forward-looking statements regarding your business, including statements regarding the therapeutic potential 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're 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 on the IR page of Nectar's website at Nectar.com. With that said, I would like to hand the call over to our President and 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 two studies for our lead aspect a lead asset, ResPeg-Aldis Lupin, also known as ResPeg, which is designed to directly expand functional Treg cells and engage multiple immunoregulatory pathways in patients with autoimmune disorders. As you know, ResPeg has 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 ectopic 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 ResPeg's potential as a first-in-class T-regulatory cell mechanism for these patients with critical unmet needs. Enrollment in our Phase II study in ectopic 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 IIb study, and Jay-Z will share more on the ongoing study in a moment. We believe there's also significant potential for RESPEC 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 JAK 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 IIb study of RESPEG 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 RESPEG in ectopic dermatitis and psoriasis. These data, taken in aggregate, bolster our decision to proceed with the clinical plan and advance our two Phase 2b studies in ectopic dermatitis and alopecia areata. And Jay Z will talk more about the important data from these publications later on in the call. Turning to our preclinical programs, we continue to advance NECTAR-165, our novel TNFR2 agonist antibody program. Given the importance of TNF receptor 2, NECTAR-165 could potentially become a first-in-class treatment for autoimmune diseases such as multiple sclerosis, ulcerative colitis, and vitiligo. Earlier this year at ULAR, we presented the first preclinical data for this program showing that NECTAR-165 demonstrated selective enhancement of Treg cell function, and Jay-Z will discuss more about that later. We're currently conducting IND-enabling studies with the goal of preparing for an IND submission in the second half of 2025. Now, leveraging our learnings from NECTAR-165, we've also designed a pipeline of TNFR2-containing bispecific molecules that pair TNFR2 agonism with other antibody targets. And we look forward to providing more color on this pipeline as development candidates emerge. In addition to Nectar 165, we also have our PEGS CFS-1 program, Nectar 422. In preclinical stage, that was engineered to selectively modulate resolution processes of inflammation. We're excited to announce that preclinical data spanning multiple animal models, including collagen-induced arthritis, were selected for an oral presentation at the upcoming 2024 ACR Convergence Meeting in Washington, D.C. This will be our first presentation of preclinical data from this program, and Nectar 422 has the potential applications in a number of therapeutic indications, including acute and chronic inflammation. Next, I'd like to discuss Nectar 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 Nectar-255 can enhance the activity of CAR-T therapies. Today, we presented a late-breaking abstract at CITSE, demonstrating the use of Nectar-255 in a new application. In that abstract, Nectar-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 Jay Z, 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 peglation reagent manufacturing facility in Huntsville to ampersand capital partners. The peg reagent facility will be spun out as a standalone ampersand portfolio company. Nectar 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 2nd. In addition to serving the plant's existing customers, the new company will continue to serve Nectar's PEG supply needs for ResPEG and our other PEG-related programs in our pipeline. We will retain all rights to royalties and milestones under existing PEG license agreements, including those related to DAPI PEG-ALL, which has already demonstrated positive Phase III efficacy in lupus. This strategic divestiture of the plant allows us to streamline our operations and further bolsters Nectar'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 Jay-Z for an R&D discussion. Jay-Z?

