Nektar Therapeutics (NKTR) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Nektar Therapeutics Analyst and Investor Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Vivian Wu. Please go ahead.

Thank you, Crystal, and good afternoon, everyone. With us on the call are Howard Robin, our President and CEO; Jill Thomsen, our CFO; Dr. Jonathan Zalevsky, our Chief Research and Development Officer; Dr. Brian Kotzin, our Chief Medical Officer; and Mary Tagliaferri, our Chief Development Drug Officer. On today's call, we expect to make forward-looking statements regarding our business, including clinical trial enrollments and clinical trial results, timing and plans for future clinical trials, timing and plans for future clinical data presentations, the therapeutic potential of our drug candidates, outcomes and plans for health, authority regulatory actions and decisions, financial guidance and certain other statements regarding the future of our business. Because forward-looking 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. Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our Form 10-K that was filed on November 4, 2022, which is available at sec.gov. We undertake no obligation to update any of these forward-looking statements, whether as a result of new information, future developments or otherwise. A webcast of this call will be available on the IR page of Nektar's website at nektar.com. Please note that you will be able to advance the slides on the webcast today as the call proceeds. With that said, we would like to hand the call over to our President and CEO, Howard Robin. Howard?

Thank you, Vivian, and good afternoon, everyone. Thank you for joining us to discuss the press release that we issued this afternoon on the top line data for REZPEG Phase II study conducted by our partner, Eli Lilly, in patients with lupus. JZ will review more detailed data from the study in a moment. And although the primary endpoint was not met, the study did show that REZPEG demonstrated clinically meaningful activity as compared to placebo, including for the primary endpoint metric of SLEDAI. Importantly, we saw meaningful activity for all of the secondary clinical endpoints that were measured in the study, which included key endpoints that are used to measure disease activity in lupus patients. Most notably, the results for the very important secondary BICLA endpoint from this study were impressive and comparable to the results for the BICLA endpoints that supported the 2021 approval for Saphnelo in lupus. Lupus has historically been a challenging area for development because of the use of differing composite endpoints and including a wide range of factors in a variable patient population. Because of this, there are agents that did not meet primary endpoints in Phase II that actually advance to Phase III. And for example, Benlysta did not meet their endpoints in Phase II, but did advance to multiple Phase IIIs, and then was approved in 2011. Benlysta then became the standard of care and was the only approved agent for 10 years. Recently, Dapi Pegol did not meet its primary endpoint in Phase II and was advanced into Phase III studies. Saphnelo also faced challenges in their development. The first Phase III study of Saphnelo was unsuccessful, and after it was unblinded, the primary endpoint was changed to BICLA in the second Phase III study. Ultimately, the agent was approved on data from 2 Phase III studies, with successful BICLA outcomes and differing activity on the SRI-4 outcomes between the studies. I think the most important takeaway from this Phase II study is that REZPEG, as a single agent, clearly showed clinical activity and is difficult to treat patient population across many measurements. This is quite unique in lupus. Before JZ reviews the actual data detail, as you saw in the press release, Lilly has already informed us they do not plan to move REZPEG into Phase III in lupus. We believe the data supporting advancing into Phase III, and our belief is based upon the totality of the data, contemporary regulatory approvals and the current developments in this field. Lilly told us that their decision on advancement to Phase III in lupus is based upon their need for the study to have reached very high bars in this Phase II study for both SRI-4 and for BICLA in the modified intent-to-treat population. While the study did achieve the high bar for BICLA, it did not for SRI-4. The short of it is that we're extremely disappointed in Lilly's decision. Lilly has informed us they are now evaluating moving forward in atopic dermatitis in other indications in the context of the data from this study. They've also told us that each disease state being studied evaluates different clinical hypotheses. REZPEG has shown promising efficacy in a Phase Ib study as a single agent in atopic dermatitis, including a long durability of effect in patients. We also now have good evidence of clinical activity for REZPEG as a single agent from the lupus study. We strongly believe that REZPEG should be advanced quickly in atopic dermatitis and potentially other indications. If Lilly chooses not to move forward, we'd be very happy to take ownership of REZPEG back from Lilly. In my experience, this program could be very interesting to other companies focused on the area of immunology. In 2021, biologic sales for atopic dermatitis were close to $5 billion, and sales continue to grow. We believe that based up on the growth of biologic usage in atopic dermatitis, REZPEG, as a novel Treg mechanism, could provide benefit in multiple patient populations, including biologic experienced patients. We ended 2022 with cash and investments of $505 million as compared to our prior guidance of ending 2022 with $440 million to $450 million of cash and investments. We remain committed to ensuring that our existing cash provides Nektar with a runway sufficient to advance our current pipeline to value-enhancing milestones for the next several years through at least the middle of 2025. As you know, Nektar was entitled to Phase III milestones associated with the lupus study over the next couple of years. Consequently, we plan to make additional changes at Nektar to significantly reduce operating costs. While this is a tough decision and very disappointing, it is absolutely the right 1 to make at this time, and we will be moving forward quickly with these changes in the next several weeks. And with that, I'll ask JZ to review the Phase II data in more detail. JZ?

