Nektar at H.C. Wainwright: Respag’s Promising Future

On Tuesday, 20 May 2025, Nektar Therapeutics (NASDAQ:NKTR) presented at the H.C. Wainwright 3rd Annual BioConnect Investor Conference 2025. The company shared a strategic overview of its drug, Respag, highlighting its potential in treating autoimmune diseases. While optimistic about Respag’s future, Nektar also addressed past challenges, including a data correction issue.

Key Takeaways

• Nektar regained full ownership of Respag after ending its collaboration with Eli Lilly.
• Corrected data from a phase one b study improved Respag’s efficacy profile.
• Phase two b trials for atopic dermatitis (AD) and alopecia are underway, with results expected in June and December, respectively.
• Collaboration with TrialNet aims to explore Respag’s potential in preventing type one diabetes (T1D).
• Nektar has a cash runway until the fourth quarter of 2026.

Respag’s Development and Collaboration History

• Respag is based on the IL-2 protein sequence, enhanced with polymer chemistry to target regulatory T cells (Tregs).
• Nektar initially partnered with Eli Lilly in 2017, conducting nine clinical studies.
• The collaboration ended in April 2023, making Respag a wholly-owned asset of Nektar.

Phase One b Data Correction

• An error in the EASI score calculation was discovered post-collaboration.
• Correcting this error showed a more significant drug effect, published in Nature Communications.
• The error was attributed to a third-party CRO under Eli Lilly’s supervision.

Atopic Dermatitis (AD) Phase Two b Study

• The study enrolled 400 patients with moderate to severe AD.
• It aims to replicate the 83% change from baseline in EASI score observed in the phase one b study.
• Strategies to mitigate the placebo effect include minimizing US enrollment and using certified dermatologists.

Alopecia Phase Two b Study

• Evaluates Respag in 90 patients with alopecia.
• The study focuses on hair regrowth, with results expected in December 2025.
• If successful, Respag could become a biologic treatment for alopecia.

TrialNet Collaboration for Type One Diabetes (T1D)

• Nektar is exploring Respag’s potential in preventing T1D with TrialNet.
• Respag’s ability to induce a Treg response is central to this collaboration.

Financial Position and Outlook

• Nektar ended the fourth quarter with $221 million.
• The company has a cash runway until the fourth quarter of 2026.
• Future phase three trials may require additional financial strategies.

For a more detailed understanding, readers are invited to refer to the full transcript.

Full transcript - H.C. Wainwright 3rd Annual BioConnect Investor Conference 2025:

Unidentified speaker: Sorry. Good afternoon, everyone. My name is right now, Respag definitely the topic for Nektar. But before we dive into the real business, I’m just curious. So could you give us a quick overview of the Respag history?

How did it translate from a collaborative program with Lilly in back to your hands?

Jirik, Nektar: Sure. Yeah. So we invented Respag, aldesleukin, which uses the I l two protein sequence, and it’s the native sequence with no amino acid substitutions. And it’s conjugated with our core competency of our company, which is polymer chemistry. So it’s an IL two that’s covalently conjugated with polymer, and it’s done in a way that makes it Treg specific and Treg selective.

And we invented that molecule, and we entered into a partnership with Eli Lilly in 2017 to develop that molecule. We were actually just dosing, patients in the first in human single ascending dose study when we signed the actual agreement to work with Lilly. And then through that partnership, between the two companies, we completed nine clinical studies treating approximately 600 patients with Respag, about 200 patients with placebo across four different, autoimmune disease types of patients as well as healthy volunteers. And then in April of twenty twenty three, Nektar and Eli Lilly terminated a collaboration. And now respeg alvisleukin is a wholly owned asset for us at Nektar, and we’re developing it in multiple clinical trials that we’ll we’ll talk about later today.

Unidentified speaker: Sure. So I guess so obviously, we know a little bit about your story between you and Lily. Right? So but can you walk us through the phase one b data and highlights where they really messed up with, I guess? Sure.

Jirik, Nektar: So so one of the the nine completed studies that I mentioned was a phase one b study in patients with moderate to severe atopic dermatitis. And in that study, forty three people were treated, either to receive the high dose of Raspag twenty four per kilogram, the low dose of Raspeg at twelve micrograms per kilogram, or placebo. And and that study showed a couple of really important elements. Firstly, there was dose dependent efficacy that was clear to observe with the increasing doses of Respag. We also saw a very rapid onset of efficacy.