Thank you, Howard. Starting with RESPEC, this program is the most advanced IL-2 Treg mechanism in the field. We believe there are major opportunities in both atopic dermatitis and alopecia areata that RESPEC could potentially address. Our Phase 1b RESPEC data in atopic dermatitis demonstrated dose-dependent efficacy and encouraging durability, observed long after patients completed the 12-week induction period. In fact, for both patient-reported outcomes and physician-assessed endpoints, 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 or outperformed that of dupilumab 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 RESPEG in atopic dermatitis. As Howard mentioned, last month we published preclinical and clinical RESPEG data in Nature Communications. The manuscript includes results from mouse models and two human Phase Ib studies in atopic dermatitis and psoriasis, all demonstrating the potential of RESPAC for the treatment of inflammatory skin diseases. The clinical results from these two different inflammatory skin conditions showed that RESPAC improved physician-assessed disease activity and patient-reported outcomes. These promising findings clinically validate the Treg hypothesis that causally restoring Treg function through a central pathway of IL-2 receptor-driven Treg rescue can have therapeutic potential across a variety of chronic skin diseases. It also demonstrates that RESPEC 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 study and in line with previously published data. The exciting cross-indication clinical efficacy we observed is buttressed by serum biomarker analysis, demonstrating that ResPak can modulate multiple immunoregulatory 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 Treg-mediated pathways with potential effects on tissue resident memory T cell populations, resulting in sustained efficacy seen in the antigen-challenged mouse model and in the clinical trial. These proteomic findings further validate our therapeutic approach of using a Treg 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 RESPAG 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 ResVag 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 re-randomized 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 remittive effects of RASBET. 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 face-to-face 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. turning to alopecia areana, 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 RESPEC in this indication based on the role of Tregs on the underlying pathology of the disease. The Phase IIb study is well underway and plans to recruit 84 patients with severe to very severe disease that will be randomized to respag 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 NECTAR-0165, are TNFR2 agonist antibodies. TNFR2 is highly expressed on Tregs, myeloid suppressor cells, regulatory B cells, neuronal cells, and others. In Tregs, TNFR2 agonism has been shown to potentiate the effector functions, suppressive functions, and maintenance of Treg 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 FOXP3 loss of function. In contrast, its presence and activation of its signaling has been associated with immunoregulatory function and tissue protection effects. Our TNFR2 agonist program is built upon many years of Treg experience that we've gained from studying RESPEG. RESPEG, as you know, as an IL-2 receptor pathway agonist drives JAK-STAT signaling in Tregs, which is critical to drive Treg proliferation and function in primary and secondary lymphoid organs. TNFR2, on the other hand, is the most abundant TNF superfamily member expressed on Tregs and a key activator of NF-kappa-B, which also controls the FOXP3 protein expression and is critical to maintain Treg function. especially in the non-lymphoid organs. Thus, with the ResPag and TNFR2 agonist programs, Nectar's pipeline provides target rationale for both lymphoid and non-lymphoid Tregs, and this is one of the reasons why we are so excited about Nectar 0165. We presented the first preclinical data for this program at ULAR in June of this year, and there were several key takeaways from that presentation. First, the TNFR2 agonists, we discovered, are able to signal through the TNFR2 multimeric receptor a single-arm monovalent antibody, which is a very novel effect for a TNFR2 agonistic antibody. Second, the clinical candidate, Nectar0165, demonstrated very high specificity for binding and signaling through TNFR2 on Tregs, with little to no binding and signaling in conventional T cells, NK cells, or monocytes. Third, Nectar-0165 is a monotherapy, drove Treg proliferation, upregulation of FOXP3 and other activation markers, primary Tregs. Fourth, the PKPD of Nectar-0165 and efficacy in the KLH-DTH model were confirmed in a human TNFR2 knock-in mouse model. We are very excited with the unique and differentiated profile of the antibodies that were discovered. and we are rapidly advancing Nectar 0165 into the clinic, and we expect to submit an IND 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 TNFR2 agonist antibody specificities we discovered are active in single-arm antibodies, We have leveraged this to design a pipeline of TNFR2 containing bispecific molecules that pair TNFR2 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 provide more color on this pipeline as development candidates emerge for future clinical entry. Overall, we have observed growing interest for a novel and selective TNFR2 agonist like Nectar165. And as we move forward with our IND-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. And we have a second preclinical target in the immunology space, PEG-CSF1 called Nectar 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 Nectar 422 is to stimulate inflammation resolution and tissue repair by targeting the expansion, reprogramming, and activation of anti-inflammatory tissue-resistant macrophages. An agent that possesses such biological properties could create a new class of anti-inflammatory therapeutics, and this is our objective with Nectar 422. To discover Nectar 422, we used in vitro and in vivo screening of CSF1 PEG conjugates to identify a CSF1 receptor agonist with a differentiated PKPD profile compared to the native cytokine. And what we found was in vivo treatment with Nectar 422 shows significantly reduced target mitigated clearance, sustained target engagement, durable signaling on both the ERK and AKT pathways, proliferation and expansion of tissue-resistant macrophages with minimal off-target effect, 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 and IL-10 receptor alpha cell surface expression, iferocytosis receptor mer-TKF regulation, and metalloprotease activation. NECTAR-422 monotherapy showed efficacy in the mouse CSS colitis model, And combination treatment of Nectar 422 with etanercept greatly increased the efficacy of TNF-alpha blockade on arthritic paw swelling 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 preclinical data next week. And with that, I'll hand the call over to Mary to discuss Nectar 255. Mary?

