Nektar Therapeutics (NKTR) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Nektar Therapeutics SITC conference call. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Vivian Wu from the IR team.

Thank you, Crystal. Good afternoon, everyone, and thank you for joining us on today's analyst call to review data presented for Nektar's immuno-oncology pipeline at the 2021 Society of Immunotherapy for Cancer meeting. Before we start, I'll remind you that this presentation includes forward-looking statements regarding Nektar's drug candidate, NKTR-255 and other potential drug candidates. Clinical trial results, the timing of the startup and plans for ongoing planned clinical trials with partners, the therapeutic potential of our drug candidates, the timing and outcome of regulatory decisions and future availability of clinical trial data. Because these statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control. Actual results could differ materially, and these statements are subject to important risks and uncertainties set forth in our Form 10-Q that we filed on November 5, 2021, which is available at sec.gov. We undertake no obligation to update any of these statements, whether as a result of new information, future developments or otherwise. A webcast of this call will be available on the IR page at Nektar's website at nektar.com. On our call today are Nektar management team members, Dr. Jonathan Zalevsky, our Head of Research and Development; and Dr. Dimitry Norton, our Chief Medical Officer at Netra Therapeutics. In addition, we are privileged to have today with us to gas speakers, Dr. Mehmet Alton from MD Anderson Cancer Center; and Dr. Alan Tan from the Rush University Medical Center. Dr. Alton is an assistant proposer in the Department of Thoracic Head and Neck Medical Oncology Division of Cancer Medicine at the University of Texas MD Anderson Cancer Center. He is one of the lead investigators in the Phase I/II study of NKTR-255 in combination with cetuximab in patients with solid tumors as well as an author on the data presented today. Dr. Tan is the Director of GU Medical Oncology and Associate Professor in the Division of Hematology Oncology and Cell Therapy at the Rush University Medical Center. He leads the Rush University Precision Oncology Genomics program. So here's our agenda for today. To start off, JZ will provide an overview of NKTR-255 program and preclinical data. You will then cover the data presented this morning and Dimitry will discuss the clinical highlights from the presentation. Then we will turn it back to JZ for a review of the translational research. And finally, we'll ask Dr. Alton and Dr. Tan to provide their reaction to the data presented today. And with that, I will hand the call over to JZ.