If you could please advance to Slide 3. Thank you, Howard. As Vivian mentioned earlier, and I'd like to just remind everyone, our Chief Medical Officer, Dr. Brian Kotzin, is on the call today. However, Brian is under the weather. And as such, I will be making the data presentation today, and Brian will be available and answer questions in the Q&A session. So I'd first like to review the study design for the Phase II study of REZPEG in lupus. 291 patients were randomized to 1 of 3 dose levels of REZPEG versus placebo and received 24 weeks of treatment. Patients also had to have active lupus that was not adequately treated by standard of care. They had to have serologically positive disease as well as active arthritis and/or rash to be eligible for the study. We studied 3 dose levels of REZPEG, 300 micrograms, 900 micrograms or 1,800 micrograms. Each arm had a target enrollment of 70 and was compared to the placebo arm in separate analysis. The study was powered for statistical significance on the primary endpoint only. REZPEG was administered once every 2 weeks for a 24-week treatment period. The primary endpoint of the study was the percentage of the patients who achieved a 4-point or greater reduction in their SLEDAI-2K index score for the modified intent-to-treat population. The study looked at a number of secondary clinical and exploratory endpoints, including SRI-4, BICLA, LLDAS, as well as other measures such as CLASI-50. And today, I will be walking you through the top line results from this Phase II study, including the safety and efficacy data. Slide 4. As Howard stated, Lilly has told us they do not plan to advance to Phase III. On this slide, we are showing the criteria that Lilly used to make that decision. The primary endpoint of SLEDAI-2K was not chosen as a critical success factor. It's important to note that this endpoint has not been used as a basis for approval of other drugs in lupus. The SRI-4 and BICLA endpoints have been used for approval in this disease area. In each dose levels, the efficacy was considered independently, and as I stated earlier, the study was not statistically powered for these secondary endpoints. You can see the low range here for SRI-4 was 17% to 22%, and the low range for BICLA was 10% to 16%. Greater than 22% for SRI-4 and greater than 16% for BICLA were considered the high threshold for these success factors. On the right hand of the slide, as a frame of reference, you can see the placebo-adjusted rates for SRI-4 and BICLA for the 2 approved standard of care agents in lupus today, Benlysta and Saphnelo, also known as belimumab and anifrolumab. The success criteria for advancing to Phase III required reaching these ranges for both endpoints, and these ranges were chosen based upon Lilly's experience in development with other agents in lupus in their pipeline. Slide 5. This slide outlines the definition of the endpoints, including the ones I just mentioned, that were used in this Phase II study. These are relatively standard and recent contemporary studies being conducted in lupus patients. I'm not going to touch on all of these, but each instrument uses different measures to score the disease in lupus patients. Next slide. The Phase II protocol included several patient populations which were predefined for analysis. These included the Modified Intent to Treat and Per Protocol populations. The Modified Intent to Treat included patients who received at least 1 dose of study medication. Per Protocol population was a pre-specified subset of patients in mITT which excluded patients that experienced an important protocol deviation that could compromise efficacy results. These protocol deviations were prospectively defined in the protocol. Also, within both of these patient subsets, there was a BICLA Evaluable population. This is a subset of the mITT population and Per Protocol that includes only patients that have active BILAG scores of at least 1 A category and/or 2 B categories at baseline. Slide 7. Here is a breakdown of these study populations. I will note that there is roughly a 24% reduction in the per protocol population from the mITT. The second I want to point out, the BICLA Evaluable Population was approximately 80% of the mITT population. Slide 8. Shown here are the baseline demographics for the patient populations enrolled in this study, and these demographics look quite comparable to other studies in this space. Slide 9 shows the country enrollment and the breakdown of the patients enrolled in this global study. The top 5 enrolling countries were Argentina, the U.S., India, the Ukraine and Mexico. As Slide 10 shows the baseline disease characteristics for the study, and these are typical measurements of disease patients in lupus. And you can see the different baseline disease characteristics across the different dose levels as well as the placebo group in this study. Slide 11. So first, I will review some safety results. Here is the breakdown of treatment discontinuations that occurred at each dose arm. Of note, the highest number of discontinuations occurred in the 1,800 or high-dose arm. And you will see in a moment that this dose level was less well tolerated and associated with more adverse events. Next slide, please. Continuing with safety. This slide shows the