Nektar Therapeutics (NKTR) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Nektar Therapeutics Investor and Analyst Event. [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, Jennifer Ruddock, Chief Business Officer. Please go ahead.

Thank you, Crystal. Good morning, everyone, and thank you for joining us on today's analyst call to discuss the final Phase 1 data for REZPEG and atopic dermatitis. Next slide. Before we start, I'll remind you that this presentation includes forward-looking statements regarding Nektar's drug candidate REZPEG, clinical trials results,, the timing of the startup and plans for ongoing or planned clinical trials, the therapeutic potential of our drug candidate, 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 August 9, 2023, 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 of 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. Mary Tagliaferri, our Chief Medical Officer. Next slide. We are also privileged to be joined by our guest speakers, Dr. David Rosmarin, Dr. Jonathan Silverberg, and Dr. Raj Chovatiya. All 3 doctors are leaders in the field of dermatology and will also be key study investigators in our Phase 2b study of REZPEG. Dr. David Rosmarin is Chair of the Department of Dermatology at Indiana University and a Kampen-Norins Scholar in Dermatology. He is nationally recognized and serves as a referral for physicians with difficult to manage inflammatory diseases such as atopic dermatitis. Dr. Jonathan Silverberg serves as Professor of Dermatology at The George Washington University School of Medicine and Health Sciences, and Director of Clinical Research and Contact Dermatitis. He is nationally recognized with over 1,000 publications and has also been a principal investigator for numerous clinical trials for novel treatments in atopic dermatitis. He will also serve as the Chair of the steering committee for the Nektar Phase 2b trial of REZPEG. Dr. Raj Chovatiya is a board-certified dermatologist for the clinical and research focus that includes the intersection of cutaneous immunology and inflammatory disease. He served as an Assistant Professor of Dermatology at the Northwestern University Feinberg School of Medicine. Next slide. So here is our agenda for today. To start off, Dr. Rosmarin will review the pathophysiology and biology of atopic dermatitis. Dr. Silverberg will then present on the incidence and categorization of disease, and then Dr. Chovatiya will provide an overview of the treatment landscape. Finally, JZ will present the final data set from the Phase 1b study in atopic dermatitis before sharing more about our future clinical plans for the program. Then we'll open the event for any questions. With that, I would like to hand the call over to Dr. Rosmarin. David?

Thank you. So next slide. Atopic dermatitis is one of those common conditions we see as dermatologists, and it has a major impact on our patient's quality of life. What is it? It's this chronic inflammatory disorder commonly known as eczema that creates these red spots on patient's skin. Commonly, they're in [ lateral ] area, so opposite the elbows or opposite side of the knees, wrist, ankles, hands, face, but they can be anywhere on the body and range from mild to extremely severe. One of the hallmarks of the disease is that patients often have this really recalcitrant itch, which can keep patients up at night, really interfere with their quality of life. You can see in these photos that some patients have excoriations or the scratch marks on their arms and on their back. Next slide. So what's the pathogenesis for atopic dermatitis? Well, first, these patients often have a genetic predisposition where their barrier, which is the skin, is perfect. The skin is meant to keep out allergens and irritants and protect us from that harsh environment, but there can be certain mutations such as in filaggrin and [indiscernible] or in the lipid barrier proteins in African-Americans that make that barrier imperfect. And then these allergens and irritants are more -- activating the immune system. And fundamentally, it's this type 2 inflammatory response, these TH2 cells that are secreting cytokines like interleukin 4, 5 13, 31. And our brakes on the immune system, the 2 regulatory cells, are not sufficient at stopping that overabundance of inflammation from the type 2 cells. And the cytokines also signal to our itch fibers and create that sensation that is horrendous for our patients. Now when patients are really itchy, what do they do, they scratch and that hurts the barrier even more and allows the allergens and irritants to further activate the immune system, creating this downward spiral. Furthermore, the immune system on its own, having high levels of cytokines like interleukin-4, also sends signals that down-regulate barrier proteins, making the barrier worse. And then additionally, the microbiome is also affected so that we have higher levels of bacteria such as [ staph ] aureus and there's less microbial diversity. Thus, we see these atopic patients have higher infection rates for bacteria viruses and fungus. And what we see in our treatments is that when we tell the immune system to calm down and suppress it, that, that can help break that downward spiral so that we improve the barrier, improve the microbiome, improve the itch and improve the immune response, which is the redness on the patient's skin. So now I'm going to hand this over to Dr. Silverberg. Thank you. Next slide.