So, basically, within one dose of treatment, people were already starting to see skin clearance so much faster than what you see with other biologic therapies. And then we saw a remitted potential, whereas even though we only treated for twelve weeks, patients maintained their efficacy through thirty six additional weeks after stopping dosing. So those were key takeaways that we saw during the time of the collaboration. After we terminated the collaboration, that was the first time that we had the chance to look at raw data from that study. And when we received the raw data and we performed some additional follow-up analysis, we noticed that there was an error made in the calculation of the EASI score.

And EASI stands for eczema area and severity index, and it’s the principal efficacy readout for eczema or atopic dermatitis studies. So all of that, you know, led us to correct the data with the correct calculation of the easy score. And in this case, it actually significantly improved the data because the error that was made decreased the dynamic range of the measurement. When the error was corrected to the correct easy score, it improved the dynamic range, it showed that there was an even bigger drug effect we had observed before. As we’ve sort of moved further to delineate this, Eli Lilly had hired a third party CRO to conduct the statistical analysis of that study.

That CRO made an error. The error was made under Eli Lilly’s, you know, supervision of that CRO. But now that the data that we just published in October of last year in Nature Communications and first presented at EADV twenty twenty three in doctor Silverberg’s presentation, that is the correct data. And and Eli Lilly also agrees, of course, that that is the correct data.

Unidentified speaker: I see. So I guess for for the you Then, growth compared to the other drugs focused on the AD space?

Jirik, Nektar: Yeah. So the mechanism of Respag is is completely different from the other drugs being developed. Firstly, Respag is an agonist agent. Pretty much the entire AD pipeline are antagonist agents, whether they’re IL thirteen inhibitors, IL thirty one inhibitors, JAK inhibitors, even most recently an ITK inhibitor from company Corvus. All of those are designed to block some arm of activation of the immune system.

The way Respag works is it actually stimulates regulatory T cells, and regulatory T cells are the body’s natural inflammation dampening mechanism. Right? So they give us peripheral tolerance. They turn off normal inflammatory reactions that are happening inside of us all the time and help us maintain homeostasis of T cell responses. So the way Respag works is it’s really trying to restore the balance that’s underlyingly broken in patients that have a disease like atopic dermatitis.

And we think that’s one of the reasons why we see the a six month duration of efficacy after we stop dosing. Because at the end of the day, if you fix at least one of the underlying problems of the disease, that should give lasting relief to the patients. And we know a Treg can do that biologically.

Unidentified speaker: I see. So let’s looking forward, I think obviously you guys could have a readout next month. And so could you tell us a little bit about how the phase two designed and what’s your expectation for the data readouts? Yeah.

Jirik, Nektar: Yeah. So we wanted to build off of the phase one b results that that I mentioned earlier. So in that study, we focused on a biologic naive patient population. And we also did a really, I think, helpful job in mapping out the dose response because we used two dose levels in that study, twenty four micrograms per kilogram, twelve micrograms per kilogram, each dosed twice a month subcutaneously, so on a q two week regimen. And we saw a clear dose response as well as those other endpoints.

So when we launched into the phase two b study, we wanted to firstly upsize the study. So we’re running a very large phase two, at least double the size of typical phase two studies done in this space. Our study enrolled 400 patients with moderate to severe atopic dermatitis. The inclusion criteria that we’re using is identical to the phase one b. Patients had to have a 16 or higher baseline EASI score, an IGA of three or higher, and at least 10% body surface area involvement.

And they needed to be no longer controlled by topical corticosteroids, as well as having at least a six month diagnosis of atopic dermatitis. So the same exact patient population in the phase 2b as we already demonstrated proof of concept in in the phase one b. The other thing that we did was we extended the duration of dosing. Because while it was very exciting that twelve weeks of dosing with the complete drug withdrawal had such a profound effect, in reality, you wouldn’t treat patients that way. Right?

Especially patients that are responding, you would keep treating them longer. So in the phase two study, we’ve extended the induction period to sixteen weeks. So for example, on a two week q two week regimen, two extra doses following from the week twelve that we tested in phase one. And also, we, put in a maintenance arm into the phase two b study as well. And in the maintenance arm, we’re evaluating a once a month and a once every three months dosing regimen.

So all of those things give us a lot of confidence in the phase two b study. It’s really built on the success we’ve demonstrated in phase one, and it’s built leveraging every single thing that we’ve learned. And to that last point is the dose selection in that study. So we saw that twenty four microgram per kilogram dose given on every two week regimen was the most efficacious dose level in phase one. And so we’re replicating that exact same dose level in the phase two b.

