NKTR Q3 2026 earnings call transcript, November 12, 2026

Thank you for joining us today. On today's call, you will hear from Howard Robin, our President and Chief Executive Officer, Dr. Mary Tagliaferri, our Chief Medical Officer, Dr. Jonathan Zaleski, our Chief Research and Development Officer, and Linda Rubenstein, our Chief Financial Officer. Before we begin, I would like to remind you that we will be making forward-looking statements regarding our business, including statements related to therapeutic and commercial potential and development plans for RESPEC-ALBIS-Lukin, the timing and execution of clinical trials, expectation for clinical data and regulatory filing, potential strategic partnering activities, financial guidance, and other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, many of which are outside of our control. For a discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent Form 10-K and subsequent filings. We undertake no obligation to update these forward-looking statements, except as required by law. A live webcast and replay of this call will be available on the Investor. Investor Relations section of our website at Nectar.com. With that, I'll turn the call over to Howard.

Thank you to everyone for joining us this afternoon. Q3 was a transformative quarter for Nectar as we advanced ResPeg into Phase 3 studies. Building on its compelling Phase 2 results across two key immune derm indications, we initiated a comprehensive Phase 3 plan for ResPeg. Both ectopic dermatitis and alopecia areata. Our global Phase 3 studies in ectopic dermatitis have started, and our Phase 3 study in alopecia areata is on track to start in December earlier than was originally planned. As we said last quarter, we anticipate our first top-line data readouts for the ectopic dermatitis studies will be in the summer of 2028. In the U.S. alone, over 31 million people are estimated to have eczema. The U.S. market for treatments for this chronic disorder is expected to grow to over $30 billion by 2033. In spite of a number of approved systemic therapies to treat patients with moderate to severe ectopic dermatitis, only one in four patients today receive a systemic treatment. Ectopic dermatitis is a highly heterogeneic disease, meaning the biology driving the underlying disease state, can be complex and can vary significantly from one patient to another. The current approved biologics target one single inflammatory pathway, specifically the type 2 inflammatory pathway and mostly through IL-13 cytokine blocking. In order to ensure we have treatments that can address the needs of all patients with ectopic dermatitis,

it is necessary to have novel mechanisms that target the heterogeneous nature of this disease. Importantly, today we know that at least half of patients on an existing biologic report inadequate control of their ectopic dermatitis for this reason. To that end, RESPEG's novel TREG mechanism offers a critically important therapeutic modality for patients and one that is currently missing from the treatment armamentarium. We know from our market research that physicians are looking for different mechanisms of action than those that are already approved. Rather than blocking a single downstream inflammatory pathway, RESPEG's first-in-class TREG approach selectively expands the immune cells to restore immune balance. In other words, we're addressing the underlying inflammatory survivors rather than simply controlling the symptoms of the disease. Jay-Z will talk more about some of the important translational work we have from RESPEG-AD, which demonstrates the unique profile we have for RESPEG. In the commercial landscape in ectopic dermatitis, we've already seen clear evidence of the demand for a mechanism outside of IL-13. Nemluvio, which is an IL-31 cytokine blocker, gained a label in ectopic dermatitis only in combination with topicals. And based on recent U.S. claims data, Nemluvio is capturing at least 10% of new treatment starts about seven quarters into launch. In fact, since its launch, Depixen has lost these new-to-brand patients starts going from an 81% share of starts in 2024 to 65% today,

which we have. with more than half of the share that Depixen has lost going to novel MOAs. Physician willingness to start patients on a novel agent outside of Depixen reaffirms for us the market research we've conducted for ResPeg, indicating an opportunity for ResPeg in first-line as well as second-line treatments. With the recent setbacks in the OX40 class, we believe there are no agents in mid-to-late state. development that address the underlying heterogeneity of disease and ectopic dermatitis in the way that ResPeg addresses it by targeting the full range of inflammatory pathways. This gives ResPeg a truly unique competitive position. In our research, approximately 90% of surveyed dermatologists indicated that they would consider starting a patient on ResPeg before starting a patient on another biological. or a JAK inhibitor. This underscores the dermatologist community's receptiveness to try novel MOAs as a first-line treatment. With regulatory agency alignment, we're advancing our Phase III program to support a broad label, including first-line use in patients new to biologics and JAK inhibitors, as well as second-line use in previously treated patients. In alopecia area, ResPeg has a unique opportunity to offer a compelling first-line therapy as compared to the existing approved JAK inhibitor class. Oral JAK inhibitors require daily dosing and carry box safety warnings and laboratory monitoring requirements. The market, according to Decision Research Group, is forecasted to reach approximately $5.2 billion by 2033. And Mary will talk more about our Phase III program.