Thank you, Vivian. Interleukin-15 or IL-15 is a member of the IL-2 family of cytokines and activation of the IL-15 pathway drives several fundamental immunologic processes. And shown here are a few examples where IL-15 pathway is essential in regulating NK homeostasis, specifically NK cell expansion, differentiation and function as well as the regulation of naive and memory CD8 T cells. When IL-15 drives this biology the IL-15 ligand can interact with its dedicated receptor complex in multiple ways as circulating ligand that binds dimeric or trimeric receptor complex on a single cell, which we call cis-presentation, or through engagement of the trimeric receptor via cell-cell contact, which we call trans-presentation Maintenance of both cis- and trans-signaling is essential for natural IL-15 to drive all of its biological functions. NKTR-255 is an investigational polymer conjugated recombinant human interleukin-15 or RH IL-15 for short. And this agonist can provide sustained pharmacodynamic responses without the need for daily dosing. Our approach in the design and protein engineering of 255 was to leverage our deep expertise in polymer chemistry to change naturally occurring IL-15 into a molecule that retains both cis- and trans-signaling and thus can access the full spectrum of native IL-15 biology. While at the same time, the polymer chemistry through multiple mechanisms, pharmacologically, can greatly improve the PK and PD of NKTR-255 relative to native IL-15. And this generates what we believe is a therapeutic that can faithfully drive NK and CD8 T cell biology. Importantly, our polymer chemistry technology allows us to achieve all of this without the need for amino acid modification or really any other amino acid changes to the IL-15 protein. The elements of the design of 255 namely its ability to retain binding and cell signaling for cis- and trans-receptor complexes and the lack of amino acid substitutions make it highly differentiated compared to the competing IL-15 pipelines. That class of molecules are designed as what we call pre-complex molecules, meaning that the IL-15 protein is prebound to the extracellular region of the IL-15 receptor alpha. And this feature and the design of the competing class of molecules makes them unable to participate in trans-signaling by a cell-cell contact because these molecules are already prebound to IL-15 receptor alpha, and hence, unable to signal by a cell-cell contact. Now as an example of the differentiation between 255 and these pre-complex class of molecules is shown on this slide. And here, we use ex vivo culture of human peripheral blood mononuclear cells or PBMCs, which are a complex cell mixture of primarily nongranular white blood cells, including T cells, B cells and NK cells but also, they include monocytes as well. Now this test system with its range of immune cell populations allows us to demonstrate key differences between different modes of IL-15 pathway agonism. And you can see from the chart that native IL-15 and NKTR-255 both molecules that can engage trans presentation can drive much higher induction of interleukin-18 and granzyme B compared to the leading pre-complex IL-15 molecule in this class. And the figure on the right side of the slide demonstrates our hypothesis that the maintenance of trans-signaling by 255 allows it to maintain natural IL-15 biology and promote better cellular crosstalk between direct IL-15 signaling targets, which is NK cells and CD8 T cells and their indirect counterparts such as IL-18 secreting monocytes. And please keep this property of NKTR-255 in mind. Because later in the presentation, we will discuss the results from our ongoing clinical studies, and we'll return back to both the direct and indirect effects of NKTR-255 on modifying the human immune system to help promote effective immunotherapy for cancer. Now continuing on this theme, we published a JITC earlier this year a paper that captured a deep head-to-head assessment of NKTR-255 versus the pre-complex molecules to assess the level of differentiation. Shown here is a mouse xenograft study from that publication. On the left, you can see that single-agent NKTR-255, the purple line, produced better efficacy than the pre-complex molecule in terms of overall survival shown in panel A, and in terms of tumor cell killing in the mouse bone marrow shown in panel B. And Panel C on the right of the slide demonstrates the underlying basis for the improved efficacy of NKTR-255. We observed that in mouse bone marrow isolates, NKTR-255 provides elevated and sustained levels of NK cells and drives improved NK cell activation and function as measured by the degranulation marker, CD107a, and granzyme B. And keep these markers and measures in mind as well because we'll continually be evaluating these markers in both preclinical and in the clinical setting to come later in the presentation to kind of create a metric for understanding NKTR-255's mechanism of action. Now the biological or pharmacological properties of NKTR-255, make it an ideal agent to modify NK cell biology and drive the direct and indirect immunological processes that stem from NK cell activation. And one such application is shown on this slide, wherein NKTR-255 engagement can generate continuous pool of NK cells as effector cells in combination with tumor-targeted antibodies that function through an antibody-dependent cellular cytotoxicity or an ADCC mechanism. Now this slide shows a simple cartoon of this phenomenon, wherein you can see the tumor targeting antibodies in yellow, binding to the tumor target in gray and when receptor on the NK cells, engage the Fc regions of these antibodies, the NK cells release cytotoxic substances leading to the death of the tumor cell. And this process requires NK activation and a continuous supply of fresh and healthy NK cells to combine with these tumor-targeted antibodies. And hence, this is a very strong application for NKTR-255. So in today's presentation, we will focus on the combination of NKTR-255 with the epidermal growth factor receptor, or EGFR, targeted chimeric antibody cetuximab. Now we wanted to first characterize the effect of the combination of NKTR-255 cetuximab in a whole range of models, both in vitro and in vivo to determine the ADCC enhancement for the combination. And shown here is the design for an in vitro study where we isolate human NK cells shown on the left and treat them with or without NKTR-255 and combine them with 2 different EGFR positive human cell lines, one colorectal and the other head and neck cancer. And after we mix these cells together, we measure cell killing of the antibody-coated cell by the NK cell. This slide shows the results of the in vitro ADCC studies. Now there are numerous controls on each chart to follow the contribution of components for each agent. There's an IgG isotype alone, NKTR-255 alone, cetuximab alone and importantly, the combinations. And I draw your attention to the green arrows, that demonstrate that the greatest enhancement of ADCC-mediated cell killing comes from the combination of NKTR-255 plus cetuximab and is evident in both the colorectal and the head and neck cell lines. We evaluated these same 2 cell lines in 2 different mouse xenograft models to extend these ADCC observations in vivo. Now either colorectal cancer or head and neck cancer cell lines were implanted into mice, and after the tumor is established, we began treatment with the control agents and the combination of NKTR-255 plus cetuximab. You can see that in both models, the combination of 255 plus cetuximab, which is the green line in both charts, substantially separates from the control regimens. And this is especially interesting because while the FaDu, which is the head and neck model, is sensitive to cetuximab single agent, the blue line. The HCT-116 colorectal model is not sensitive to cetuximab as a single agent. Yet both models are sensitive to the combination of the combo of 255 plus cetuximab, demonstrating that the addition of NKTR-255 to cetuximab can provide much better efficacy than either agent alone. And to dive into the underlying mechanistic basis for the efficacy of this combination, we conducted deep mechanistic studies to evaluate the systemic and intratumoral immunological effects after NKTR-255 plus cetuximab treatment in the same mouse tumor models. We observed that the combination of 255 plus cetuximab, which is the green bar in all the panels, drives a logarithmic increase of NK cells into the tumor, drives NK cell proliferation, both the tumor and the peripheral blood and drives NK cell activation in both the blood and tumor as measured by granzyme B, CD16 expression and also down regulation of the inhibitory marker NKG2D. And one very powerful feature of this mechanism of ADCC enhancement is the very broad applicability of the approach and large number of targeted humor therapy antibody combination partners available. And to demonstrate that, this slide shows 4 different ADCC xenograft models, evaluating the combination of NKTR-255 with 3 additional tumor-targeting antibodies. On the left are shown 2 liquid tumor lymphoma tumor models demonstrating that NKTR-255 in combination with either rituximab or daratumumab can enhance the efficacy in both models. On the right side are 2 solid tumor models, showing efficacy of the combination of NKTR-255 with other cetuximab or trastuzumab. And importantly, note that 3 of these 4 models, rituximab, daratumumab and cetuximab are each resistant to single-agent antibody. But in combination with NKTR-255, we see -- in all 3 cases. Overall, these results demonstrate the enhancement of ADCC mechanism by NKTR-255 and the potential broad applicability of this combination. Now to take a brief moment to summarize where we are so far in the presentation. I'd like to point out that NKTR-255 is a highly differentiated, potentially best-in-class IL-15 agonist. It engages the full spectrum of IL-15 biology to drive a complete and functional cellular immune response. And we have seen consistent NK and CD8 T cell expansion as well as NK cell activation. NKTR-255 can effectively engage NK cells and be paired with a wide range of medicines to treat both liquid and solid tumors. It has highly effective combinability with antibodies that function via ADCC mechanisms. And for example, that includes rituximab, daratumumab, trastuzumab, cetuximab and we didn't show it today, but we also have data with elotuzumab as well. And we recently extended this therapeutic opportunity into a collaboration agreement with Merck KGaA to evaluate NKTR-255 in combination with avelumab in the urothelial carcinoma maintenance setting post-chemotherapy. And the foundation of this collaboration is the unique scientific rationale to combine NKTR-255 with avelumab, which is a PD-L1 inhibitor with an ADCC active IgG1 Fc region. And I will touch on that collaboration in more detail later in the presentation. Now I'd like to switch gears away from the preclinical and begin focusing on the clinical data. And this comes from our current presentation of a Phase I/II dose escalation and dose expansion study of NKTR-255 plus cetuximab in patients with relapsed or refractory head and neck cancer and colorectal cancer. Now in the dose escalation portion of the trial, we have successive cohorts of patients being treated with ascending doses of NKTR-255 every 21 days plus cetuximab weekly until we reach the MTD or the recommended dose to go forward. And patients first received a loading dose of cetuximab with 400 mg per meter squared. And we give that 7 days prior to starting the combination dosing with NKTR-255 and cetuximab, again, with 255 on to a 2-, 3-week schedule and cetuximab on that weekly regimen. And here, we report the results from the first 2 dose cohorts and dose escalation is, of course, still ongoing. Now here, we show the study assessments. And in addition to safety and efficacy, which we'll cover. We also evaluated a number of PK and PD measurements, and I'll talk more about our observations on these measurements in a moment. And preliminary data that's being presented today is that as of the data cut of October 13, 2021, which is the information also on the poster that was presented this morning. So firstly, consistent with the mechanism of action of NKTR-255, treatment of patients with the combination of NKTR-255 plus cetuximab resulted in expansion of NK cells as well as an increased proliferative capacity as measured by Ki-67. In the first cycle, NK cell levels peak approximately 1-week post dose. And our data suggests that cell levels continue to increase with successive cycles without teciphylaxis, and we'll touch on this point again later in the presentation. As NK proliferation, which we measured by Ki-67 expression peaked at approximately 72 hours after the start of treatment with NKTR-255 plus cetuximab, we focused on the same time point to evaluate markers of NK cell activation. We observed clear increase in HLA-DR, NKp30, CD107 and granzyme B at both dose levels. And this is a very important finding because it demonstrates that not only this NKTR-255 increase NK cell proliferation in NK cell numbers, but it also controls their activation phenotype, exactly as we observed in our preclinical mouse studies. And further, consistent with the mechanism of action, the treatment also resulted in expansion of CD8-positive T cells as well as an increased proliferative capacity of CD8 T cells as measured by Ki-67. And while we didn't show the data here today, we do want to report that only minimal changes in regulatory T cells were seen after treatment and this is highly consistent with both NKTR-255 and in general, with the IL-15 mechanism of action. And with that, I'd like to turn the call over to Dimitry to review the clinical safety and efficacy data that we saw in this cohort of patients.

