Nektar Therapeutics 2022 J P Morgan Presentation

Well, okay. Thank you, Jessica, for inviting us again to speak at the conference. It's an important kickoff for 2022. We very much appreciate being here today to give an update on our company. Before I get started, I'm going to be making some forward-looking statements. So good afternoon to everyone joining us, and thank you for joining us. As you know, Nektar is the leader in the development of medicines in the cytokine field. First, we work to harness multiple components of the IL-2 pathway with bempeg, which captures the immune-activating potential of IL-2. Second, with Nektar 255, which harnesses the IL-15 pathway, enables us to stimulate the immune system with NK cell proliferation and has broad potential in liquid and solid tumors. Finally, with Nektar 358, we've taken a very different approach to the IL-2 pathway and are instead capturing the immune-regulating potential of IL-2. We took this important and versatile cytokine and engineered a new molecular design to help those with a broad range of autoimmune conditions. In fact, if you look at the field here in cytokine development, there's really no doubt that Nektar is clearly the leader. As most of you already know, the trail that we blazed has spurred the creation of dozens of companies who have copycatted our programs in the cytokine space. Many of these are preclinical companies that have gone to the public markets, and of course, these companies have achieved billions of dollars in funding based upon the clinical data that Nektar generated with bempeg plus nivolumab. This clearly underscores the conviction within our industry around the incredible importance of IL-2 and other cytokines. Now with bempeg, we have a clear data set in first-line melanoma that led to a rare breakthrough therapy designation. On top of that, we're far ahead of other IL-2 companies with frontline and adjuvant studies in melanoma and several other studies in frontline solid tumor settings. This has allowed us to potentially secure several very large IO frontline indications where checkpoint inhibitors are widely used, selling billions of dollars. The history of development of checkpoint inhibitors tells us how important a leadership position is and why being bold with clinical development can make a difference for a first-in-class mechanism like bempeg. We have a development strategy that will reap benefits for us with six registrational studies underway. The first of which is our Phase 3 study in metastatic melanoma, which combines bempeg with nivolumab and compares to nivolumab in this setting. We're extremely excited that we are so close to having the results from this very important Phase 3 study, which we expect in the next few months. So I'll start with bempeg and IL-2. Now let me tell you why we believe we're unique in this field. As a full-length IL-2 molecule, it provides the right amount of receptor bias to activate cytotoxic T cells. To start, let me remind you of the history of the IL-2 pathway in cancer and why Nektar set out on this journey to make a new and accessible medicine from this important cytokine. IL-2 at high doses received its approvals in both melanoma and renal cell carcinoma in the 1990s. At that time, high-dose IL-2 was associated with complete responses, which were in fact durable for decades without a need for further therapy. But the usage of high-dose IL-2 was limited in practice. It turns out that only a small percentage of patients were strong enough to tolerate the severe toxicities of the high-dose IL-2 regimen. Its usage was limited by its functionality on the IL-2 receptors, and a high-dose regimen given in the hospital was the only way to elicit the clinical benefit of IL-2. So even though it had great promise, it was not really an accessible medicine. So our goal when we started the development of bempeg was to create a new and novel molecule that captured the positive attributes of IL-2 and also addressed the historical problems with high-dose IL-2. We have a technology platform that was well served to solve these problems, and we chose an approach that we believe is the best in class. Now what is so unique about bempeg? The IL-2 biological pathway has three receptor subunits: alpha, beta, and gamma. What we've done with bempeg is really very novel. We preferentially signal to the beta-gamma portion of IL-2, which stimulates the growth of cytotoxic T cells, but we do this without over-activating the alpha receptor, which can lead to down-regulation of the immune system. As the pioneers in the field, we could have easily designed an overly selective approach, as other companies that have followed us have done. Some companies are using mutated forms of IL-2 that only bind to beta-gamma receptors and don't bind to alpha at all. Again, that would have been really easy for us to do, but we purposely didn't do that. Based on our scientific work, we concluded that it was very important to retain some small amount of transient binding to the alpha receptor so you can enhance the priming of T cells in the lymph nodes. That means that you get T cell proliferation and infiltration of those T cells into the tumor when the new tumor antigen is presented. Another important thing that we did is that we used the full-length IL-2 molecule with no amino acid substitutions, rather than a mutated version, to ensure that we did not see any tachyphylaxis on the receptor or issues that mutants can have over time in vivo. The other tremendous advantage of bempeg is that it's a prodrug. Because it's a prodrug, you don't have the risk of a cytokine storm that you may see with a non-prodrug approach. Of course, this is something you want to avoid in a medicine that could potentially be used in so many cancer patients. Lastly, and