Thank you, Jay-Z. Now, turning to our IL-15-based oncology program, since October, we have three new data disclosures for Nectar 255. All of the publications and presentations can be found on Nectar's website. First, the journal Blood recently published data from Stanford's study evaluating Nectar 255 in combination with their proprietary CD1922 CAR T-cell for B-cell acute lymphoblastic leukemia. The results show Nectar 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, NECTAR255 enhanced lymphocyte trafficking to diseased tissue, which further supports the mechanism of action. Second, the abstract for our 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 II placebo-controlled trial evaluating NECTAR255 after approved CD19 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 NECTAR255's ability to enhance CAR T-cell efficacy. Third, data presented today at CITC, strengthen our belief in Nectar 255's therapeutic potential in a new application as a combination treatment with checkpoint inhibitors. For some background, radiation-induced lymphopenia is a common occurrence after chemoradiation 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 Dervolumab Therapy after definitive chemoradiation 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 his Phase II study evaluating NECTR255 to restore lymphocyte counts after chemoradiation for patients with locally advanced non-small cell lung cancer. In comparison to MD Anderson's historical control data, Nectar 255 in combination with Dervolumab demonstrated a statistically significant improvement in the eight-week absolute lymphocyte count. These interim data, presented as a late-breaking abstract at CITSE today, suggest that Nectar 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 one trial with AbleZeta to assess Nectar255 with their TILs for advanced non-small cell lung cancer patients who do not respond to anti-PD-1 therapy. We're also collaborating with Merck KGA to evaluate Nectar255 in combination with Fevencio 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 NECTAR 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 IIb RESPEG 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 $90 and $95 million, which includes $60 to $65 million in non-cash royalties and $30 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 40 to 45 million. We do not expect to owe any taxes on this gain. R&D expense for the third quarter of 2024 was 35 million, and we still anticipate full year R&D expense to range between 120 and 130 million. with approximately 10 million of non-cash expense. GNA for the third quarter of 2024 was 19 million. We now expect GNA expense for the full year to be between 75 and 80 million with an increase in the non-cash portion to approximately 12 million from 5 to 10 million. Lastly, our 2024 non-cash interest expense remains unchanged and is expected to be between 20 and 25 million. Our net loss for the third quarter of 2024 was 37 million or 18 cents 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. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In the interest of time, we do ask that you please limit yourself to one question at this time. Please stand by. We compile the Q&A roster. And our first question will come from Yasmine Rahimi from Piper Sandler. Your line is open.

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 AA readouts, 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 you kind of Is there an opportunity to quantify 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 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?