Thank you, JZ. At the time of the data cutoff, 4 patients received at least 1 dose of NKTR-255 and cetuximab and an additional 2 patients discontinued following the cetuximab loading dose and did not start combination treatment. And to remind you, the data cutoff was mid-October. As you can see, the study enrolled heavily pretreated patients. The median number of lines of treatment for head and neck cancer patients was 4 and for colorectal cancer patients was 3. The majority of head and neck cancer patients received a prior checkpoint inhibitor as part of their treatment and 4 out of 10 colorectal cancer patients received EDFR targeted therapy and 3 CRC patients received a checkpoint inhibitor as well. NKTR-255 plus cetuximab was well-tolerated at the initial doses studied. One patient treated with NKTR-255 at the 3-milligram per kilogram dose level experienced an infusion-related reaction with hypoxia, and this was considered to be a dose-limiting toxicity. However, the rest of the cohort cleared the DLT observation without issues, so the DLT did not lead to defining of the MTD and dose escalation is ongoing. And no deaths or Grade 4 related to AEs were reported on the trial as well. In the pharmacodynamic assessment, we observed, as expected, on mechanism transient of regulation of inflammatory cytokines following administration of NKTR-255. And as you can see, the levels rapidly decline after 24 to 48 hours, which is also consistent with the safety profile. In the pharmacokinetic analysis for patients at the 1.5 microgram cohort, we show that the extended half-life of NKTR-255 is about 28 hours, and this is consistent with what we have seen in the liquid tumor setting with monotherapy of NKTR-255 and it's approximately tenfold longer than recombinant IL-15, sorry. This increase in half-life is an intended effect of the engineering of IL-15, and we are pleased to see that PK profile is consistent between liquid and solid tumors. And lastly, to note, there was minimal accumulation noted with repeat dosing. NKTR-255 plus cetuximab also showed evidence of preliminary efficacy in the dose-finding cohorts we described so far. We have a total of 6 CRC patients and 3 head and neck cancer patients who are efficacy evaluable with at least 1 post-baseline scan. You can see, as noted on the chart that 8 out of 9 patients had received previously EGFR targeted therapy or a checkpoint inhibitor and 1 patient received both. 5 of the patients all previously treated with EGFR targeted therapy or checkpoint inhibitors experienced stable disease as best overall response. And 4 out of these 5 patients are still on treatment, indicating -- indicated by the green dots on the slide. And also, some of these patients only had the first on-treatment assessment as part of the data -- time of the data cut off, so we are following these patients when they continue on treatment. One patient with head and neck cancer and 4 prior lines of treatment experience stable disease with a reduction in tumor burden and this patient has been on therapy for 28 weeks at the time of the data cutoff and 1 patient with colorectal cancer and 4 prior lines of treatment, including a checkpoint inhibitor experienced a confirmed partial response on study with a more than 50% tumor volume reduction, which occurred at the time of the second scan. This patient was on therapy for 35 weeks at time of data cutoff, also showing a meaningfully long duration for this patient. And also of note, this colorectal cancer patients had a heavy tumor burden at baseline with almost 200 millimeters as some of diameters for the baseline target lesions as defined by RECIST. In the next slide, we're showing a little bit more detail about this patient in a patient yet. So as I mentioned, it's a colorectal cancer patient with over 50% tumor burden reduction. The patient had 4 prior lines of treatment, including FOLFOX Avastin combined with OPDIVO. The second line treatment was FOLFIRI with Aflibercept, followed by Regorafenib in the third line and then non-serve as last treatment in the fourth line. And of note is that the best overall response on non-serve was progressive disease before the patient came on to study for the 255 cetuximab combination. And as I noted, there's a high tumor burden at baseline with 200 millimeters as some of largest diameters. And the slide shows the responses in the target lesions, 2 liver lesions and on pelvic lesion. I will now turn it back to JZ to review translational data of our trial and also very exciting tumor biopsy data on the patient that's part of the [ vignette ].