And ectopic dermatitis and alopecia areata in a few moments. And at the recent EADB conference, we presented multiple oral presentations for RESPEG, which Mary will also review in a bit. Beyond our two lead dermatology indications, we believe RESPEG continues to offer broad potential in other autoimmune indications. The Phase II study in new onset type 1 diabetes sponsored and funded by TrialNet is ongoing. We currently estimate that we could have data from the first cohort of patients in late 2027. And as I said last quarter, we're planning to initiate a new signal seeking trial for RESPEG and another immune indication. And Mary will talk more about our specific plans and that opportunity. And with that, I'll turn the call over to Mary.

And good afternoon, everyone. As stated earlier, we had a significant presence at the EADV conference with three separate oral sessions for RESPEG. We had two presentations for RESOLVE-AD. One was a very important translational biomarker sub-study conducted at Mount Sinai, and the second was our 52-week monthly and quarterly maintenance dosing data. For alopecia areata, we presented off-treatment data demonstrating strong retention of hair regrowth and additional hair regrowth. Regrowth for patients who received 52 weeks of RESPEG treatment and were followed for six months off treatment. On the heels of this strong EADV presence for RESPEG, we are enrolling patients into our Phase III Zenith AD program. Our global Phase III Zenith AD program includes three pivotal studies with 510 patients 12 years or older in each study. All three of these studies have been initiated. The first Let's go. Zenith AD1 study is evaluating RESPEG monotherapy in patients who are oral JAK inhibitor and biologic naive. For Zenith AD2, we've recently made a change to adapt this study to evaluate RESPEG in combination with topical corticosteroids and enroll both naive and experienced patients. This change incorporates recent input from regulatory authorities and is intended to support a label for RESPEG that... extends beyond monotherapy to combination use with topical corticosteroids. CNF83 is enrolling patients who are JAK inhibitor and biologic experience. With these three studies enrolling a total of approximately 1,500 patients, we now have a registrational program designed to support the broadest possible label for RESPEG at commercial launch, spanning adults and adolescents, biologic...

and JAK inhibitor naive and experienced patients, and monotherapy treatment, as well as combination use with topical corticosteroids. The program positions RESPEG for usage across the full spectrum of patients with moderate to severe atopic dermatitis. As Howard stated, we still expect our initial top-line data in the summer of 2028 from the Zenith AD studies with a goal of filing a BLA by the end of 2020. All three Zenith AD studies include a 24-week induction period with patients receiving RESPEG at 24 micrograms per kilogram every two weeks, or placebo. The primary registrational endpoint is an investigator's global assessment, or IGA, at week 24. EZ-75 is a key secondary registrational endpoint, and will also serve as a co-primary endpoint with IGA. significant territories outside the United States. Other important endpoints, which are multiplicity protected in the trials, include itch and patient-reported outcomes, as well as control of comorbid asthma, which affects approximately 25% of patients with moderate to severe AD. After 24 weeks, patients who achieve an EZ-75 or IGA-0 or 1 response will enter a 28-week maintenance period. Evaluating less frequent monthly and quarterly dosing. During induction in the Phase 2B Resolve AD trial, RESPEG demonstrated a rapid onset of activity, with early improvements in skin clearance and itch, and strong efficacy across key clinical endpoints.

The longer-term results that were presented again at EADV provided further evidence of RESPEG's potential to deliver durable and deep disease control. Importantly, both monthly and quarterly maintenance dosing demonstrated sustained responses across key measures of disease activity, including easy responses, clear or almost clear skin as measured by VIGA, and clinically meaningful itch release. We also saw new responses emerge in patients who had not achieved these thresholds during induction, with more patients reaching complete skin clearance over time. As Howard mentioned, we will report the 52-week off-treatment follow-up data from Resolve AD in the first quarter of 2027. As a reminder, we ran an induction treatment and a maintenance treatment in Resolve AD. You'll recall that patients who completed the maintenance treatment on Resolve had high durability of responses and continued deepening of responses for endpoints like EZ75, EZ90, and EZ100. Patients who completed the maintenance treatment of 52 weeks entered an off-treatment follow-up period where we continue to evaluate the maintenance of their responses. For these patients who completed 52 weeks on treatment and entered the off-treatment evaluation period, we assessed their maintenance of disease clearance, including EASY and other metrics of disease that are patient-reported, such as itch and quality of life. After completion of the 52-week on-treatment maintenance portion of the trial, follow-up off-treatment assessments were done at weeks 4, 13, 26, 39, and 52.