Great. Thanks very much, David. All right. So I'm going to discuss the incidence and categorization of the disease. Next slide. So focusing in on just how common is atopic dermatitis. I think it's important to understand, this is an incredibly common disorder and absolutely enormous market share. There is actually a rare convergence. In the world of epidemiology it's rare that you have multiple studies that actually align and you have such similar estimates. But we have data from the 2012 National Health Interview Survey, which is U.S. population-based survey that assessed the prevalence of eczema in adults and children. And the adult population prevalence was 7.2%. Then we have a separate study, which was done, different sampling design, different definitions and classification for atopic dermatitis, and we get a prevalence of atopic dermatitis in adults of 7.3%. And so that estimates to be approximately 16.5 million adults with atopic dermatitis and approximately 30 million patients in total in the U.S. with atopic dermatitis. And so it's often this perception, it's a disease purely of childhood is simply not the case. There's an absolutely enormous population in the adult population as well. Next slide. Now here we see a breakdown of prevalence of atopic dermatitis by itch, and these are data from the 2012 National Health Interview Survey. So assessing the [ cross-sectional ] in the past year, their history of eczema, and then stratifying that by different age groups. And what we see is perhaps not surprising for those of you who follow the atopic dermatitis space, that the peak prevalence is in early childhood. And it's pretty flat throughout childhood. There's this precipitous drop that happens in adolescence. We still don't know exactly the reasons for that. But then it hovers really throughout the entire adult age span between that 6% to 8% range, again, with that average of 7.2% across the adult years. So this is by no means purely [Technical Difficulty]. So -- and how do we think about subsetting these patients? And how commonly does moderate to severe disease occur? Now, this is something that could easily be debated in nuance because there's many different ways you could define severity in this disease. But these are data that are taken [Technical Difficulty] atopic dermatitis. In America study, so the U.S. population-based study of adults of atopic dermatitis and classified the disease severity by the Patient-Oriented Eczema Measure, or POEMs [ work ]. And this is a well-validated multi questionnaire assessing severity of atopic dermatitis. And based on this approach, it was estimated to be approximately 40% of adults in the U.S. with atopic dermatitis having moderate to severe disease, and that estimates to approximately 6 million adults with moderate to severe disease in the United States. And just for contrast, I compare these results with results from childhood where the disease is more prevalent. But in fact, actually, the proportion with moderate to severe disease is lower. So as these patients get older, so to speak, the prevalence may decrease, as I showed you in the previous slide, but the proportion with moderate to severe disease actually increases. Next slide. Now I'm thinking about the management of atopic dermatitis. There's a lot here, and it's complicated. And you look at a figure like this and say, well, there's a lot going on. We start with the fundamentals -- any of our treatment approaches leverage this concept of the step-up approach to therapy, sort of trying to maximize the conservative, perhaps even non-medicated treatment approaches wherever possible. And then the mildest of the mild, often the patients who don't even ever come in to see a physician for their disease. This might be enough to just moisturize or just some bathing recommendations, some trigger avoidance and that might be enough to do most of the heavy lifting. By the time they're already getting into a primary care provider, they've probably already tried and failed some of that, and they need more. And so what comes after that, then it's a range of different topical therapies. Obviously, the toolbox there is growing. But it's typically topical corticosteroids. And -- but we also have calcineurin inhibitors, the new Phosphodiesterase E4 inhibitors, topical JAK inhibitors. These can be used both to treat flares but also sort of proactively to prevent flares. But very quickly in this disease, sometimes within just 2 to 3 weeks you know if the topicals are adequate or not. And if they're not, then it's time to step up according to all the guidelines. And so you have a choice of options to think about. And when looking at these different options, each has their pros and cons. A lot of the ones listed here are non-approved in the United States, or really any region for that matter. And each comes with its own challenges and limitations. Next slide. So let's think about some of the just general unmet needs in the field. And this is by no means comprehensive. This was sort of like my off-the-cuff notes and just thinking about the field. But certainly, we have a major challenge across the Board of under treatment. All the data shows that as a general field in dermatology, allergy, immunology, primary care, we are not doing as good of a job as we could in terms of optimizing management of the disease in the real world. There's also a major abuse of systemic corticosteroids, and some would argue even topical corticosteroids in terms of the adverse event profile, the risk exposure and some of the challenges that come up. There's a big issue in terms of low and delayed use of advanced systemic. So obviously, things have immensely improved over the past 5 to 7 years, but we -- by no means have we seen the ceiling of where this market goes. We barely even scratched the surface, no pun intended. And then there's a big, big sort of pillar of management of the disease, is really the recognition that we need to be to [Technical Difficulty] a long-term control. It's a chronic disease. We don't just want Pulse rescue therapy, and we need more tools to be able to try to achieve that. Next slide. So thinking about specifically unmet needs for systemics and biologics, thinking about sort of compared to Dupilumab, right? We've got -- the first approved biologic in the field was Dupilumab back in '17, and it's been a welcome addition to the field. But there are still a number of unmet needs. One, we would always love to have even more reliable and more robust efficacy, but notably without the safety tradeoffs, it would be great if we could get comparable efficacy or better, but with less frequent dosing, fewer injections. Flexible dosing options would be nice to allow tailoring of therapy for individual patients. We'd love to have treatments that are at least as safe and effective for long-term use as Dupilumab and the other type 2 blockers. Conjunctivitis for many is a mild issue, but in my practice and for many really who are KOLs in the field, it's a pain in the backside. I mean, it really is -- and it can be a major reason for discontinuation -- as well as this red face issue that comes up, which is a hodge podge of issues that come up on the face with Dupilumab that weren't even detected in the trial. And this can be a real problem. So we definitely would love to have therapies that don't have these adverse events. We'd love to have safe and effective options to use in patients who previously had inadequate response for adverse events from Dupilumab. So at least a great second-line option even if we were to use Dupilumab as first line. And then safe and effective options to use in patients who had secondary loss of response to Dupilumab. Now years ago, this wasn't a big issue, but the longer patients are on drug, the more we see this in the real world. Next slide. So how do we sort of compare? I mean, there's a lot of new options out there. Each is different. And this is one of the challenging things that has come up. Each one has value, each one has added sort of incrementally to the toolbox. None of them are really the magic bullet for all patients. And so we've got some head-to-head data comparing the oral JAK inhibitors against Dupilumab. But there's no way we're ever going to see head-to-head data for every different asset out there, past, present and future. And so we're left to do this exercise of cross-trial comparisons. And so, here I present the results of a network meta-analysis that looked at Phase 3 randomized controlled trials. These are all registration studies for the 5 FDA-approved treatments -- or I should say, 4 FDA-approved treatments. The baricitinib is approved ex U.S. for atopic dermatitis, but not in the United States. And comparing just relative efficacy. And of course, I have to give that cautionary disclaimer that these are not apples-to-apples. There's nuances in the trial design, et cetera. I think that's the obvious disclaimer. But we're left with limited options to be able to cross trial compare otherwise. And so we represent the results for EASI-75, which is a moderate clinical improvement, EASI-90 which is a major clinical improvement. And what we see is that relative to -- well, I guess the most effective in the field would be upadacitinib and abrocitinib, particularly at the higher doses. But of note, these are medications that require laboratory monitoring, their once-daily dosing and they have numerous black boxed warnings, including death. So as much as we use them and their welcome additions to our toolbox, they are quite complicated in terms of their use. Baricitinib is actually less effective than Dupilumab, which is sort of in the middle. Abrocitinib at the 100 milligram dose is about neck and neck with Dupilumab, and then tralokinumab, at least at the 12 to 16-week time point shows less efficacy. Although with time, it sort of catches up, but it certainly appears to be slower than Dupilumab. And so this gives you a relative sense of the options, but none of these are even close to 100% effective. And the ones that are most effective, really have a lot of safety penalties, trade-offs, considerations that need to be dealt with, which limit their uptake in the world. And so all of this really points to opportunities for more options and better options to come in the future. And with that, I thank you for your attention, and I'll turn it over to the next speaker.