Thank you, Dimitry. So we wanted to identify early correlations of clinical activity with the translational biomarkers that we incorporated into the trial. And shown here is an early correlation identified in these ongoing studies. We looked at the increase in peripheral blood NK cell or CD8 T cell elevations and correlated the cell levels in patients that had clinical benefit, which we define as either having stable disease, SD, or partial response PR or as progressive disease, PD. We observed a very interesting correlation in that patients with clinical benefit showed elevated NK cell levels, which are the blue dash lines on the left-hand chart, and that this was seen across multiple treatment cycles. In contrast, CD8 T cell levels did not correlate with clinical benefit or progressive disease. While this is early and a fascinating correlation, we're very excited about it because it's very consistent with the ADCC mechanism of action that we've been discussing today. And likewise, we observed that patients with clinical benefit also had elevated levels of NK cells expressing multiple activation markers. We observed elevated levels of HLA-DR, NKp30, CD107 and granzyme B positive NK cells in patients with clinical benefit. While again, an early observation, this finding is also consistent with the mechanism of action that we've been discussing today as well. And we also wish to extend our observations of peripheral blood pharmacodynamics and understand those relationships and characterization to what is happening locally in the tumor. And one advantage of this study is it's a solid tumor study. And so we can collect serial biopsies and assess the effect of the NKTR-255 plus cetuximab combination directly in the local tumor microenvironment. And since this is an ongoing study, to date, we have collected matched tumor biopsies from 7 patients and today have results available for the first 3 patients. One patient with a PR, partial response, 1 patient with stable disease SD and 1 patient with progressive disease. The results for NK infiltration are shown in this panel, and there is an interesting correlation that is evident in these first 3 patients. The 2 patients with clinical benefit both had elevation of NK cells between baseline and the on-treatment biopsy specimens, while the patient with progressive disease did not. Now we look forward to continuing to develop our scientific understanding of these findings as we collect and analyze data from more subjects in the coming months. Now a few minutes ago, earlier in the presentation, Dimitry presented this case study for the late-line patient with colorectal cancer that demonstrated a partial response to treatment with NKTR-255 plus cetuximab. So we wanted to dive down into the translational biomarker results in the specimens collected from this patient to evaluate the immune-based correlates and underlying mechanistic changes that may be associated with this patient's response to therapy. When we evaluated the peripheral blood expansion of NK cells and CD8 T cells, we observed the continued elevation of both cell populations over multiple cycles of therapy. Now this is a very important observation because it demonstrates that cellular changes are consistent, continuous and the cell levels accumulate with successive treatment cycles without tachyphylaxis. It also indicates that elevation in peripheral blood cell populations. For example, the full change relative to baseline is really dependent on time and total number of treatment cycles. Therefore, cell elevations observed after just a single cycle quite likely underestimate the true degree of cell elevations that can be observed after multiple treatment cycles. And the key being that the treatment continues to work without exhausting itself or burning out the immune system. Now since we had matching tumor biopsy specimens for this patient, we thought it would be instructive to evaluate the immunofluorescence images we collected and further identify intratumoral correlates of response. As shown here, our tumor biopsy sections staying with DAPI to identify cellular DNA and PanCK as an epithelial cell marker to denote the tumor. These 2 samples were collected from a liver lesion at baseline on the left and at cycle 3 day 8 after 3 cycles of NKTR-255 plus cetuximab treatment on the right. And these 2 images, as you can see, are strikingly different. On the left, we see a large mass of epithelial tumor denoted by a large area of PanCK orange-colored staining and diffused DAPI staining, together indicating the presence of a substantial mass of epithelial tumor. After 3 cycles of NKTR-255 plus cetuximab, we see a huge reduction in the amount of PanCK staining. In fact, by cell counts, there is an approximately tenfold drop in tumor cell staining between the 2 time points. And the reduction in tumor cells is quite marked between these 2 time points and it correlates very nicely with the minus 37.5% tumor shrinkage results obtained by CT of this patient at the same week 9 time point. Now in addition, at cycle 3, day 8, we now see an increase in a very different kind of DAPI staining. Note that there are now many more DAPI staining nuclei, the small blue dots and that these are highly condensed and thus, the brighter, much more bright and DAPI staining intensity. And in fact, this kind of a standing result is indicative of a massive surge of immune cell infiltrates. And with this imaging technique, we can actually drill down to these additional cell subsets. So shown here is the same section, but now we also add stains for 2 additional markers. CD56 in cells and also CD8 in Magenta to identify CD8 T cells. And starting with T cells. This expanded field view shows the large increase in Magenta dots between the 2 time points, indicating a huge influx in CD8 T cells after 3 cycles of treatment with NKTR-255 plus cetuximab. In fact, many of the DAPI staning cell nuclei are actually CD8 T cells. And at these time points, the CD8 T cell levels increased about 80 fold over baseline. For NK cells, we observed an approximately threefold increase over the 2 time points. and we were especially intrigued by the structural pattern of NK cell staining. Now as you look across this section, you can see that NK cell staining in green has a high degree of co-localization to the tumor tissue remnants that are remaining in this C3 D8 biopsy sample. And so to further illustrate this point, let's focus on the area in the red box. Now this slide shows the zoomed-in image of the region in the red box from the previous slide. In this image, we can see clear colocalization of CD56 NK cells, clustering staining inside the regions of PanCK staining for the 4 epithelial tumor remnants shown in this field of view. And while these are very early results, we are nonetheless very excited by this observation because the relationship of the high degree of co-localization of NK cells of the tumor cells is highly consistent with an ADCC mechanism of action. I remember that earlier in the presentation, we spoke about the importance of preserving cis- and trans-signaling because this provides NKTR-255 access to the full spectrum of IL-15 biology via direct and indirect effects on the immune system. And we demonstrated this by showing generation of monocyte-derived IL-18 in human PBMC cultures. So to extend these observations clinically, we also evaluated the same tumor biopsy specimens for elevation in CD68 macrophages, which are again shown in magenta in these images. Now we observed an approximately sevenfold increase in macrophage staining intensity, not the magenta dots. And importantly, these macrophages seen in the C3D8 image appear to be now occupying the space where the tumor used to be. Now this effect is also very exciting to us. because we know that the NKTR-255 plus cetuximab mechanism can drive indirect effect onto other tissue phagocytes such as macrophages and that can participate in another effector process known as antibody-dependent cellular phagocytosis or ADCP, that alongside ADCC is an effective mechanism that can also clear antibody-coated tumor cells. Now before opening the presentation for discussion, I wanted to briefly touch on the ongoing development program for NKTR-255. Now we recently in the collaboration between Nektar and Merck KGaA to evaluate the combination of 255 plus avelumab versus avelumab alone post chemotherapy in patients with urothelial carcinoma. Merck KGaA will conduct this trial, and we are very excited to see it get started in the early part of next year. We have an ongoing study in [indiscernible] that we previously presented early results for at SITC last year. And we are very excited to give a further update on this trial at ASH next month and especially excited to Dr. Alan Tan, an investigator in that trial is joining us for our conference today. Now this team study is ongoing in the dose escalation phase and we look forward to soon advance that trial to evaluate multiple cohorts of NKTR-255 in combination with rituximab and DARZALEX FASPRO as well as in the monotherapy setting. And finally, the trial in today's presentation is focused on solid tumors and the combination of NKTR-255 plus cetuximab. As we've discussed today, the study is ongoing in the dose escalation phase. And once we identify the go-forward dose, we'll move into dedicated expansion cohorts of colorectal cancer and head and neck cancer patients. And with that, I would -- I'm going to ask Dr. Tan and Dr. Alton to comment on the data here that we've presented. And I'd like to first ask Mehmet as he was the presenting author in the SITC poster this morning. Mehmet?