A total of 125 patients in Resolve AD completed the maintenance treatment period. Of those, 110 patients were in the ResPeg maintenance treatment arm, and 15 were in placebo. The placebo patients were included in the off-treatment period to continue to maintain the blind for patients in the study. Of note, there was no option for additional treatment or enrollment into a long-term extension study following the 52-week off-treatment period. This differs from all the placebo withdrawal studies for the current approved agents. In Resolve AD, patients received no injections during the off-treatment period, unlike placebo withdrawal designs that continue a sham injection. To our knowledge, only one other trial has included an off-treatment follow-up that was not a placebo withdrawal design. This is the Phase II ROCA-OCT40 study. Their on-treatment period was only 36. And their follow-up off-treatment period was only 20 weeks without sham placebo injection. So, what sort of bar are we looking for here? As we've done when we reported our maintenance data, we like to look at Dupixent as a good comparison. When you look at Dupixent, they completed a nine-month follow-up off-treatment analysis looking at maintenance of the EZ75 response. Now, this study was a placebo withdrawal design, but they reported that approximately 50% of the patients maintained their EZ75 at nine months off-treatment.

If we see this level of maintenance of EZ75 at 12 months off-treatment or better, that would be an interesting finding. Why? Because it opens up the possibility to move EZ75 responders to quarterly dosing after 50 months off-treatment. 52 weeks of induction and maintenance treatment. Additionally, as further differentiation, such results could create the potential for patients achieving a deep and sustained response across multiple disease measures to transition to dosing as infrequently as every six months following 52 weeks of induction and maintenance therapy. Now turning to alopecia areata. We recently presented new off-treatment results. for the first time at EADV that provide further evidence of RESPEG's mechanistic potential to deliver durable and deepening responses. In April, we presented data that showed treatment with RESPEG through week 52 resulted in higher SALT 20 responses. At EADV, we showed that these patients sustained their responses for months after their treatment ended. This is especially important analysis. Alopecia areata, where loss of hair regrowth following discontinuation of a JAK inhibitor is a major concern for both patients and physicians alike. This durability of response supports evaluating less frequent maintenance dosing after one year of twice-monthly RESPEG treatment for patients who achieved SALT 20 or better. For example, 7% of patients who were treated for 52 weeks achieved a...

SALT 10 at the end of treatment, and 6 months later off RESPEG, 19% of patients had achieved SALT 10. These data demonstrate real promise for patients. Importantly, we have now shown multiple times that treatment with RESPEG demonstrated durable responses across atopic dermatitis and alopecia areata. Together, this reinforces RESPEG's potential to deliver... ...sustained disease control with infrequent dosing, a potentially important differentiator in the treatment of chronic inflammatory diseases. Our Phase III Zenith AA study will start next month. This single global registrational study will enroll approximately 850 patients, ages 12 and up, with severe to very severe alopecia areata. Patients will receive RESPEG at 24 micro... per kilogram every two weeks or placebo through week 52. The primary endpoint will be SALT 20 or less at week 52. The study will include both patients who are naive to systemic treatment and patients who have previously received the systemic agent after an appropriate washout. It will also enroll patients with a current alopecia areata episode of up to eight years. Following 52 weeks of treatment, patients will enter a long term extension. Those patients who achieve a good response during the 52 weeks of treatment will receive monthly or quarterly maintenance dosing. We currently expect data from Zenith AA in 2029. With Zenith AA, the overall Zenith program will enroll approximately 2,400 patients 12 years and older across the atopic dermatitis and alopecia areata studies.

enabling a substantial safety database to support registrational approval. Separately, we are also planning an investigator-sponsored study that will be conducted at Mount Sinai in patients with alopecia areata, which will include moderate alopecia areata patients as well as severe and very severe patients. The population of moderate patients is a large opportunity, and we believe generating... data in this patient population is critical as we think of the overall positioning of RESPEG across the entire alopecia areata patient population. This IST will start in the first half of next year. As Howard mentioned, we are also planning to explore new indications with RESPEG. The first study we are planning is a proof-of-concept study in about 30 patients with vitiligo. Vitiligo represents a... a compelling potential expansion opportunity for RESPEG with a significant unmet need, a large underpenetrated market, and strong mechanistic rationale for TREG-based therapy. Today, there are approximately 1.9 million Americans with vitiligo, yet only 15% seek treatment. Similar to the competitive landscape in alopecia areata, the only approved agents for those in late... stage development are JAK inhibitors. All these agents, whether oral or topical, come with significant safety concerns and lab monitoring burdens. Moreover, most patients lose near-complete repigmentation within a year of stopping treatment with JAK inhibitors, presenting an unmet need for differentiated treatment options that can lead to durable responses and less frequent doses.