Thanks so much for setting me up, Jonathan, and thanks, everybody, for having me. And to kind of continue and tie off and really transition to what Jonathan was talking about, we're going to be talking a bit about just the atopic dermatitis treatment landscape as we know it today. Next slide to Slide 18, please. So the treatment approach has changed considerably over the past few years. And much as Jonathan really sort of let you guys know that kind of there's this pre Dupilumab and post Dupilumab time where we really started seeing targeted therapeutics, particularly in the moderate to severe space. And so utilizing the same diagram that you just saw a few slides before. Generally speaking, the way we think about atopic dermatitis treatment is in these modules based on severity with sort of step-up and based on who you [ as ] step-down approaches as well. In general, across severities, we think about optimizing bathing, moisturization, avoiding triggers as foundational to management of disease. And that actually works for quite a few people with very, very mild disease. But typically, for people with mild to moderate disease that are going to be speaking of care from a health care provider, this is when you start thinking about topical anti-inflammatory medications. So historically, this was corticosteroids, calcineurin inhibitors sort of some 20 years ago. And then in recent times, crisaborole, our first phosphodiesterase 4 inhibitor and then topical ruxolitinib in the past couple of years, a topical JAK 1, 2 inhibitor. And typically with topical therapies, we think about sort of reactive treatment, maybe stepping up to more of a proactive type treatment for some of these, before we then transition into our advanced systemic therapeutics for disease that's refractory and falls into more of a moderate to severe range. And this is where we've really seen a cavalcade of therapeutic options, both approved and a number in the pipeline progressing their way through Phase 1, 2 and 3 trials. Before our general approach was global immunotherapeutics -- not immunotherapeutics, immunosuppressants release, cyclosporine, methotrexate, azathioprine, things that weren't really designed for atopic dermatitis, but are generally immunosuppressive, and we kind of use them because we had to. But sort of since Dupilumab, which is a blocker from the IL-4 receptor alpha subunit, we've had tralokinumab, which is an IL-13 blocker, abrocitinib and upadacitinib, which are sort of more JAK 1 blockers as well. So let's talk a little bit about our moderate to severe -- Next slide, please -- moderate to severe therapeutic options. When thinking about biologics and JAK inhibitors as our 2 big categories of what we have right now, for the sake of this discussion, we can put aside some of our more historical relics, if you will, in the case of cyclosporine and methotrexate, which we know are highly limited for duration and use just based on overall adverse events. In the case of biologic therapies, there's a series of advantages and disadvantages, and this is again sort of just kind of off the top of my head thinking about what we have today. So in the case of biologic therapies like Dupilumab and tralokinumab, first-line systemic therapy after topical. There's nothing stopping you from sort of using these immediately after somebody's failed topical therapy and has never been on a systemic therapy before. There's no lab monitoring, which is fantastic for patients and fantastic for the clinician. They've really shown safety and efficacy for long-term management. In the case of Dupilumab, we have approvals for other diseases that can present as comorbidities in our atopic dermatitis patients, which is sort of a nice bonus when you're talking about treating the whole patient. You have multiple years of real-world data at this point in time that's continuing to accumulate. And we've seen approval of younger ages, particularly in the case of Dupilumab all the way down to infancy and recommendations suggesting safety and efficacy for use in older age, a population where we're now beginning to understand perhaps there is more atopic dermatitis and atopic dermatitis like disease as well. However, there's no perfect therapy. In the case of biologics, some of the disadvantages that you could really perceive, moderate to severe disease only, obviously, that's inherent in the approval, but you can sort of go with that. Injections, not everybody likes needles in that standpoint. Refrigeration, which can be a problem for some people in terms of storage and medication access. These medications tend to be slower in onset. So they don't necessarily have rapidity, particularly for intralesional clearance within the first few weeks. Even though they may show statistically significant changes, they're just not quite as fast as, let's say, an oral small molecule might be, which we'll touch on in a second. Biologics are really only available in one dose. There's an inability to step up when it comes to therapy. You heard a little bit about the potential side effects as Jonathan put them in the case of Dupilumab. And maybe similarly or perhaps less or so in the trial that came on conjunctivitis is the big one, and then in the case of Dupilumab as well as that red face, which can be very frustrating for people that end up with. [ There are ] lot of these patients referred in. And then a general point about medication, cost and access can definitely be an issue as well. Next slide, please. What about the oral JAK inhibitors, which, in many ways, we kind of thought were going to be the sort of coming savior of most of our patients with moderate to severe disease. But these also, while they have their advantages, have some very important disadvantages that are probably going to limit their broad use as well. So oral JAK inhibitors have very rapid improvement of signs, symptoms, other measures on the order of days to weeks, which is different