NEKTAR THERAPEUTICS Q1 FY2025 earnings call

• Focused on advancing the immunology pipeline, with REZPEG in three Phase 2 studies: REZOLVE-AD in atopic dermatitis (top-line results from 16-week induction period expected in June, 36-week maintenance data in early 2026), REZPEG-AA in alopecia areata (top-line results in December), and a Phase 2 TrialNet-sponsored study in Type 1 diabetes (starting later in 2025). - Advancing NKTR-0165, a TNFR2 agonist antibody, through IND-enabling studies, with preclinical data showing high specificity for TNFR2 on Tregs. - Designing bispecific molecules like NKTR-0166, incorporating TNFR2 agonism with other antibody targets. - Strong financial position with $220.7 million in cash and investments at the end of Q1 2025, cash runway extending into Q4 2026.

In the first quarter of 2025, Nektar Therapeutics had revenue of $10.5 million from non-cash royalty revenue. R&D expenses were $30.5 million, G&A expenses were $24.3 million, non-cash interest expense was $5 million (expected to total ~$20 million for 2025). There are no distinct product segments with revenue contribution percentages provided, but the focus is on the immunology pipeline including programs like REZPEG, NKTR-0165, etc.

• Quarterly revenue expected to remain similar to Q1 2025 for the rest of 2025, totaling ~$40 million. - Full-year R&D expense expected to range between $110 million and $120 million, including ~$5 million to $10 million in non-cash depreciation and stock-based compensation. - Full-year G&A expense expected to be between $60 million and $65 million, including ~$5 million to $10 million in non-cash depreciation and stock-based compensation. - Non-cash interest expense expected to total ~$20 million for 2025. - Non-cash loss from equity method investment expected to be ~$10 million for full-year 2025. - Intention to enter a quiet period in June until reporting REZPEG atopic dermatitis study top-line results.

• Forward-looking statements subject to uncertainties and risks difficult to predict, many outside of control. - Important risks and uncertainties set forth in Form 10-K filed on March 14, 2025. - Litigation with Lilly, where Nektar strongly believes it has been damaged and is actively pursuing legal action.

Q: Could you remind us what you hope to see in REZOLVE-AD to move forward into a Phase 3 and is your plan to move forward with one or two doses for that? And what is your expectation for the placebo response in REZOLVE-AD?

A: JZ stated they hope to replicate Phase 1 data, compare against benchmarks like Dupixent, and ideally identify one dose level to take forward. Expectation for placebo response was related to proactive measures taken to control it, but actual rate would be reported when top-line results are presented next month.

Q: How many patients have progressed to the maintenance portion of the REZOLVE-AD trial so far and of those - how many have crossed over to the escape arm?

A: JZ stated they can't disclose that information currently but will when reporting top-line results next month.

Q: When you share the results from the Phase 2b atopic derm data, can you talk about the scope of the data you're planning to share and of the secondary endpoints which are most important?

A: Howard Robin said primary endpoint would be key, with secondary endpoints including EASI-75, EASI-90, IGA, itch, and tolerability.

Q: Will you be taking weight-based dosing into Phase 3 or will it be a fixed dose?

A: Howard Robin stated they plan to continue weight-based dosing as it's critical for the drug, similar to many other drugs.

Q: Can you remind us what is the dropout rate for your Phase 1b atopic dermatitis trial? What is the expectation for your Phase 2?

A: Howard Robin mentioned dropout rates from Phase 1b were 30% for placebo and low to mid-20s for REZPEG arms, and dropout rates for Phase 2 would be reported when top-line results are presented next month.

Q: When you share the results from the Phase 2b results study, can you talk about the scope of the data you're planning to share and of the secondary endpoints which are most important?

A: Jay Olson's question was answered by Howard Robin, mentioning primary endpoint and secondary endpoints like EASI-75, EASI-90, IGA, itch.

Q: Are you able to provide any color on where your baseline EASI could come at and how much is going from 12 to 16 weeks in this Phase 2b versus Phase 1b important for that separation from placebo? And is there expectation for all dose levels, including the 24 mg/kg once every monthly, everything sort of statistically clearing the stat sig?

A: JZ stated they'd like baseline EASI to be between 25-30, increasing the induction period from 12 to 16 weeks is important for separation from placebo, and they expect multiple dose arms to hit significance.

Q: Do you have a sense of what proportion of patients between very severe versus severe subgroups in the alopecia study? And what would your expectation be on the kinetics of response there?

A: JZ mentioned between a third and a half of patients in alopecia areata are very severe, and kinetics of response would be characterized when top-line results are presented in December.

Q: Is it fair to expect that you would wait for the 36-week AD data before pursuing an end of Phase 2 meeting with FDA and preparing to initiate a Phase 3 trial? Or is there potentially motivation to meet with the FDA sooner on the back of this upcoming data and get the ball rolling on Phase 3 that much sooner?

A: Howard Robin stated they don't need to wait for 36-week data and intend to move quickly, connecting with FDA soon after top-line results in June to move into Phase 3 as soon as possible.

Q: For the protocol for atopic dermatitis, do you allow patients to be off the drug but still on the trial? And for the primary endpoint, which imputation method you're using?

A: JZ stated patients can be off drug but still on trial, and imputation methods used are typical of Phase 2 studies, using primary estimate analysis with standard imputation for intercurrent events.