Thank you. Good afternoon. My name is Mehmet Alton. I'm a Thoracic Head and Neck Medical on also the primary investigator of this multi-central Phase Ib study at MD Anderson Cancer Center. As a site PI, I had the firsthand experience about the patient experience in this trial for the 2 dose cohorts. And also, I am attending weekly investigator calls over the last year. It's exciting to share our experience from these 2 dosing course and what we learned so far. So the things that I would like to point out includes as it's been presented the first 2 dosing cohorts shows quite well-tolerance and a good safety profile. We had early signs of clinical activity. But more encouraging findings are the translational research that have been complementing the study. And in my opinion, that's why this study selected as a late breaking abstract in this year annual SITC meeting. So the preclinical data, early clinical data suggest certain activities of IL-15 previously. But with this study, we are really showing observations that are strongly correlating with all these preclinical findings. In peripheral blood, we see NK cell expansion, NK cell proliferation and increased number of NK cells with activation phenotype in the blood. We also see expansion of CD8 positive T cells in the peripheral blood. The prolonged half-life consistent with the [ HEM ] and solid tumor applications for the investigational therapy. Also from the limited tissue biopsy analysis that shows influx of NK and CD8-positive T cells to the tumor microenvironment and possible correlation with clinical and radiological responses, which is all supporting the preclinical data that we know from IL-2 and the previous studies that we had with NKTR-255. So I'll be very happy to take any questions after the comments from my colleague, Dr. Alan Tan. Thank you.

Thanks, Dr. Alton. Excellent presentation, Jonathan and Dimitry. Thanks for having me here. I'm Alan Tan. GU medical oncologist also specializing in melanoma as well at Rush University Medical Center. So years ago, I had dosed the first 2 patients in the first in-human studies for NKTR-255 in heavily pretreated multiple myeloma and also non-Hodgkin's lymphoma. And at that time, we saw some compelling biologic activity and also clinical benefit as a single agent. So given that there was a hope that there would be a similar story that would be translated into solid tumor space. So although these findings are preliminary. And it's a relatively small sample size in a Phase Ib dose escalation and dose expansion study, which we now have data on 3 micrograms per kilogram. And now currently, I believe we're enrolling at 4.5 mgs per kilo. This is a heavily pretreated refractory population that has already seen either all standard of care treatment options, such as anti-EGFR therapy and checkpoint inhibitors. We're seeing a sneak preview now of some encouraging activity, most impressively in the patient that was highlighted by Jonathan, a patient with metastatic colorectal cancer on fifth-line treatment after existing all standard of care treatment options, also with high tumor burden, I remind you. This patient -- most patients really don't get to fifth line, first of all. So this is a really interesting case. But biomarker-wise negative, microsatellite stable and also had received anti-PD-1 therapy and was refractory to that in the first-line setting, which is really not even the standard of care in the patient was on a clinical trial. But patients in fifth-line setting have curbed partial response with more than 51% reduction in target lesions. Once again, as Dimitry, Jonathan patient had over 200 millimeters of baseline RECIST measurements. So typically, outside of a clinical trial that's setting is a high unmet need. This patient would have no other real standard of care treatment options remaining, and most would probably recommend hospice. However, this patient remains alive today, well on the study past 35 weeks with good quality of life and potentially with further follow-up, continued response. The other 5 patients that have clinical benefit can be interesting as well although not the same depth of response yet, many of those patients are early on in their treatment ranging from 9 to 11 weeks. And as we know, with immuno-oncology, responses may take time and develop over time. So while it's also promising that we see expansion and proliferation of NK cells and CD8 cells in the peripheral blood. We -- even more intriguing in my opinion, is the compelling activity see with the translational information that we got in the tumor microenvironment from the biopsies from several patients, most notably in the responders. We see activity of infiltration of several inflammatory markers, such as NK cells, macrophages, CD8 cells. So this is evidence that the proof of concept is actually being seen with market reduction of epithelial markers, which signal tumor responses. We also see that 255 in combination with cetuximab also induced transient upregulation of inflammatory cytokines by 24 or 48 hours, and they rapidly decline. This actually speaks to our experience in the clinical setting where the patients have a mild transient symptoms of rigors, chills, et cetera, but these are not really long lasting. So I think that correlates with the transient decline as we saw the cytokines. And also with each cycle of 255, we also see continued and perhaps cumulative expansion of NK cells and CD8 cells. So I think that's really important to note that we don't really have a drop off. We have cumulative expansion of these cells, which is important one is driving for durability of responses as well. So once again, this is still early, premature data, but I think highly encouraging activity. that offers a proof of concept that NKTR-255 can be combined safely and efficaciously with other monoclonal antibodies that utilize the ADCC mechanism. This has already been demonstrated in he malignancies such as myeloma and lymphoma in combination with rituximab, daratumumab and elotuzumab. And as a specialist that specializes in genitourinary cancers such as bladder cancer, I'm really excited about the collaboration between Nektar and Merck KGaA to initiate the javelin bladder medley, which is an intriguing and exciting concept. In my opinion, because in these patients, we're usually using chemotherapy first, the down stage of the cancer and then we're using abalumab as maintenance. But avelumab is currently the standard of option -- standard of care option in a maintenance setting, but it's also a differentiated PD-L1 inhibitor that distinguishes itself from something like nivolumab or pembrolizumab, which has a dual mechanism which is also participating in ADCC. So I think this combination can perhaps open the gate to further strategies in multiple tumor types that utilize IL combinations and also ADCC antibodies and perhaps even reinvigorate activity to patients who previously benefited from some of these target agents such as cetuximab or trastuzumab. So I also think the convenience to of the every 3-week dosing differentiates itself from other IL-15 competitors as an attractive option to combine with other targeted agents. So I'll stop there, and we'll open up for questions.