than what we have with biologic therapy. And from a variety of different discrete choice experiments when you can sort of look at psychologically when patients may choose when it comes to therapy, that actually does seem to matter to our patients when it comes to ranking these things. Particularly at the higher dosing, there's higher levels of efficacy than previously ever measured when it comes to both itch improvement and a lesional improvement as well. Flexible dosing. So there isn't a single dose in the case of abrocitinib and upadacitinib which are approved in this country. There is a lower dose and a higher dose allowing you to tailor a bit to the clinical scenario. Because they're small molecule inhibitors of an intracellular enzyme, there's really minimal concerns about immunogenicity or intermittent use, which can exist with biologic therapy that are based on monoclonal antibodies. We know with oral JAK inhibitors, they're safe and effective for long-term management based on the evidence we have so far. Generally speaking, as far as the strict trials go for atopic dermatitis, the majority of adverse events were actually mild to moderate and largely pretty favorable. Additionally, there's some advantages for treatment of other inflammatory conditions, and we're learning that in the case of oral JAK inhibitors, there is a lot of utility for things like inflammatory bowel disease, rheumatoid arthritis, alopecia areata, vitiligo, even hidradenitis suppurativa as well, but still not perfect. So effectively, based on the way that oral JAK inhibitors are indicated, they are recommended for use after somebody have had another systemic treatment and not had an adequate response. So this effectively makes them a second-line option, even though perhaps one can still use in first-line just based of strict indication warning on the prescribing information. There is a boxed warning that indicates things related to major adverse cardiovascular events, [indiscernible] events, malignancy, infection and potentially even death, which is obviously a very difficult thing to explain to patients. Knowing that a lot of that information while strictly may not come from the drug under study and the indication under study, we kind of have it, and it's there for us to have to talk about. There's limitations with use based on age, comorbidity or even other medications that are different than what we see with biologics. Lab monitoring, of course, is something that we have to do here, which we don't have to do in the case of biologics. And these are slightly more broadly acting on the immune system. And therefore, there are certain adverse events that seem to be signature, including herpesvirus infections. And there are rates of zoster and Herpes Simplex Virus, which I think about with oral JAK inhibitors. Finally, there are some inability to use in the case of pregnancy and lactation as well that can also make this a less flexible option. Next slide. Now generally speaking, when it comes to JAK inhibitors or biologics, there is one major problem that both of them share. Atopic dermatitis is a chronic disease and the way that our treatment options work, we're generally trying to inhibit some aspect of the inflammatory cascade to cause improvement for our patients. However, none of these treatments necessarily are associated with particularly long-lasting effects if treatment was to have [ test ]. So in the case of JAK inhibition with abrocitinib, you can see in here in this sort of Phase 2 data, individuals treated with 12 months, having a great change in terms of their percentage change in EASI. Once therapy is removed, you see a very rapid rebound back between the 12 to 16-week period approaching back to where things may have started. So very fast acting medication, but also once discontinued pretty quick, fast, return back to probably what baseline was. So not really a long-lasting effect. Additionally, in the case of Dupilumab, you can see here in this study, and this was sort of the 12 to 17-year-old pediatric and adolescent population. Individuals were treated over the course of 16 weeks and then observed over 16 weeks as well. And this is looking at individuals who achieved an EASI-75 response. You see a similar phenomenon. It's maybe a little more drawn out. But overall, the efficacy that was obtained largely tends to dissipate once therapy has discontinued as well. So a major goal of our patients is to look for some type of long-lasting effect or long-lasting control with therapy, which we know is something that we don't have in the way that we treat currently speaking. Next slide. So I'll leave you with this that, despite what we have in terms of our therapeutic revolution, this idea of -- remittance is the kind of a buzzword that I'll use, is kind of an elusive concept. And a lot of health care providers and frankly, patients without using the word, ask for medications with a [ remitting ] effect. And because that isn't really well defined, I guess I ask the general thought question, what might this mean for atopic dermatitis. Could this be complete clearance with medication discontinuation? Could this be complete clearance, [ we're ] just having to use the medication less, which is still different than what we have right now? What about near clearance if we were able to hold a medication or even very infrequently use it? That could be definitely something quite remitting when we think about what patients and providers are looking for. Control, which is sort of another elusive concept, however you choose to define it, with medication discontinuation or infrequent medication use would also represent a major move forward in the field, but not one that we have currently this therapy as well. So I guess I asked the thought question to transition into the next section, for a chronic disease like atopic dermatitis, what really might be possible. And with that, I want to throw it over to JZ.