treatment-emergent adverse events reported in at least 5% of the patients in the safety population. In general, we saw a dose-dependent increase in adverse events and the most common AEs, that are drug related were fever, fatigue and injection site reactions, also known as ISRs. There was 1 death attributed to COVID-19, and this was not related to study medication. The protocol also included a thorough independent ISR assessment. The outcome of this assessment showed ISRs were dose-dependent and were highest following the first dose in the study and then declined over the 24-week treatment period. The majority of ISRs were mild, and 6 patients randomized to the high dose level discontinued due to an ISR. Next slide. With respect to the pharmacokinetic and pharmacodynamic measurements, these were very consistent with what we observed in our prior clinical studies. The pharmacokinetic and pharmacodynamic results obtained in this study in lupus patients clearly demonstrated target engagement and the mechanism of action of REZPEG to increase the numbers and reduce the activation of regulatory T cells. The pharmacokinetic profile across the doses was dose proportional, and activated regulatory T cell increases were also dose dependent. There were no changes to CD4 and CD8 T cells, and there were also NK cell increases that also were consistent with those observed in prior studies. Next slide, Slide 14. Now, shifting over to the primary endpoint of the study. Shown here are the data at all doses for the SLEDAI-2K endpoint in the Modified Intent to Treat and the Per Protocol study populations. The primary endpoint of SLEDAI-2K was the percent of patients that achieved a 4-point or greater reduction in their SLEDAI scores in the mITT population. The primary endpoint was not met in the study. As you can see, the 900 or the middle dose had the most significant delta over placebo as compared to the other dose level studied. This placebo-adjusted delta was 8.8% for the mITT population with a p-value of 0.309, and 13.9% for the Per Protocol population with a p-value of 0.06. As you can see, the efficacy at 1,800 dose level was lower than that observed for the 900 dose levels. Nektar's hypothesis is that the level of treatment continuations and the overall tolerability observed at this dose levels impacted the efficacy of this dose level in patients with moderate to severe lupus. Next slide, Slide 15. Shown here are the data for the BICLA evaluable patients. We were quite pleased to see, as I mentioned earlier, that the 900 dose level achieved the delta of 16.4% and 19.1% for the mITT population and the Per Protocol Population, respectively. And as Howard mentioned earlier, this result met the high threshold level for the success criteria set on the BICLA secondary endpoint for the study. The next slide, Slide 16, shows shifting over for the results for the SRI-4 secondary endpoint. This slide presents the results for this measurement across all of the dose levels. At the middle dose level, 900, we observed a placebo-adjusted SRI-4 response rate of 8.9% and 14.9% for the mITT and the Per Protocol Population, respectively. Next slide, Slide 17. So as we mentioned earlier, Lilly has told us they do not plan to advance to Phase III. Now, while each dose level is concerned independently, the criteria for Phase III decision-making required reaching the success threshold on both the SRI-4 and the BICLA endpoints. While we did meet the high threshold for BICLA at the middle or 900 dose level, we did not meet that endpoint on SRI-4. Next slide. Moving on to the final secondary endpoint for the study, here are the results for the 3 dose levels for the LLDAS endpoint at week 24. This is a rigorous endpoint that requires the patient to achieve a substantial reduction in disease in order to achieve the low disease activity state, which is defined by this instrument. The 900 dose level showed placebo-adjusted deltas of 12.2% and 15.1% for the mITT and the Per Protocol Populations, respectively. Next slide. To give some final perspective, shown here are a range of placebo-adjusted measurements for the 900 dose level, including the endpoints I just shared. We observed an improvement in responses in various components of the BILAG and SLEDAI scoring systems, including those which measure elements of joint and skin involvement. Also shown on this graph is the placebo-adjusted CLASI-50 response. And this CLASI-50 measurement includes only patients who had a baseline score of 10 or higher and experienced at least a 50% reduction in their score. The totality of these data demonstrate a positive impact of REZPEG on multiple measures of disease activity. So in conclusion, we have learned a lot from the study about the profile of REZPEG in patients with moderate to severe lupus. Firstly, at the 900 dose, the placebo-adjusted responder rate for BICLA is a similar rate to other agents that have advanced to Phase III registrational studies, including belimumab and anifrolumab. Combined with the other supportive evidence, we believe REZPEG has demonstrated activity in lupus. We are eager to determine the path forward to advance REZPEG in the clinic in atopic dermatitis and in other autoimmune diseases. And with that, I'll now open up the call for questions. Operator?