Now we open up the presentation discussion for questions today. Please feel free to ask questions of any of the panelists, and we'll be happy to begin with any of the questions from any of the audience located here in the room first. Daina?

I wonder if you could tell us more on the CRC -- sorry, for people on the phone. This is Daina Graybosch from SVB Leerink. On the EGFR signaling status, the patient responded, were they KRAS mutant. I just wondering why they hadn't been treated with cetuximab previously?

Dimitry?

I can start. So indeed, we -- for the dose escalation part of the study, we did not mandate patients to be KRAS wild type. This particular patient was caves well type for the dose expansion portion, we will be limiting ourselves to KRAS wild-type patients. Obviously, that's always a question. Do you know what the contribution is? We have a number of things to say about that, of course. First of all, we are going to add a monotherapy or a couple of monotherapy cohorts to the trial to, let's say, characterize the contribution of components and also the, let's say, the PK and PD profile. Cetuximab has approximately an expected response rate of 10% based on relatively dated registrational trials published in 2004 and 2007, and therefore, enrolled the years before, even before will say, wide uptake of Avastin before the availability of the Fed trip before the availability of lonsurf, regrifenib. So we are aware of those benchmarks. We do think right now, it's harder to say something, and our patient population is very different and far more heavily pretreated than we -- what we would expect from, let's say, patients in the registrational trials.

Greg.

Greg Harrison from Bank of America. I wanted to get your thoughts on the dose dependency of the responses as well as biomarkers? And is it reasonable to expect that we could see additional gains made when you go into the higher dose?

Sure. I can take that. So yes, it's a great question, Greg. I think that one of the things that our data is telling us that when we look at proximal time points relative to dose such as the first cycle, it does look like we're nearing a level of probably maximum target engagement or nearing some kind of biological process. And so looking at cycle 1, while we'll see PK elevations, some of the biomarkers see kind of flat. But then you noticed the patient where we had extended treatment cycles. And you saw those same cell populations continue to escalate with time. And so what we believe we need to do is actually to collect more data across even more cycles because I think that for this mechanism and this is probably the style of target engagement, it's not just a combination of dose but also the duration right? And then the pulsatility of the treatment cycles that all will contribute together. So we're continuing to dose escalate and continuing to collect that data.

This is Andy Hsieh, William Blair. So to the panelists, I'm hoping that you can share with us maybe some of the strategies that you use to assess early-stage clinical programs, things that you look for that would generate some excitement and then use those parameters to kind of map what you've seen with NKTR-255 so far? So that's kind of my first question. Second question is maybe to JZ. Just curious about the half-life about a little bit longer than one day. And then by day 7, you probably see 99% of turnover. Just curious about from a clinical standpoint, what can you do or what is it doing it 255 doing in those 2-week period where there's very minimal 255 until the next dose?

Sure. Maybe I'll take the second question first, and then we'll ask Alan and Mehmet to comment on the first part, Andy, because the second part is a little quicker. And so basically -- yes, so you saw this the PK profile that Dimitry presented. It's approximately a 28-hour half-life that we observe. And so this drug has very similar kind of PK/PD properties. So what with BEMPEG, where we see a duration of exposure that covers a portion of the treatment cycle, but we see a pharmacodynamic response that lasts for weeks after that single dose. And in fact, one of the reasons we believe we don't have things like tacaphylaxis, and we continue to see that kind of responses that if you actually oversaturate this target, we know that you can obtain hyporesponsiveness, right? And that's been seen with some of the NCI studies as well that this is a target that is primarily cleared through TMD or target-mediated disposition. And so kind of how you occupy it and for how long during a cycle is really important for it to not desensitize. And so in this dosing regimen, even though there is what you call a holiday for a couple of weeks in the pharmacology sense. That doesn't blunt the pharmacodynamics, which is the most important thing. Yes. So thanks for the question. And maybe I'll turn it over. Mehmet, would you like to begin?