Thank you very much, Raj. Next slide, please. And let's go to Slide 24. So as David explained earlier, TH2 T cell dysregulation is a central feature of atopic dermatitis immunopathogenesis. And regulatory T cell dysfunction and the imbalance between Tregs and other pathogenic cells can lead to a robust increase in the type 2 inflammatory cytokines. As mentioned, which include IL-4, IL-5 as well as IL-13 is some of the most notable TH2 and discuss TH2 cytokine elements in this disease. Now our hypothesis is that by addressing the Treg imbalance and impaired immunosuppressive function of the cells, we should be able to address the pathogenesis of atopic dermatitis and that could also be broadly applicable to several other autoimmune and inflammatory diseases. Studies have shown that IL-2 can lead to a dose-dependent increase in the proliferation survival and function of both immune effector cells as well as Tregs with the latter acting to maintain immunological homeostasis. The specific cell types activated by IL-2 depends on the dose level administered. Proof-of-concept clinical trials, backed by mechanistic studies shown that low-dose IL-2 therapy can specifically activate and expand Tregs to alleviate a number of pathological inflammatory and autoimmune conditions. And with REZPEG, we designed a unique IL-2 pathway agonist that aims to address the underlying Treg deficiencies in autoimmune diseases by selectively activating and expanding Treg. This program is uniquely positioned as the most advanced IL-2-based Treg mechanism in the clinic with approximately 600 people treated with REZPEG across 9 clinical studies. REZPEG provides a completely different mechanism of action compared to the other drugs that were discussed today, and that are currently approved or underdeveloped in this space. It utilizes the approved recombinant human IL-2 aldesleukin sequence with stable covenantly attached [ PEGmoitis ], which extend the half-life compared to human IL-2 and confers selectivity for Treg stimulation over conventional T cells. Slide 25, please. As I alluded, we hypothesized that REZPEG restores the immunological homeostasis that is disrupted in chronic inflammatory skin diseases, including atopic dermatitis by selectively inducing Treg activation and proliferation, and our preclinical experimental models validated these beliefs. Delayed type hypersensitivity is a classic model of in vivo T cell-mediated immunity. And in our preclinical study, it was used to establish a basis for REZPEG-mediated Treg activity in inflammatory skin disease. Mice were sensitized with the antigen, keyhole limpet haemocyanin, also known as KLH, [Technical Difficulty], and then challenged with KLH on the ear 5 days later. REZPEG dosage between 0.003 and 0.3 milligrams per kilogram were administered subcutaneously on day 03 and 6. And what we found was reduced DTH responses as measured by ear thicknesses from 24 through 96 hours after KLH challenge, and you can see the broad dose-dependent manner compared to vehicle. And you can also see that the 0.1 mg per kg REZPEG dose reduced a similar amount of efficacy as compared to a high dose regimen of cyclosporin A, which was administered daily for 8 days. Now about 1 month later, these same mice were sensitized with the new antigen, ovalbumin or OVA, without any additional treatment with REZPEG. And again, 5 days later, these mice were challenged with the new antigen OVA or the original antigen KLH. And mice that had been treated with REZPEG in the primary efficacy period demonstrated reduced DTH ear thickness compared to vehicle when rechallenged with the original antigen KLH but not with the new antigen OVA. So this antigen-specific protection against DTH reaction in REZPEG animals was detected within 24 hours and was durable through 168 hours after the KLH rechallenge. And these results are pretty exciting and suggest that NKTR-358 or REZPEG can induce an antigen-specific immune tolerance phenomenon with durable efficacy that can last well beyond the end of dose administration. Next slide, please. Based off of these preclinical findings, Lilly initiated a Phase 1b double-blind, placebo-controlled study in atopic dermatitis. The adjusted intent-to-treat population was randomized into 3 cohorts: REZPEG at 12 micrograms per kilogram, 24 micrograms per kilogram or placebo. And patients were treated once every 2 weeks up to 12 weeks and then observe until week 19. While on study, concomitant use of certain therapies, including topical treatments, systemic corticosteroids, immunomodulators and immunomodulating biologic modifiers and other investigational therapies was prohibited during the entire study, with study treatment discontinued in patients that required these treatments. However, rescue therapy with [indiscernible] cream or hydrocortisone ointment or topical calcineurin inhibitors was permitted for patients at any time after day 21 at the discretion of the investigator. Now to evaluate sustained responses, patients in all cohorts meeting an EASI-50 or better criteria week 19 were followed through an extended observation period through week 48 or until an EASI-25 response is no longer met. And efficacy measures evaluated, included the EASI Score and EASI related parameters as well as IGA, NRS and other patient-reported outcomes. Next slide, please. The baseline characteristics were generally balanced between the intervention groups. At enrollment, patients had a mean EASI Score of approximately 23 across the placebo and treatment arms. Patients in the placebo and REZPEG 12 microgram per kilogram and 24 microgram per kilogram cohorts had respectively, a mean body surface area involvement of 39%, 33.8% and 33.5%. And all enrolled patients had a validated investigator global assessment or VIGA score of 3 or greater, corresponding to moderate or severe disease. Next slide. This slide shows the percent change from baseline EASI Scores for the trial. Now to orient you in this and all other slides in this presentation, the placebo group is shown in gray, the 12 micrograph per kilogram REZPEG group is shown in blue and the 24 microgram per kilogram REZPEG group are shown in red. The drug administration is for 12 weeks. Then all patients are followed until week 19, and patients with an EASI-50 or better response to week 19 remain in the study until week 48 or until an EASI-25 response is no longer met. Keep in mind that there are different numbers of patients in the ITT populations in the week 0 through week 19 and the week 19 through week 48 periods. In the week 0 through 19 period, there were 10, 16 and 17 patients in the placebo, 12 and 24 microgram per kilogram REZPEG groups, respectively. And for the people that maintained an EASI-50 or better result and entered the week 19 through week 48 period there were 3, 9 and 10 people for the placebo, 12 and 24 microgram per kilogram REZPEG groups, respectively. The tables below the charts show the number of people with assessments at each time point and also note that not all people attended each study visit. Lastly, the data presented here today is the final study data. Hence, this complete data set includes all people in all the time points and is more comprehensive than the corrected interim study data we presented last month. Now focusing on the results. The chart