We also are testing an eighteen microgram twice a month regimen as well q two weeks. That’s halfway between the twelve and the twenty four doses that we used in phase one. And then lastly, we wanted to keep the overall AUC exposure that we saw at the twelve microgram per kilogram q two week dose in phase one b, but with a different c max. And so to achieve that, we’re also testing twenty four micrograms per kilogram once a month, which matches the exposure, but does it by giving you a much higher c max because you’re giving twice the dose but with half the frequency. So between those three dose levels, we should we expect that we should see a nice dose response in the phase two b trial.

Unidentified speaker: So for that matter, what’s your expectation or your goal for for the dose response for the for the easy score reduction?

Jirik, Nektar: Yeah. Well, so we we definitely wanna see, you know, statistical, you know, power. So the first thing is it’s not a 40 patient. It’s a 400 patient study. And what we’d like to do is to be in that ballpark of replicating our phase right?

So we saw an eighty three percent change from baseline at the high dose of ResBag, which met the statistical significance. Even though that study wasn’t designed statistically, it was such a large effect size, right, that it demonstrated statistical, power, in that study. So we’d like to see if we can replicate that trial, with that kind of a result. But we also know that our mechanism is so differentiated from the standard of care. It’s not an antagonist.

It’s not an IL-thirteen or an IL-thirty one blocker. We’ve already demonstrated a remitted potential and a rapid onset of effect, at least two points of differentiation. So we know that even if our efficacy is in line with standard of care, that would be a success.

Unidentified speaker: I see. So just one more question regarding the study design wise. So obviously there’s a lot of discussion about how the placebo effect in the AD study. What kind of mitigation as effort you guys did try to make sure the placebo effect is not impact for your statistic analysis.

Jirik, Nektar: Yeah. One of the things that our our steering committee helped us with in 2023 when we were designing the study was they gave us a lot of very practical advice about what’s happening particularly around placebo. If you just look at a recent cross section of atopic dermatitis studies that have read out within the last five or so years, and that is the placebo effect is steadily going up. And one of the big culprits of that actually is The United States. In in The US, there’s such a great access to medicine, particularly drugs like Dupixent, that severe patients are much more likely to be prescribed DUPIXENT as opposed to be entered into a clinical trial where they might get placebo.

And so doctors are tending to sort of focus on moderate, in some cases, moderate to mild patients, that are the kind of patient population that they’re comfortable with advancing into a clinical trial. And what we’ve seen historically is if you look at mild, moderate, and severe, the placebo rate is by far highest in mild, intermediate, moderate, and the placebo rate is very low and severe. So the combination of access to medicine in The US was one. The second thing that we learned is that having consistency in the rating of the endpoint was paramountly important from an execution of an atopic dermatitis study. Meaning, we want board certified dermatologists to conduct the rating of the disease in the study.

And one of the pitfalls is many companies have used trial sites in The US that aren’t led by board certified dermatologists, but more generalists. We’re kinda general clinical trial sites that can do multiple kinds of clinical studies. And then you get inconsistent rating as well. So the second thing we did besides minimizing The US footprint was the vast majority of our sites were led by board certified derms that have successfully participated in phase two or phase three studies as well. The third thing that we did was we measured the baseline disease more than once.

Most studies just measure it at screening, use that at baseline, and then assess the patient. But many people might be in the midst of a flare, And that flare might be naturally resolved, and you wouldn’t know it if you just measured the baseline disease one time. So we look for people that had disease that was highly fluctuating between screening and baseline, and we would look to screen fail. People like that? So that was, you know, another key element.

So in the app applying all those plans, we actually only enrolled seventeen percent of our trial population in The US.

Unidentified speaker: I see.

Jirik, Nektar: And the rest of the population was enrolled rest of world, again, in vast majority of board certified derm sites.

Unidentified speaker: Gotcha. So let’s switch the gear a little bit to alopecia. So I guess the first obvious question is why alopecia? Yeah.

Jirik, Nektar: Great great question. So so one of the things that we noticed in the development program for Respact is that multiple skin biologies were positively impacted by RASBAC treatment. So the first thing we we noticed is we we were treating patients with lupus in only the second clinical trial. And it was a very short treatment, just six weeks, which is not long enough to really see a lot of change in major lupus endpoints. But we saw patients that had cutaneous manifestations of disease clear their skin very rapidly and in a dose dependent fashion.