Importantly, vitiligo biology provides a strong rationale for ResPeg. Vitiligo is an autoimmune derm disease in which cytotoxic CD8-positive T-cells attack and destroy melanocytes. This phenomenon results in impaired Tregs characterized by loss of IL-10 and TGF-beta-1 regulation, which results in loss of pigmentation. In a minute, JC will talk more. More about the biomarker sub-study from Resolve-AD that was presented at EADB. Critical to vitiligo, that study showed that treatment with RESPEG led to serum IL-10 and TGF-beta-1 elevations as early as week 2, which were positively correlated with clinical effect at week 16. By restoring both Treg number and function in patients with vitiligo, RESPEG has the potential to generate meaningful... clinical responses in this indication. This study, which will start in the next few months, will generate proof of concept data in late 2027 or early 2028. Building on this, we continue to explore additional indications where RESPEG's novel Treg approach has clinical applications, including asthma, where RESPEG has already demonstrated strong reduction in ACQ-5 scores in patients... ...of atopic dermatitis and comorbid asthma. We look forward to sharing more as these programs develop. With that, I will turn the call over to Jay-Z. Jay-Z?

I'd like to spend a few minutes talking about the biology of RESPEG, and specifically the biomarker data we presented at EADB, which provide important new insights into how RESPEG works and help us better understand the clinical... responses we've observed. As Howard mentioned, atopic dermatitis is a complex heterogeneous disease involving multiple inflammatory pathways. However, the currently approved biologics target only one inflammatory pathway, specifically type 2 inflammatory pathway, through IL-13 cytokine blockade. RESPEG, on the other hand, is designed to selectively expand the immune cells that help restore balance across multiple pathways. And to better characterize this novel TREG mechanism, we worked with investigators of Mount Sinai to conduct a biomarker analysis in 100 patients from the Resolve-AD study. The sub-study analyzed gene and protein expression in blood samples and non-invasive skin tape strips, comparing RESPEG at the doses selected for phase 3 with placebo. The results showed that as early as week 2, there were significant increases in FOXP3 and IL-2 RA, two important markers of regulatory T-cell activity. And at the same time, we saw changes consistent with normalization across multiple inflammatory pathways involved in atopic dermatitis, including Th1, Th2, and Th17 inflammatory pathways, as well as JAK-STAT signaling. And these effects were evident in both the skin.

And circulation, providing further evidence of the breadth of ResPag's mechanism. Importantly, we were also able to establish a relationship between these early molecular changes and the subsequent clinical improvements. Changes in several blood biomarkers at week two, including increases in IL-10 and TGF-beta-1 expression, and reductions in the inflammatory marker TARC, were significantly correlated with greater improvements. in EASY scores at week 16. These correlations were statistically significant in RESPEC-treated patients and were not observed in the placebo group. The RESPEC-treated patients in this sub-study also achieved a mean 64% reduction in EASY at week 16, consistent with the results in the broader study population. We also observed changes in the molecular signature associated with cardiovascular disease, atherosclerosis, and alopecia areata, strengthening our belief in RESPEC's potential as a pipeline in a product. These findings provide important validation of RESPEC's differentiated mechanisms. They show that RESPEC induces early regulatory T-cell-associated activity and influences a broad range of inflammatory pathways with molecular changes that are linked to later clinical improvement. Beyond RESPEC, we are continuing preclinical work for our TNFR2. program, which includes Nectar0166, our bispecific program that combines Nectar0165, our TNFR2 agonist antibody, with a second validated immune target that we have not yet disclosed.

This program extends the same core strategy that underpins RESPEC, developing therapies that restore immune regulation rather than simply suppressing a single inflammatory signal. And with that, I will turn the call over to Linda to review our financial procedures.

And our first question will come from Yasmeen Rahimi from Piper Sandler. Your line is open.

From TD Cowan, your line is open.

From William Blair & Company, your line is open.