Sure. So as a physician who is working in head and neck tumors, the treatment paradigm has been substantially changed over the last 5, 6 years. But despite all the novel combinations or single agents, the response rates, duration of response have been disappointing. There has been tremendous improvement, but we are not close to where we would like to be. So when I look at early stage drug development, I would like to see if it may be one of the missing feeds between innate and adaptive immune system. The second thing is, are there any significant overlapping toxicities that may not allow you to combine. And the other thing is we have a lot of preclinical data. And when a drug hits the Phase I studies, sometimes those emitting taxes have been very discouraging. So this is why I think it's exciting. This very limited data is kind of checking those boxes. So that is what I can say.

I'll add Rick further on that, too. Right now, we're including all comers in these cohorts. So we're not really preselecting for these patients are wild-type, et cetera. But I think as we expand and reach our maximum tolerated dose and go to the randomized Phase II, I think we'll see further differentiation here. And more translational data, I think, too, from biopsies, et cetera. And from that, then I think this could be studied -- if there's a compelling signal in the randomized Phase II and perhaps go to Phase III or perhaps earlier in frontline setting or second-line setting and other malignancies as well.

Arlinda Lee from Canaccord. I had maybe a couple. One, you talked about the NK cells increasing over time in that nation. Are you also seeing -- are you expecting to see deepening of response over time? And then maybe secondarily, you talked about the bulk murky nature of that business. I'm curious what do you think would be the best utility for these combinations are going with or disease that is it more tolerable, you can treat longer and it takes a while to get under control? Or just kind of mechanistically, can you talk about that? And then maybe for the 2 clinicians. Curious about what your thoughts are on where the best utility for this kind of combination in 5 years from now?

Thank you, Arlinda. So there were 3 questions. I think we'll parse them out. So you had a question about NK cells with time and deepening response seen to that. Dimitry, maybe you can comment on bulky disease at the baseline. Then I'll turn it over to Alan and Mehmet for the applicant setting. And so firstly, the NK cells as a function of time and cycle, it's not the first time that we've seen this in that case study. in fact in our ongoing heme study, where we have substantially more patients that have seen even more dose levels, we see the same phenomenon that as the patients take additional cycles, they continue to see elevations and the NK cell levels actually accumulate over time with successive cycles. Then the question is, can that lead to a deepening of response? What that really is our hypothesis. Right here, we're looking at one patient and the patient had a deepening of response can we'd obviously need substantially more patients to really certify that even in our own mind, but right now, what we're seeing shares a level of similarity with BEMPEG, where we see these continuous cycles of lymphocyte activation time. And over a cycle, there's no blunting of that and then patients stay on drug longer, and they continue to have further and further tumor reductions. I think there's a very good likelihood that we'll see the same kind of effect here. as more patients are treated with the combination. So look forward to in the future, say, next year as we have even more patients from these cohorts or the expansion to report that in more detail. And then Dimitry, the...

I'll answer the bulky disease question, but I'd like to say a few more words because JZ showed the very elegant biopsy data and something -- I mean, of course, it's one patient, we're very well-aware, but you do see say, not only the pharmacodynamic effects from the immune system in the biopsy, but you also see a lot of things that are still taking up volume might be an immune infiltrate. So you might even see the tumor killing early on and then the deepening of response that follows on a CT scan with a second and third scan, you might see the clearance out of tumor cells and something slowing down. So I think that's very interesting to see. And obviously, we'll be looking at that for more patients as well. When it comes to bulky disease, I think it's incredibly encouraging. Bulky disease patients have a number of things. I mean, the actual bulk of disease takes up a lot of metabolism I mean patients will just have typically a poor performance status and it's harder, let's say, for the body to take that much cancer specifically for immune regimens, I think it's not always the case that they can mount the response fast, it might take time for that response. So it's not just about the bulk. It's also about the speed of clinical progression before I don't think we'll be right now making decisions on this. I think it's very encouraging that we can get control of such a bulky disease patient. But we'll be, let's say, looking at more data to see if there's something different about lower disease or a higher disease burden. And generally, I think if you look more at the mostly checkpoint inhibitor field so far, I think the earlier trials are in earlier lines, they tend to be more successful because they probably can mount that response in a lower volume setting and patients have more time to actually benefit from the immune response. So I think that's another reason why I'm very encouraged about this data. But too early to say we would focus on this particular subset of patients.

Do you want to make?

Alan, would you like to...

I can comment. So very good questions. I think right now, probably the first place it will be in the relapsed refractory setting that in heavily pretreated patients. But I also wonder for patients that may benefit from a targeted ADCC drug such as cetuximab or herceptin or something like that. And where you see modest progression maybe adding NKTR-255 at the first signs of biochemical progression may be the right avenue to go to, so the patient could actually build some NK cells to contribute that response. And as someone that treats geo cancer and melanoma, I think, once again, reiterating the collaboration with Merck KGaA and avelumab. It's a dual mechanism looking it differentiates itself from nivolumab and pembrolizumab because it does have ADCC. And so we're excited to try this combination with 255 to see if we a better signal. And in that case, then I think you can extrapolate a lot of potential options in bladder cancer kidney cancer. And with the tolerability of this agent, I think it's a compelling option for adjuvant therapy in either melanoma or kidney cancer or bladder cancer.

I can add few words as well. So when you say 3, 5 years ahead of time, in an ideal world, what we would like to see and what we hope to see none of lapping to these drugs that can front lines in both solid and hematologic tumors. Of course, the ADCC activity is very exciting, particularly for liquid cancers. But also for any disease that you have an antibody that has been already FDA approved or in the pipeline. But in an ideal world, where also you would like to move it again in earlier stages because technically, what we know about IL-15 because it is generating the CD8 positive T cell clone that is a memory, probably earlier stages will be also a very exciting patient population. For years and years, we know radiation have some immunomodulatory properties, but we don't have a good replacement for cisplatin where you can get more in locally advanced disease. So I think in an ideal world in 3 years, 5 years in a drug that is tolerable and doing what I expect to do, you may think about moving more earlier stages of metastatic disease, even locally advanced or in adjuvant use. So that is an ideal setting that you would like to reach.