on the right shows the rapid and dose-dependent drop in percent change from baseline EASI score for the 2 REZPEG groups. The LS mean results at the end of the 12-week induction period showed improvement from baseline of 47% for placebo, 65% for the 12 microgram per kilogram REZPEG group and 83% for the 24 microgram per kilogram REZPEG group. The 24 microgram per kilogram dose achieved a P-value of 0.002 versus placebo. Another notable feature of these results is extended durability, which is seen for the REZPEG groups, long after the completion of the 12-week induction period. Many people maintain durable disease control for an additional 36 weeks after the end of dosing. And as was pointed out earlier by Raj, this type of extended disease control after the end of dosing is not observed for Dupilumab or JAK inhibitors. Next slide, please. Shown here is the proportion of people that achieved an EASI-75 response, which is a 75% or better improvement in their change from baseline score. Now this is a key measure of efficacy, and we can see the dose-dependent effect for REZPEG, the rapid onset of action. For example, by week 4, after only 2 dose administrations of REZPEG, greater than 40% of the people in the 24 microgram per kilogram group achieved EASI-75 response. And most importantly, this analysis also demonstrates the durability of the EASI-75 response observed in the REZPEG groups, especially in the red line, the high dose group of 24 micrograms per kilogram. Next slide, please. Another way to look at this data is to use the appropriate populations for the week 0 through week 19 and week 19 through 48 periods. This chart presents the EASI-75 data in this way and allows us to really focus on the durability of the EASI-75 response. And again, this is a really important point because relapse is a common feature of atopic dermatitis, and many patients require long-term treatments. Now in this study, patients receiving REZPEG, maintain disease control for 36 weeks after discontinuing therapy and without additional systemic therapy. This presents one of the longest successful off-treatment follow-up study and suggest long-lasting responses and the possibility of infrequent maintenance dosing with NKTR-358 in the setting of atopic dermatitis. In contrast, a real-world study demonstrated the lack of durable efficacy with the first-in-class biologic Dupilumab where 79% of patients who discontinued the drug lost disease control after an average of 4 months and restarted therapy. This suggests that Dupilumab weekly or every 2 weeks for 16 weeks is generally insufficient for achieving stable remission after cessation of therapy. And similarly, patients who discontinued their use of JAK inhibitors also quickly lose disease control and relapse. And in the [indiscernible] regimen trial, 81% of patients who switched to placebo after achieving an EASI-75 or an IGA response to 12 weeks experienced a flare. The next slide. Well, this is all punctuated [indiscernible] here, showing the EASI-75 response rate at the end of induction at week 12 and at the end of the study at week 48, 36 weeks after the end of dosing. In totality, approximately 70% of EASI-75 responders in the high-dose REZPEG group and 50% of the EASI-75 responders in the lower REZPEG group maintained their EASI-75 response for 36 weeks after the end of the 12-week induction period. This is a very exciting durability results after only 12 weeks of dosing and suggest that REZPEG may offer the first potential remitted therapy for atopic dermatitis. Next slide. There are a number of additional key measures of disease activity including body surface area involvement, BSA, which is a measure of the total amount of skin impacted by the disease and the impact of treatment. Also, the key patient reported outcome measures such as Dermatology Life Quality Index, DLQI, and the Patient-Oriented Eczema Measure, POEM, that Jonathan mentioned earlier as well. And both the DLQI and POEM measure the patient's assessment and overall impact and burden of the disease on their daily life. Next slide. Now this chart on the right shows the rapid and dose-dependent drop in percent change from baseline BSA for the 2 REZPEG groups and placebo. But you can really see the rapid drop for the 2 REZPEG groups. The LS mean results at the end of the 12-week induction period showed improvements from baseline of 36% for placebo, 55% for the 12 microgram per kilogram REZPEG group and 72% for the 24 microgram per kilogram group. The high dose group achieved a P-value of 0.0158 versus placebo. And for BSA, we also observed extended durability for the REZPEG groups long after the completion of the 12-week induction period. Next slide. The patient reported efficacy outcome or quality of life measure DLQI results are shown here. The chart on the right, again, shows the rapid and dose-dependent drop in percent change from baseline DLQI scores for the 2 REZPEG groups. The LS mean results at the end of the 12-week induction period showed dramatic improvement relative to 9% for placebo. We observed a 48% improvement for the 12 microgram REZPEG group and 78% improvement for the 24 microgram per kilogram REZPEG group. The high dose group at level achieved a P-value of 0.004 versus placebo. And once again, we observed extended durability for the REZPEG groups long after completion of the 12-week dosing period. Next slide. The results for the patient reported outcome POEM are shown here on this slide. Again, the chart on the right shows the rapid and dose-dependent drop in percent change from baseline POEM for the 2 REZPEG groups. And the LS mean results at the end of the 12-week induction period showed improvements from baseline of only 15% for placebo as compared to 44% for the lower REZPEG dose group and 58% for the higher REZPEG dose group, with higher REZPEG dose group achieving a P-value of 0.01 versus placebo. And again, as we've seen for the other endpoints, we've seen extended durability over the 36-week period after the end of the 12-week dosing period. Next slide, please. The itch numerical rating scale, or also known as Itch NRS, is another important patient-reported outcome measure for assessing atopic dermatitis in the impact of treatment. As David described that itch is a very key component of this disease and controlling that itch is an important hallmark for therapy. Now in this analysis, only patients with a baseline Itch NRS score of 4 or greater are included because itch NRS responders are defined as people with at least a 4-point or greater reduction in their Itch NRS scores. Now we observed a dose-dependent response on Itch NRS for the 2 REZPEG groups. The onset of Itch NRS response is quite notable. For example, after a single dose of REZPEG, approximately 40% of people in the high dose group achieved an Itch NRS response at week 2. As we saw for the other endpoints, this analysis also demonstrates the durability of the itch response reserving the REZPEG groups, again, especially highly pronounced at the high dose level. And in some reports, the week 12 induction results for Itch NRS were called out and is not sufficiently separating between placebo and the 2 REZPEG groups. And while this may be the case at the landmark of the 12-week time point, it's important to evaluate the totality of the data and