I think a very unique advantage of a prodrug is that this allows bempeg to be given on an antibody-like dosing schedule, in fact once every three weeks. We're very pleased with this profile, as our goal is to combine with checkpoint inhibitors where the dosing schedule can work easily together. This gives bempeg ease of administration in an outpatient setting, which is critically important with a broad-based mechanism. So now let me show you the rationale for combination with a checkpoint inhibitor. The combination is really quite simple and elegant. We think of it like building the best race car. We know that targeting the PD-1 pathway may strengthen the immune response by reactivating cytotoxic T cells that have been stopped by the expression of PD-1 and PD-L1. We think of this as removing the brakes on the immune system. This alone, of course, has proven to be very effective for many cancer patients, particularly those with high levels of PD-L1 expression. So we release the brakes by targeting PD-1 with a checkpoint inhibitor. Then, by preferentially targeting the IL-2 pathway to significantly increase the number of cytotoxic immune cells in the tumor microenvironment, we put our foot on the gas. These new immune cells also upregulate PD-1, as we have shown in the clinic with patients treated with bempeg. The end result is that the two together, bempeg plus nivolumab, could potentially drive deeper and more durable responses in patients. So let me show you how this concept of releasing the brakes and hitting the gas on the immune system translates into clinical data. This is our Phase 2 data in patients with first-line Stage 4 metastatic melanoma. I think this is a very good indicator of the potential of bempeg and the importance of harnessing the IL-2 pathway. If you look at these data, you'll see that 34% of the patients had a complete response to therapy. For those patients who responded, 90% of them had a reduction of 100% in their target lesions. That's incredibly impressive. This data is all centrally read, blinded radiology review, not investigator assessed, so I think that's very important to note. We believe this is why bempeg is so important, and it could have the potential to help patients get to deep and durable responses, certainly with the goal of any cancer therapy. The median reduction in target lesions was in excess of 78%, very notable when you look at historical single-agent nivolumab data where the median depth of response was about 35%, and even with the ipilimumab-nivolumab IO doublet therapy where the median depth of response is only about 52%. In addition, we had very sick patients with liver metastases who benefited. In fact, five of ten patients with liver mets experienced complete responses from the doublet therapy. These data led to a breakthrough therapy designation for bempeg plus nivolumab, which is very rare in any first-line treatment setting in solid tumors. Of course, as I said earlier, high-dose IL-2 delivered complete responses in melanoma and was approved there. So we have actually seen with bempeg in Phase 2 study exactly what you'd expect to see when you combine the right IL-2 mechanism with a checkpoint inhibitor in melanoma patients. Now I'd like to show you our PFS curve in these patients. Shown here is the median PFS for this cohort in the Phase 2 study, and as you can see, it was 30.9 months. To remind you of the bars here, we have designed our Phase 3 study in first-line melanoma patients with nivolumab single-agent therapy as the comparator arm. We have a very good idea of how nivolumab performs as a single agent in these patients. In CheckMate 067, we see about a six-month PFS, and in the Relativity study, a four-month PFS with nivolumab as a single agent. So this PFS curve shows the potential of what can happen when you release the brakes and hit the gas on the immune system at the same time. Shown here are the six registrational trials underway for bempeg. Three of these studies will have data readouts in the first part of this year: the melanoma, kidney cancer, and bladder cancer trials. In melanoma, where the results come first, we do have a breakthrough therapy designation, and this will enable us to file quickly once we have positive Phase 3 results. The broad program for bempeg covers both adjuvant and first-line solid tumor settings and positions bempeg in the most significant tumor types where checkpoint inhibitors are used today. Current sales of checkpoint inhibitors in these tumor types are over $6 billion, so a very significant opportunity for bempeg. Now with that, I'd like to shift gears and discuss our next large cytokine program in development, our IL-15 agonist Nektar 255. Nektar 255 causes the proliferation of natural killer cells and also expands CD8-positive T cells and memory cells. Nektar 255 has the potential to combine with both ADCC antibodies and CAR-T cell therapies. I'd like to show you how this works. If you think about it, one of the problems associated with ADCC antibodies like rituximab, Herceptin, and Erbitux is that they are all fantastic drugs, but they deplete NK cells. As they deplete NK cells, they stop working. We believe if you can combine a drug that proliferates NK cells with these antibodies, you should have a profound effect. I'm going to talk about what we're doing in the clinic in a moment. We also believe we have an important opportunity in the area of cell therapy. We know that CAR-T therapies can be effective for some patients, but this benefit may only last for a relatively short period of time. An interesting observation is that for patients who do have durable responses with CAR-T, we see increased levels of IL-15. So by adding IL-15 to CAR-T, the theory is that you should be able to drive a much better duration