And so that was very eye opening and led us to conduct both the psoriasis and atopic dermatitis studies, and the drug was efficacious in both of those as well. So alopecia, which is a skin disease, you know, primarily localized to the scalp as well as eyelashes, eyebrows, and facial hair in men, was always a disease that was of high interest. But it wasn’t really as strategic to our former collaborator because they were developing a lumiant, right, in that indication. But we really wanted to advance that because the biology of a normal hair follicle is a biology of a tissue that is completely immune excluded. We call it an immune privileged state.

And if you look at the histopathology of that, there’s a whole row of Tregs on the outside of every hair follicle that are actually, like, fighting back the immune system. So our hypothesis was always that if we could restore Tregs in people with alopecia, you should block the inflammation in the follicle, restore immune privilege, which would be fixing the disease. And so a, then the patient might potentially regrow hair. But then when they stop the drug, they would keep their hair, which doesn’t happen with the JAK inhibitor because all people that regrow their hair essentially lose it if they have to discontinue the JAK. So those were those were a lot of the the key scientific and translational reasons why we wanted to launch into that.

And so that is the second phase two b study, you know, that we’re running now. It’s about a 90 patient trial. And here, we’re evaluating two dose levels of Respag, twenty four micrograms per kilogram twice a month, and eighteen micrograms per kilogram twice a month. But here, it’s a nine month induction because it’s it may take longer, you know, to grow hair. You have to fix the inflammation, and then the hair follicle needs to go back into the hair growth cycle, and then you have to measure the actual hair growing.

So we’re doing a nine month endpoint, and we intend to, present the top line results of that study in December of this year. And, of course, the atopic dermatitis top line is coming in June, just next month for us.

Unidentified speaker: So I guess for the alopecia side, I I think it compare different from the AD space, there’s only JAK inhibitor approved for the alopecia. Right? So for your point of view, assuming Respag success, succeeding the alopecia, what’s kind of a position for the treatment, paradigm you think for the for the RasPACT?

Jirik, Nektar: Think you’ve hit the nail on the head. No no pun intended. But it’s I mean, there’s no biologic approved, right, in that space. And we’ve seen traditionally when a biologic enters an autoimmune or immunology condition, it causes a massive growth, right, of that market. We saw it first when, you know, Remicade and then Enbrel and then Humira, right, came into RA, grew to a $20,000,000,000 market.

We saw it again in psoriasis as first to that, Solara, then IL seventeen, then IL twenty threes, and each of those created massive growth. I think we’re seeing that happen now in atopic dermatitis, and I wouldn’t be surprised if alopecia, you know, is the next kind of frontier. And we love the fact that we have a really compelling mechanism, you know, to test for this indication, and we know it would be really transformational if you could create an agent that gave you durability of hair that was regrown. And so we’re very excited at the chance to potentially be a leader there.

Unidentified speaker: Definitely. So for the sake of time, I know you guys recently struck a deal with TriNet in the T 1 d. That’s quite interesting. So could you tell us more about the the story behind that partnership?

Jirik, Nektar: Yeah. We we’ve been talking with TrialNet for a while because in the in the understanding of type one diabetes, the role of Tregs has always been really paramountly important because this is a classical self reactive disease. Right? T cells are reacting to the islets and the beta cells in the pancreas. And we know that that’s driven by thymic antigens and thymic antigen presentation, and then basically a complete confusion, you know, of the immune system.

And so Tregs have always been been sought after, right, as a key way of controlling the peripheral tolerance that’s lost in people with type one diabetes. So TrilNet and Nektar have been in discussions for for many years. And it’s, we’ve made it through a very daunting, let’s say, scientific process, many, many meetings, many kind of key presentations of data, and they have a significant, and robust deliberation process to win and award the study. But we’re very excited that they picked our agent because it was really the most robust and reliable way of inducing a Treg pharmacological response, and they’re very interested in ultimately applying that to their goal of prevention of the disease.

Unidentified speaker: Gotcha. Thanks for thanks for that. Because you are scientists, I just saw an easy financial question to you. So could you remind us your cash position and, what’s the runway?

Jirik, Nektar: Yeah. We we just had our earnings call recently. We had about a 20 2 hundred and 20 1 million dollars that we ended the fourth quarter with. And then we currently have, runway until the fourth quarter of twenty twenty six with our existing company. Obviously, on phase two success, eyeing future growth or future phase three, then we would do some additional business work to bolster that position.

Unidentified speaker: Awesome, Jirik. Thank you for your insight today. Thank you, Arthur.

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