compare the placebo and REZPEG groups across all the time points in the study. And from that assessment, it is clear that the REZPEG group is markedly different than placebo in terms of onset of action, consistent efficacy across time points both earlier and later than week 12 and the durability of the response, which is maintaining many people in the REZPEG groups, but quickly lost soon after the 12-week time point in the placebo. Next slide, please. Looking at the Itch NRS data using the appropriate populations for the week 0 through week 19 and week 19 through week 48 period, we can further see the durability of this Itch NRS response in the REZPEG groups, especially in the red line at the 24-microgram high-dose REZPEG dose level. Next slide, please. The validated investigator's global assessment or vIGA, is, of course, the key efficacy and registrational endpoint in atopic dermatitis. In this study, all patients had 3 or greater vIGA at the time of enrollment. And a vIGA response is defined as having a vIGA score of 0 or 1 and at least a 2-point reduction from baseline. As with the other endpoints, we observed dose-dependent increases to vIGA responders in the 2 REZPEG groups. The onset of action is noted as is the totality of data, showing the separation of the REZPEG groups from placebo. And it's almost like a broken record. But as we've seen for all the other endpoints, there is a strong durability of this response, especially at the higher dose 24-microgram REZPEG dose level. Next slide. Focusing on this data using the appropriate populations for the week 0 to week 19 and week 19 through week 48 periods, we have an even better picture of the durability of this vIGA response. For example, at the 24 microgram per kilogram REZPEG dose, 5 people achieved a vIGA response at the end of the 12-week induction and 4 people or 80% maintained their vIGA response at week 48, 36 weeks after the end of dosing. Next slide, please. The incidence of all treatment-emergent adverse events, or TEAEs, was similar between groups reporting 80% of patients receiving placebo, 63% receiving 12 micrograms per kilogram REZPEG and 77% receiving 24 microgram per kilogram REZPEG. The majority of the TEAE observed in the REZPEG treatment groups were characterized into the infections and infestations system organ class, with Coronavirus infection the most frequent adverse event. There were no serious or severe AEs related to REZPEG administration. No deaths occurred in the trial. Most of the study discontinuations due to AEs occurred in the REZPEG groups compared with the placebo. Injection site reactions were more frequently reported in patients receiving REZPEG versus placebo, most commonly slight to moderate erythema resolving within 3 days. There were no reports of conjunctivitis and no REZPEG antidrug antibodies detected at any dose or time point. No clinically meaningful changes in laboratory values, vital signs or electrocardiograms were reported during the study. Next slide, please. While cross-study comparisons are always a challenge, it is still something that we all typically do to contextualize and interpret study results and therapies. We generated this table in order to compare the results of REZPEG Phase 1b study shown today to the Phase 2 clinical studies for key biologic therapy comparators to REZPEG. Now firstly, REZPEG is an agonist drug that induces a Treg response, whereas all the other classes of drug here are antagonists of either cytokine or costimulatory molecules. And more importantly, the data obtained for REZPEG is highly competitive for these agents from the approved drugs, ranging from the DUPIXENT and ADBRY through IL-4 or IL-13 class, soon to be approved lebrikizumab in the same class and to the other mechanisms. So for example, the minus 83% EASI LS mean reduction from baseline is a very impressive result comparatively across to these other agents. So to summarize, today, we presented the final study results for the atopic dermatitis Phase 1b trial of REZPEG in patients with moderate to severe atopic dermatitis. Looking at the totality of data across the physician-assessed outcomes such as the EASI, BSA and IGA as well as the patient reported outcomes of Itch NRS, DLQI and POEM, we see highly consistent clinical effect across all of these parameters. Although this is a small Phase 1b study, we observed key features in the data, including a rapid onset of effect, dose-dependent response and exceptional efficacy for REZPEG that is highly competitive in this field. In addition, we observed durability of response in all of these endpoints for 36 weeks after the end of REZPEG dosing, providing a promising and potentially remitted therapy for patients with moderate to severe atopic dermatitis. Next slide. Based off these data presented today, we're initiating a Phase 2b study of REZPEG in atopic dermatitis. This study will focus on biologic naive patients, which is the same patient population with the same inclusion criteria that we studied in the Phase 1b. It will be roughly 400 patients in size with 3 different regimens of REZPEG versus placebo evaluated over a 16-week induction period. After the induction period, patients that meet a threshold to advance from induction to maintenance will be re-randomized into 1 of 2 maintenance regimens at different dosages at either a monthly [ 2 4-week ] or once every 3 months or 2 12-week dosing schedule, and these will continue for another 28 weeks. The whole study will take approximately 54 weeks to conduct, and we are on track to initiate this study in October. Next slide, please. Alopecia areata is an indication with a high clinical unmet need for a biologic as the only approved agents are JAK inhibitors, which as we discussed earlier in today's presentation, come with a black boxed warning and lack durability after cessation of dosing. Now for these reasons, we believe there is an opportunity for REZPEG to become a novel biologic therapy in alopecia areata. Now alopecia is a mixed cellular disease with more TH1 and TH17 and less TH2 involvement. We have data through our psoriasis into the studies that leads us to believe that REZPEG and its Treg mechanism of action has great potential for addressing these pathologies. Therefore, we believe there is strong rationale for a therapeutic agent like REZPEG and alopecia areata, and we are excited to unveil, our next indication for REZPEG will be alopecia, and we are initiating shortly a Phase 2a study evaluating this hypothesis. Next slide, please. This upcoming study plans to recruit roughly 42 adult patients with moderate to severe alopecia areata that will be randomized into the treatment arm of REZPEG or placebo. Patients will be treated for a period of 36 weeks and observed up to 48 weeks in total. Our primary endpoint of the study is mean percent improvement in [ SALT ] week 36, which is very standard in this field. We will also be looking at a number of other secondary endpoints, including proportion of patients who saw a reduction in SALT score. We're very excited about the final Phase 1b study results presented today and about our upcoming clinical plans for the REZPEG program, and we hope to provide updates as we further this molecule in clinical development. So with that, I'd like to open the call up for questions. Operator?