Yes, sure. Thanks, Yasmeen, 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 clinicaltrials.gov when we've completed enrollment, we will change the status on clinicaltrials.gov so people can continue to monitor the progress of our trial there. In terms of efficacy, our clinical trial in the phase one study was in biologic naive patients. and we made the decision to also advance RESPEG into a Phase IIb in biologically naive patients, and so we will be able to have a read-through of our data from the Phase I. I think today it's not well understood what the efficacy will be with biologics in biologically experienced patients, and as we see more data, With the OX40 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, you know, Nectar 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 while I can't comment on when, you know, when we'll have a damages number and, you know, 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 IIb atopic dermatitis trial, can you remind us of the protocol pertaining to topical steroid use?

Mary, you want to cover that? 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 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 BRASQs are considered study discontinuations.

That's correct. Now, one aspect of our trial that I think incentivized 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 re-randomized in the maintenance period. And of course, if they are not responders, then they will go to an escape arm and receive the highest dose of RESPEG. 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 on the line for Jay. Thanks for taking the question, and congrats on the progress. Just on the RASPAC-80 trial, since we've been enrolling patients for some time now, I'm wondering if you can provide some color on the patient baseline characteristics we're seeing, for example, the baseline easy score. And also, if you can share the split between patients you enrolled from US sites versus ex-US sites, that would be super helpful. Thank you.

Yeah. Hi. This is Mary. You know, this is a fully blinded study. And, you know, 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. 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 Five from JPMorgan. Your line is open.

Hey, guys. Good afternoon. Thanks for taking my questions. I guess first one, this data at EIDB on serum proteomic biomarkers, I believe it was noted that RESPEG reduced expression of serum proteins known to be elevated in AD. And I was curious if those expression levels stay reduced even after RESPEG therapy was stopped. Just kind of trying to get at the phenomenon you saw where patients experienced sustained benefit even after stopping RESPEG in the Phase 1b. Yeah.

Hey, Jess. This is Jay Z. 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 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, forgive me if I just didn't, but on the alopecia timing shift from, I think it used to be first half, then mid-25, and now back half of 25, is that like a, you know, 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, well,

Mary, you can go ahead. Yeah, this is Mary. So as you know, 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, you know, 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 U.S. 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 Andy Shea from William Blair. Your line is open.

Hey, thanks for taking our questions. Just a question on the SITC poster that's presented today. One is you looked at NK cell proliferation. I'm just wondering if there are any other relevant cell populations that you looked at, 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 in the same institution. I'm curious if the lymphocyte 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 antedated the approval of Dervolumab, so they were only treated with chemoradiation. And then there were 120 patients that were treated with CRT plus DERVA. And the ALC counts in these patient populations are relatively analogous. What Dr. Lin 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 you know the literature, but Steven Lin 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 Friedes. And what he showed was he used a slightly different absolute lymphocyte count than Stephen Lin. Stephen Lin used 0.23 times 10 to the ninth liters for lymphocytes. And at the Johns Hopkins Center, they used 0.5. And they showed that the median PFS for those patients with severe lymphopenia, and this is on the Pacific regimen, on drivolumab, 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 Lin's point is, 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, very little benefit from drivolumab. And so he has a strong belief that combining Nectar 255 with drivolumab in this setting would be a very powerful mechanism to improve the PFS and overall survival of these patients who aren't deriving benefit today of a checkpoint inhibitor.

And Andy, I can answer your first question. So what was shown today were NK cell effects, both proliferative effects as well as modification of cell surface proteins associated with activity on the NK cells and some of the phenotypic functions. That was shown, that's 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 lipopenia, looking at the memory cell pool, 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 lipopenia, They're missing lymphocytes. They're probably also missing, you know, 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. And as a reminder, to ask a question, please press star 1-1. And our next question. We'll come from Arthur He with HCW. Your line is now open.

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

Hi, yeah, this is Mary.

I'm sorry.

Go ahead, Jeezy.

Yeah, I was just going to say, Arthur, that 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 one of our objectives here is treat for a year and then assess the remittance effect after one year treatment.

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

Yeah. So, for example, like as the program continues and, you know, say moves into later stage studies like phase three, you know, eventually this phase two 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. Gotcha. 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 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.