One more comment about this being used to prolonged responses. We are looking at this in hemolysis to prolong the benefit of CAR T cell. So using that concept, perhaps this can prolong the benefit of targeted agents as well.

Thank you very much. I think the next question comes from the dial-in.

[Operator Instructions] Our first question comes from Chris Shibutani from Goldman Sachs.

Thank you for the presentation of the data. Curious as you move forward to expansions in these indications initially, as you look to make the population a little more homogenous what you're studying. Are you planning on looking specifically in like a post-PGFR setting or pre-EGFR setting? What's the initial goal in terms of looking to resensitize patients or demonstrate better activity upfront?

Yes. Thank you for the question. I think from a meniscal perspective, as I said, we're trying to, at the same time, the contribution of components. So that will be built into the trial. And with that, I think looking at patients who have not had EGFR target therapy before, I think there would be more interest where the agent can do its work, like it shoot as a monotherapy and then enhance the efficacy. So that would be the focus moving forward.

And the next question comes from Jessica Fye from JPMorgan.

Maybe following up on Daina's question, did you see any association between clinical benefit and EGFR expression in this initial work, if one of the benefits of 255 is to enhance the ADCC effect of the EGFR targeting antibody? Second, can you walk through the hypoxic event in more detail? What happened with that patient? Maybe talk about how tolerability is looking in the 4.5 microgram cohort and do you expect to see more benefit as you dose up? And lastly, do you think you have enough patients and follow-up here to establish that 255 is not associated with tachyphylaxis?

Yes. So a little bit more about the correlation between EGFR, either EGFR staining by immunoster chemistry or KRAS-mutation status. So far, we can say there's a correlation, but obviously, it's not that many patients yet. We had one CBS mutant patient. We had a number of KS-well-type patients. And so for a patient, it's too early to say. A little bit more detail about the dose limiting toxicity. So the patient experienced a infusion-related reaction and then at hypoxia levels going down to what was about 87% [indiscernible] and was given standard treatment for an infusion-related reaction, including dexamethasone. The patient was given supplemental oxygen, but did not need to be intubated was observed overnight but discharged the next day and everything cleared out in 24 hours -- within 24 hours.

And Jess, to your question about tachyphylaxis. So we've had a chance to look at the ongoing pharmacodynamic effect across both of the trials that we're running with NKTR-255. So that includes the Heme study 02 as well as the solid tumor study 03. And importantly, even in the heme study, we have patients with multiple myeloma. And a lot of them have complete bone marrow -- well, their bone marrow is heavily compromised. So we have a lot of patients that even have a limited lymphocyte output due to their disease. But we continue to see ongoing pharmacodynamic responses even with ongoing treatment cycles. So right now, the data accumulating Obviously, as we have a larger and larger denominator, we can even strengthen our assessment. But the early data that we've looked at across both studies indicates that you can continuously give 255 and the immune effect doesn't seem to dissipate with time.

And then just -- you also asked about the potential tolerability moving forward to the higher dose level? So the 4.5 cohort for this study is enrolling. So that's early -- too early to say. The other 6 patients at the 3-microgram dose level did not have any significant issues. We have, of course, looked for potential correlation with the cytokines. And for the patient with the DLT, we did not get all time points because, obviously, safety measurements and treating the patient is more important than getting the experimental time point. So we don't have a complete profile. And then lastly, we'll be presenting more data at ASH for higher dose levels in our liquid tumor travel, so the data is coming soon.

Our next question comes from Ben Burnett from Stifel.

This is Neil Carnahan on for Ben. The DAPI staining image, as you showed, had really good infiltration on immune cells. I guess our question being, what do you think is holding back is the tumor microenvironment, planting activity or causing exhaustion, just curious what your thoughts are here? And if this maybe supports combining 255 with a checkpoint inhibitor?

Yes, sure. Great question, Neil. So first of all, I mean that is the patient that, of course, is having a response, right? So that DAPI infiltrate and then the change from the de-condensed nuclei that you see in those large epithelial cell tumors, to the highly condensed lymphocytes that have a much more highly packaged nucleus, right? It shows you that kind of difference. Now as we showed that the dots, those blue dots, they're actually different immune cell populations. So if you look closely at the different micrographs, there are different spots that are CD68-positive and then are CD8 positive. So there are additional immune cells in there as well. That tumor microenvironment overall becomes very, very hot, right, as you could tell from those micrographs. And as you compare the baseline image where there's essentially no immune cell infiltrate. And the cells that you see, they're really on the outside of the tumor. They're not in the inside of that section. So what we think happened here is really highly consistent with the kind of immune response that we're hoping to see, and that kind of heating up of the tumor environment and creating that inflammatory kind of milieu that we'd like to see. And the reason why we reported the results on the actual disappearance of tumor cells relative to the CT scan is also highlighting the point that Dimitry made earlier. So in the CT scan, you're picking up contrast in the area that you're imaging. But if you're full of immune cell, even though the tumor might be substantially reduced, you'll still see a level of contrast. At that week 9 time point in that patient, we saw about a tenfold reduction in tumor cell staining, but we only saw about a 37.5% reduction in CT. So with time, as Dimitry said, that deepening of response can actually come from those immune cells basically completing all of their inflammatory responses, the phagocytes competing in golfing, all the remaining tissue and clearing all the debris and then the whole kind of locus dying down with deeper and deeper shrinkages. So all things are directionally exactly as we were hoping to see based on the preclinical data, and we're very excited that we have more patients with biopsy samples that we'll be analyzing to continue to strengthen these observations.

And I am showing no further questions from the phone lines. And I'd like to turn the conference back over to Vivian Wu for any closing remarks.

Thank you, Crystal. Thank you very much for joining us today. Have a wonderful afternoon.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.