[Operator Instructions] And our first question will come from Mara Goldstein from Mizuho.

This is Supawat for Mara. I have a quick question on data on Slide 10. I know the SLEDAI mean score seems roughly similar across different dose group, but it seems like the 900 mcg seems to have a little bit higher percentage of the SLEDAI-2K less than 10. I'm just curious if that means anything?

Yes. Thank you for the question. Yes, that's a very good observation. We did look at all these parameters as well as this particular parameter, which was 1 of stratification rules for the study. We did note some small differences between some of the dose levels, and you can see that a little bit for the 900. You can also see that a little bit in the other direction for the placebo. So it's a good observation, and we'll continue evaluating this data along with our partner, Lilly, to determine any of those kind of elements that could have an impact on the results.

Got it. And if I may squeeze in 1 more question. So when do you expect a clarity from Lilly, whether what's their opinions on the other programs? And if you were to take the lupus drive forward through other means, what would you adjust in the Phase III study?

This is Howard. Well, look, we're having discussions with Lilly about how to proceed forward in other indications. They have said they do not plan to move forward in lupus. And like I said, I think that's very disappointing, but that's their decision. We are having discussions with them regarding how we move forward in atopic dermatitis and other indications, and I think -- I don't think we will be seeing lupus move forward at this point. So we will, of course, let everybody know how we intend to proceed with atopic dermatitis.

And your other question actually had a lot to do with what we learned from the study and how you would use this information with future development plans, particularly in this indication. And I'll open and then turn it over to Brian to add more color. But I could definitely tell you that this study, as I just mentioned, really taught us a lot about the activity of REZPEG in patients with moderate to severe lupus. And we learned information about the dose levels that we studied. We learned the relationship between activity. We also learned a lot about the endpoints, including the most contemporary endpoints used for the most recent approvals. And I think with that preamble, Brian, maybe if you could add color on how you would use that information for next steps in lupus.

So if we were to proceed to the next study in lupus, I mean, we first need to understand the dose in the optimal dose, and the fact that we experienced these systemic tolerability issues at the highest dose. And I think that's the most important thing that we need to understand better to move this forward. The 900 dose showed clear evidence of efficacy. We think that it's, in terms of adverse events and systemic toxicity at the 900 dose, we believe that it's definitely tolerable and the benefit risk is appropriate at that dose level. But I do think that we need to best understand why we have a bell shaped curve here, and I think that would be most important in terms of moving forward to the next step.