of response. In this context, we think of Nektar 255 serving as a cell therapy potentiator. Now let me show you our development plan for this novel molecule. First, we're pursuing a clinical study in liquid tumors in relapsed/refractory patients with multiple myeloma and NHL, specifically B-cell lymphomas. We've largely completed our monotherapy work in this study, and we'll be expanding to combine with rituximab and Darzalex in the second part of this study. We have a collaboration with Janssen for supply of Darzalex for this portion of the study. Second, we have a trial underway in head and neck cancer and colorectal cancer. This study is combining Nektar 255 with Erbitux or cetuximab in these relapsed solid tumor settings. As you know, cetuximab has a very low response rate, around 10% or so, in these highly refractory patients, and we hope to improve upon that with the addition of Nektar 255. Finally, in 2021, we entered into an exciting new collaboration for Nektar 255 with Merck KGaA and Pfizer to combine it with avelumab in their approved indication in bladder cancer. This is a Phase 2 comparative study that is being run by Merck KGaA, and we're very excited about the opportunity here. I'll show you what we've seen in the clinic with Nektar 255 so far. With Nektar 255, we really have an agent that can be used in both liquid and solid tumors. We now know that we're increasing NK cell levels in a meaningful way. We also have an approach which can allow us to build a dose regimen in combination with these antibodies. In our early dose escalation work, we have observed a consistent increase of natural killer cells as well as CD8-positive T cells across multiple tumor types, including multiple myeloma, non-Hodgkin's lymphoma, colorectal cancer, and head and neck cancer. We see up to a nine-fold increase in NK cells, and our pharmacokinetic profile is highly predictable, allowing us to dose Nektar 255 every three weeks or every four weeks. Importantly, we see increases in NK cells even in the toughest patients, including multiple myeloma patients with compromised bone marrow. This is a very important attribute of Nektar 255. So we believe this novel IL-15 agent has an optimal PK profile, an optimal PD profile, and this should allow Nektar 255 to be given as a monotherapy and in combination with targeted antibodies. Now I'd like to briefly share with you some interesting data on the CAR-T front that we presented at the recent ASH congress. This is patient data analyzed by our colleagues at the Fred Hutchinson Cancer Center. This chart shows patients with highly relapsed and refractory NHL and multiple myeloma enrolled in the Nektar 255 study who also had CAR-T as one of their prior therapies before entering the study. Three of these patients were well over a year past their CAR-T infusion. That's very important. All of them had minimal levels of detectable CAR-T at baseline prior to entering the Nektar 255 clinical study. What we saw in all four of these patients with detectable CAR-T at baseline was a substantial increase in these cells after treatment with Nektar 255. Again, this is important. This was seen in patients where it had been more than a year since they had their CAR-T infusion. We think this reinforces our conviction that there's an important role for Nektar 255 as a CAR-T potentiator. Our next steps in the clinic will be to evaluate dosing of Nektar 255 shortly after CAR-T infusion to see if we can generate even more durable responses for patients. Now I'll switch gears and move to our work in autoimmune disease with Nektar 358. Nektar 358 is really the polar opposite of bempeg's mechanism. Instead of stimulating cytotoxic T cells, Nektar 358 is designed to induce regulatory T cells. This is a schematic of the novel biology that we're unlocking with Nektar 358. You could think about this conceptually as autoimmunity being the result of an imbalance of a patient's immune system, with an excess of effector T cells and a deficiency of regulatory T cells. Nektar 358 is designed to fix this and bring the immune system back into balance. This means Nektar 358 really could be a novel resolution therapeutic for autoimmune disorders that doesn't cause broad-based immune suppression, which is a problem with current therapies. This important program is being developed with our partner Eli Lilly. In fact, this is actually the slide that they recently showed at their annual investor meeting in December. Now I'd like to show you a piece of data from our study of Nektar 358 as a single agent in lupus patients. Shown here is data from our multiple ascending dose study in lupus. What we are really excited about is the signal we saw with the CLASI scores. This is a score that measures the skin manifestation of lupus. When we look at patients that started with moderate skin scores of four or higher, we see a dose-dependent drop in these patients. Seven of the 18 patients who were on the drug treatment arm had score drops of four or more. So it's exciting to see that we could achieve this with only three doses of single-agent Nektar 358. This data led to Lilly launching a Phase 2 study in lupus patients, which is underway. In addition, Lilly recently announced incredibly encouraging data in atopic dermatitis for Nektar 358, and I'd like to share this with you now. Here's the data from a study Lilly conducted in patients with moderate to severe atopic dermatitis, or eczema. Lilly considers this to be a true proof of concept for Nektar 358 in this disease setting. Improvement of atopic dermatitis is easy to measure and has clear endpoints, and this has allowed Lilly to evaluate early efficacy in this setting. The clinical trial was 12 weeks of therapy with single-agent Nektar 358 compared to placebo. What Lilly also did was to