Yes, let me -- I just want to add to what Brian said. Look, the purpose of a Phase II study is to inform Phase III, and to give you an understanding of how you move forward into Phase III. Clearly, the drug was active in lupus. There's a lot -- as Brian and JZ said, there's a lot to be learned and a lot that could be used in designing an appropriate Phase III study, although we won't be doing that. Lilly is not moving it forward in Phase III, and Nektar is not going to be moving it forward in Phase III either at this point. So we have to focus on the resources we have, and we have to focus on the best prospects we have and the best development of our pipeline, and I don't believe we'll be moving forward in lupus. That said, it's very disappointing because as was clearly elucidated, there's a lot of information that was learned from this phase study that could have easily informed the successful Phase III study, and I think there's a real great opportunity. We're very sorry about the technical difficulty we just experienced. We had -- the system dropped off-line. So if anybody would like to continue with the questions, that would be great.

Our next question will come from Roger Song from Jefferies.

Great. Understanding you're probably not going to move the lupus into Phase III by yourselves or the partner. But just in terms of the discussion with Eli Lilly, how the data will read through to the AD, the criteria to move forward? Do they change the hurdle to move forward, or any kind of fact is going to impact the design of the Phase II or the potential kind of outcome from the Phase II?

This is JZ. Yes, so one of the things that we've been very, very clear of and highly aligned with Lilly is that the different indications, they really represent different kinds of disease states and immunological states, right? So in a condition like atopic dermatitis, patients have atopi, and it's atopi of their dermis, right? So it's a skin-focused anatomical disease. In a disease like lupus, you have a systemic inflammation, and you have a clear overall inflammatory response. And in other indications like psoriasis, where we also saw activity, you have a dermal disease. And even in ulcerative colitis, which was a study that we were running, you have a mucosal inflammatory disease. We fully understand and expect that there are differences underlying the kind of immune dysfunction in these patients that have diseases in those anatomic regions, and also the effect of Tregs and helping to control those. So what we learned in this study is definitely we learned that we had a dose response in patients with lupus across the first 2 dose levels have flattened at the higher dose. And we also saw quite a lot of activity, as we've been discussing on the call, particularly at that middle dose level where we saw the BICLA response and others. So when we think about atopic dermatitis, which is the next Phase II study, we already have proof of concept in our Phase Ib trial that Eli Lilly ran, where we saw activity that was right in the range of DUPIXENT. And also, we saw a durability of response in that patient population. And so definitely, learnings from this study will be helped to inform elements of the design of that study. And we're working with Lilly and very actively discussing that indication, that study, the next steps for that study, both in terms of its -- any kind of modifications to a design that we've already agreed upon as well as it's conduct.

[Operator Instructions] Our next question comes from Chang Li from OpCo.

This is [ Sean ] on the line for Jay. Maybe a couple from us. First, maybe just a follow-up question from the previous one. Just wondering if you see any differences in activity maybe in the different patient subgroups, for example, maybe for patients with SLEDAI-2K score over 10 versus less than 10? And maybe a second one is on the biomarker, especially for Treg and NK cells. So do you see the highest level of Treg expansion in the 900 dose cohort? And also, what is the meaningfulness to see the NK cell expansion in this context, especially with the highest group?

Sure. So I'll answer your second question first, but then I think I might need to ask to repeat your first question afterwards because I wasn't sure I caught it. But let me answer the second question first. So you had a question about the pharmacodynamic response for both Tregs as well as other measures. So we saw a dose-dependent increase in regulatory T cell elevations, and the level and magnitude of those changes were very, very similar to what we've seen in all of the other studies of REZPEG, which included the -- even the healthy volunteer studies that we ran, the lupus study that we ran as well as the dermatology studies that Eli Lilly ran. So those were dose proportional. The magnitude and the duration and range of increase were also very consistent across the studies. And that was also very important because this study had a 6-month treatment duration, which is longer than the 12-week treatment duration, which in our derm studies prior to this study was the longest duration. 12 weeks as opposed to this one, which was 24 weeks. Now we also saw no change in traditional conventional CD4 and CD8 T cells, which is right online with the mechanism of the drug. And also, we saw dose-dependent increases in NK cells. We've seen those from the beginning of the program, again, from the single ascending dose studies through all of the other studies. They're in observation. I mean, we did note that in lupus patients, the higher dose level had a different tolerability because that's something that we learned in the study. That's not something that we saw in other studies at the same high level of REZPEG treatment. What's the underlying reasons for that are, we'd still have to understand. But right now, based on the fact that we've seen the same kind of cellular elevations, including NK cells across all the different studies, we don't think that was the reason for the different tolerability profile. I think more likely due to the underlying disease and inflammation that patients with moderate to severe lupus have relative to other patients -- other diseases. Now do you mind repeating your first question?