follow these patients for quite a while after the last dose of Nektar 358. At 12 weeks, we see really robust efficacy at the highest dose of Nektar 358, shown here in blue, with a very clear separation from placebo. This efficacy at 12 weeks is comparable to the current standard of care Dupixent at 16 weeks. But clearly the most fascinating aspect of the study was that when we look at patients 36 weeks after we stopped dosing Nektar 358 therapy, their skin scores remained very low and even dropped further. This has us and Lilly very excited about the potential for durability with Nektar 358. These data really underscore our hypothesis that if you increase the function of regulatory T cells, you might in fact see a durable clinical signal like we see here even after treatment ends. These exciting data led to Lilly now planning a Phase 2 study in atopic dermatitis, which further expands their Phase 2 program for Nektar 358. Here are the Phase 2 studies in the Nektar 358 program. We have a 280-patient Phase 2 study in lupus underway, a second Phase 2 study in 200 patients with ulcerative colitis underway, a third Phase 2 study planned in atopic dermatitis, and a fourth Phase 2 study in autoimmune disease expected to start this year. So we're really poised to have a steady stream of data coming from these Lilly studies over the next 12 to 18 months. We're pleased with the thoughtful and comprehensive approach that they've taken with this molecule. To remind you, our agreement has significant double-digit royalties for sales of Nektar 358, along with the option to co-promote. We're truly excited about how large the opportunity is for this potential resolution therapeutic. Now before I share our 2022 upcoming milestones with you, I want to show you our entire clinical pipeline. If you take a look at the therapeutic areas where we're working and the sheer breadth of our clinical programs, I'm very proud of how we built this strong pipeline from a platform of immune science and a leadership position in the field of cytokines. So here are our milestones for the next 18-month period. For Nektar, we're ending 2021 with approximately $800 million in cash and equivalents. For bempeg, 2022 is a very big year, and we look forward with great excitement to the Phase 3 study results. For Nektar 255, the study with avelumab in bladder cancer will start in the first half of the year, and we should have continuing data from our studies in liquid and solid tumors. Lastly, for Nektar 358, we expect our partner Lilly to present data from multiple clinical studies over the next 12 to 18 months, and they will also initiate the next two Phase 2 studies of Nektar 358, one in atopic dermatitis and one in another new indication. So in summary, Nektar has an outstanding portfolio with a very long list of late-stage clinical studies that positions us with significant data readouts coming very soon. We have a very strong cash position and are highly confident in our business heading into 2022. I'm very excited about where we are today and what is ahead of us. I'd like to thank all of you for listening. With that, I'll end my presentation and hand it to Jessica to lead us in a Q&A session. Thank you.

Well, I think clearly the measurement point is nivolumab. I don't know that I... of course, everything that's new sets a new bar, but that isn't our comparison, and we're not making a comparison against LAG-3. So I think you have to look at these studies individually, see how we compare against nivolumab. But clearly, what's really important to remember here is that the mechanism is well defined, well understood. The use of IL-2 is well documented, well elucidated. Therefore, I think conceptually, if we have a successful trial, and I'm hopeful that we do, that should actually set a new bar, certainly in melanoma. If you look at our PFS of 30.9 months, I obviously don't know what it's going to look like in the Phase 3 study, but that was an incredible number. I don't think you have to make a comparison to the Relativity study. I think you have to look at this as its own. It is a completely different mechanism, a completely unique approach, and it will be highly used. I actually believe it can become the gold standard in melanoma.

Yeah, look, I think it's a very good question. It certainly took longer than we would have liked, quite frankly. I think, believe it or not, the COVID shutdown had a major role in that. I believe we weren't enrolling patients for six or eight months because of the COVID shutdown. I do think that we also wanted to make sure that we had the pharmacokinetic profile dialed in and fully tested before we kept enrolling patients. But I think one of the largest factors there was COVID, and it's definitely slowed down our trial and the trial for other companies as well.

Well, look, I think clearly IL-2 has a great history, even high-dose IL-2 has a great history in melanoma and renal cancer. So I would like to believe that if we see positive results in melanoma, we also will see positive results in renal cancer. However, they are three completely different tumor types with varying degrees of immune responsiveness. So it's hard to get that read-through. Obviously, a positive study in melanoma bodes well for what we see in renal and bladder, but it's hard to make that call at this point.

For my mic? Yes, that question certainly would come up. Look, as I said in my presentation, it'll be within the next few months. Obviously, I can't give specific guidance on that, but it'll be coming in the next few months. I think it's listed in clinicaltrials.gov as April, and let's see how that evolves. But we're excited about it, and it should be a dramatic benefit for Nektar. That's what we're hoping. So thank you for doing this, Jessica. I appreciate it.