Yes, sure. The first question is more on the -- if you see activity or different level of activity in patients with different baseline character, for example, for patients with SLEDAI-2K score over 10 versus those less than 10? Do you see any differences in activity?

Yes. So I think that -- that's a good question. And you're asking a question again about the kind of potential imbalance in those groups between both the placebo and the REZPEG, and the distribution of patients at the less than 10 and greater than 10. Those kind of analysis, along with subgroups and other stratification factors, are all still ongoing. But it's a good question you had, and a good observation.

So if I could add, we just haven't had -- I think what you'd like to hear is an analysis of the different subgroups and how the different subgroups responded to therapy. And we just -- we've only had this data for a few days, and it's going to take some time to analyze different subgroups, for example, different disease activity and how that related to response. So -- but we're definitely interested to do that.

[Operator Instructions] And our next question will come from Greg Harrison from Bank of America.

This is Mary Kate on for Greg. I guess could you add any additional color to the adverse events and discontinuations seen? And then maybe do you think this could potentially read through into other indications such as atopic derm?

Yes, certainly. So the treatment discontinuations that we saw in the study, they were dose dependent, as we presented on Slide 11. And at the high dose level, they were much higher than what we've seen in any other study. And then when we overall looked at the reasons of discontinuation being attributed to drug, which we showed on Slide 12, they were lower than the overall discontinuation rate for sure. The tolerability profile, particularly at the higher dose level, demonstrated more systemic toxicity. And you saw that we presented data for fever, for pyrexia, for elevations in fatigue and injection site reaction, and they were really most pronounced at the highest dose level. Now in our experience studying REZPEG, multiple dose levels across all the other studies, including atopic dermatitis where we studied REZPEG for 12 weeks in patients with atopic dermatitis, we really didn't see that kind of level of systemic toxicities, particularly the level of systemic toxicities we observed at the highest dose level. I do want to point out that the majority of these were mild to moderate, even at the highest dose level. And as I mentioned, the rate of discontinuation due to drug treatment was lower, still lower than the overall tolerability profile. So that establishes what we learned in this study. And then to your second question about read-through to other indications. I mean, really, all of these conditions are different. And the indication of atopic dermatitis, the indication of the psoriasis, in lupus, these are different underlying immune conditions. When we looked at our data, even in comparison to other agents that are also being studied in lupus, we saw very similar rates of discontinuation as well as adverse events even at the higher dose level and that with same level of comparability. So while we have learned from the study, we would take the learnings in context of the indication that they were studied in, and we don't think it has a negative read-through on studying the drug in other indications such as atopic dermatitis.

[Operator Instructions] And our next question will come from Benjamin Burnett from Stifel.

This is Neil Carnahan on for Ben. On tolerability, how early on did discontinuation generally occur? Did you see any trends across the doses? And then was there anything like tolerability profile that will give you learnings that you can incorporate into the dose schema for the atopic derm study?

Sure, yes. So you're asking about the timing of discontinuations, like did they all happen at the beginning, for example. And so we did have an opportunity to look at that, and the discontinuations were pretty kind of -- pretty consistent throughout the duration of the study. They didn't all just happen at once, they kind of happened throughout. And there was no dose dependency to those, only the frequency, but the timing of them was pretty consistent throughout the 24-week period. And then your next question was about the read-through of this profile. Like I just described, all of these indications are different. We even know of many instances where different dose levels of drug are used in different indications as well. Clearly, in patients with moderate to severe lupus, the 900 dose level is the most appropriate dose level of the study in these patients. In other indications, there will be other dose levels that we can study. And as I mentioned earlier, with the underlying differences in the immune system between these patients, what we've learned about the study from REZPEG is something that we can learn and advance from, but it doesn't have a negative or other kind of connotation towards studying the drug in other indications. And we have the opportunity to evaluate all of these dose levels as well as the dose levels that we previously studied in the same indications. And the last thing that I'd like to reiterate, which is that when you compare the tolerability rate of REZPEG at the 900 dose level, this AE rate is highly comparable for overall as well as discontinuations compared to other agents that are studied in the same patient population, including drugs that have been studied in Phase II and advanced to Phase III.

And our last question comes from Daina Graybosch from SVB Securities.

Two questions for me. One, I wonder if you have any hypotheses mechanistically, why you may have seen a better difference to placebo on BICLA versus the other scores? And then the second question, I think somebody asked you earlier very first. I want to ask again, because I'm not sure I fully understood your answer. And that is, you've seen in the 900 microgram dose on every endpoint to have a pretty high placebo effect, and I wonder whether you have any hypothesis for this relatively higher placebo effect? And if that could be -- whatever is driving that could be driving the bigger difference at 900 rather than 900 being the best dose?

Sure, okay. So your first question, Daina, was about different endpoints, say, SRI-4, SLEDAI relative to BICLA. So these are different measurements, right? So in the SRI, which primarily requires a 4-point or greater reduction in SLEDAI as well as the other composite parameters. This is a very categorical endpoint, right? You basically score the presence or the absence of any of the disease manifestations over the last 30 days. And then depending on which particular manifestation you're scoring and it's waiting, you can achieve a 4-point reduction essentially by binary presence or absence of any of those manifestations. Now in contrast, BICLA is a categorical endpoint that actually has -- it scores a disease with more dimension than just presence or absence, right? So as you know, a Category A BILAG is a physician's assessment of requiring high-dose drug intervention for the patient. And a Category B requires a kind of a lower level drug intervention, Category C is mild, and Category D is absent. And so to get a BILAG improvement response, you have to drive Category As down to C, and Bs down to C. So basically driving active disease to mild or all the way to absent actually scores you as an improvement. So we think that one of the differences between these 2 measurements, and clearly, what we learned about REZPEG and maybe also the Treg mechanism, is that the BICLA endpoint may be more sensitive than the SRI or SLEDAI endpoints, especially at this week 24 time point, for this is a 6-month duration study. So we think it's really -- it's some of the differences between these instruments and particularly the ability to get a BILAG improvement as opposed to a categorical response in the SLEDAI. And that's something that we're evaluating as we'll be diving deeper and deeper into the data and the different components of the different instruments on the efficacy. In regards to your other question, I mean, we looked at the placebo response rate, which ranges between 30% and 35% around BICLA, SLEDAI or SRI-4. I mean, we do note that this placebo rate is a little bit lower than other studies. That is true. But I mean, it doesn't really seem that different to us compared to what we seen for other contemporary published studies. And we even looked at both the mITT and the Per Protocol, right, and compared the 2 to each other in order to just, for the sake of completeness, to make sure that we're not missing anything. So it seems like the placebo rate is pretty reasonable. Am I understanding your question?

Well, I guess it just looks in these charts like the 900 is a higher placebo than the other doses, just if you wish to cross check.

It's 30%. The placebo is on the left. Yes, the placebo is on the far left.

Got it.

Yes. See, the placebo for the mITT and the Per Protocol is on the far left.

I understand. I understand. I misread the chart, so thank you for that clarification. I see. So then one more question is, you mentioned the 24-week readout. Did you take readouts of all these endpoints at earlier time points, and was that consistent with the final readout?

That's a really great question. So actually, yes, we looked at the separation with time. And some of these endpoints, particularly BICLA and LLDAS, they separate from placebo at a very early time point. That was a very, very dramatic and very fast response that you could see from the time dependence of the data.

Thank you. And I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Howard Robin for any closing remarks.

I want to thank everyone for joining us today. I think the most important takeaway from this Phase II study in lupus is that REZPEG as single agent clearly showed important clinical activity and a difficult-to-treat patient population across many measurements. And the Phase II study results could have informed a well-designed Phase III study in lupus. So while we're very disappointed in Lilly's decision not to proceed in lupus, as I said earlier, REZPEG has shown promising efficacy in atopic dermatitis, and we strongly believe that REZPEG should be advanced quickly in atopic dermatitis and potentially other indications. Lastly, I want to thank the Nektar research team who's worked diligently in inventing a novel and active therapeutic candidate that could potentially help lupus patients with this very devastating disease. Okay. Thank you, everyone, for joining us today.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.