[Operator Instructions] And our first question will come from Jay Olson from Oppenheimer.

This is Cheng on the line for Jay. Also thank you for hosting the event. Very helpful. I guess my -- I have 2 questions. I guess the first question is to the KOLs. I'm just wondering where do you think REZPEG can fit into the current treatment landscape? And how will you use REZPEG if it is approved? And basically, if it is second-line option, how would you choose between REZPEG and other options like JAK inhibitors? And also, I'm wondering it is fair to say or reasonable to say that REZPEG has disease modification potential? And I have a follow-up.

So Raj, since you discussed a lot of the landscape, standard of care and other agents, would you like to address the first question?

Sure. I'm happy to. So I think that it's important to understand in the case of atopic dermatitis, so much of medication decisions are made through shared decision-making with health care providers and patients. And so there is a lot that goes into talking about what maybe some of the plus sides are and minus sides are of any particular therapy with a particular patient. That being said, in the case of REZPEG with the data we have right here, I think your question was sort of thinking about first line, second line, how it fits. At the end of the day, if you're looking at patients who haven't had an adequate response to topical therapy, if a biologic, which we know in general has been positioned as first-line moderate to severe therapy, one that perhaps offers patients the ability to have either changes in a dosing protocol that they're used to or perhaps even longer lasting effects with therapy, there's really no reason to think why this isn't going to be one of the first therapies that you discuss with your patient. Now obviously, it's very early to be having that discussion. But at least that's the way I see it at this point in time. And safety is going to be an important part of this whole story. But obviously, avoidance of the boxed warning situation like we've seen with JAK is probably going to allow really any therapy of REZPEG or otherwise to be put alongside some of the others we have like Dupilumab and tralokinumab in that space.

And Jonathan, would you like to add anything to that?

Sure. Yes. I mean, I agree with everything Raj said. I would add, I think to just amplify it, I think there's a lot of potential, both first and second-line use. First line, obviously, we need later phase studies, and we want to see these results we produce. But with these results, these are highly competitive. I agree with JZ's terminology earlier. And I think these results actually look better than some of the other agents that are out there right now. The shared decision-making concept is very important because there's something for everyone. The -- but as we think about sort of 2 paradigms -- let's assume for a second -- well, there is one possibility, certainly that this could be used first line even ahead of Dupilumab. I think we need more data to be able to sort of clearly define that whether or not that would be the case. But the second line market here, the second line usage, the size of that market is staggering still. And so there's a lot of opportunity unmet needs there. There -- I think there's going to be sort of 2 broad paradigms that evolve. Some may feel like, well, we'll cycle through type 2 blockers because we're familiar with that mechanism. And likely some of those drugs will work in, let's say, patients who filled Dupilumab or had an inadequate response. You still may get lucky on some of those other drugs. I think logically, many will say, well, go [Technical Difficulty] to the same mechanism or arguably the same mechanism if I've got another safe, clean mechanism to turn to, that's highly effective. So I think for many, as long as the safety hold up, that they're logically going to turn to an alternate mechanism. So I think that's going to be a big dose. I think for second line for sure, lots of utility. But even for the first one, I think there is a real opportunity to snap some of that market, particularly because if we've got comparable efficacy or better at week 16 -- we don't have the conjunctivitis, we don't have the facial erythema, and you've got that potential for disease modification, I think that's a winning argument for patients because would they rather be on the medication that they do well on, but they can never really come off of, or would they rather be on the medication that there really is a path for them to discontinue and maintain that control. And I think the latter is the obvious choice. Probably the first or second question out of almost every patient's mouth is how long will I have to be on this medication for? Whatever the biologic might be and whatever the immune-mediated disease. And when you've actually got an opportunity to potentially talk about disease modification and an ability to eventually discontinue with lasting results, that is definitely a winning proposition for patients.

Yes, I'd like to chime in also, and I completely agree with what Jonathan said, that this is a medicine that you'll tailor to the individual patient and will certainly be used, I think, second line and many patients first line. If a patient has multiple diseases, for example, say they have alopecia areata and atopic dermatitis or they have psoriasis and atopic dermatitis, that may be a reason to use this medicine over others. Also, patients who have a very active lifestyle, and if they travel a lot, for example, they may not want to bring their medicine with them and they may not have to worry about injecting while they're on a trip. And having that ability to have a remission is really great for patients. They love that idea. So I just want to echo what Jonathan said. I think he's completely on point.

And one other thing, just as a perhaps minor point, but I don't think it's trivial as -- even if we somehow -- we don't see disease modification ending up in the label. At the very least, we're seeing an opportunity for a dosing advantage. So even if patients are staying on drug, they have a better dosing frequency and interval, is still a major win for patients and more patient friendly.

I think, operator, we can go to the next question.

And our next question will come from Charles Ferranti from Goldman Sachs.

Thank you to the KOLs for your time today to speak with us about the REZPEG future. So maybe just a question on the future development path for REZPEG for the Nektar team. Just wondering -- I know we're just getting started with the Phase 2b, but if we think about a Phase 3 trial, are we going to be expecting a potential for another recruitment of a biologic naive population in this trial? Or should we expect maybe a broader population that is biologic experienced as well to get a sense of maybe how REZPEG might be utilized in a broader population in the future?

Sure. So it's a little early to ask questions like that, but we can share with you our thoughts and scope. We certainly have a high belief that REZPEG has -- with its mechanism of action, has the potential to be active in both first-line and biologic naive patients and also in later lines of biologic experienced patients. And as we've discussed today, the mechanism of those patients, whether they're IL-13 inhibitors or even other T cell targeting agents or target other cytokines, we really believe that a Treg mechanism offers potential in either setting. And was definitely something that we will incorporate into our future development plans as well as our aspirations for the broadest possible label for REZPEG. As we think about that and some of those decisions, I'll also remind everyone that our expectation for data timing from the Phase 2b study in a [ atopic dermatitis ] is in the early part of the 2025 time period approximately in the second quarter of 2025. Next question?

And our next question will come from Mara Goldstein from Mizuho.

So I wanted to ask a question about the notion of remission and how it would be formally measured in the clinical setting? And what would essentially be a clinically meaningful benefit from a practical perspective?

I think, Raj, can I ask you to comment first? And then I think, Jonathan and David, please also add in, because I think this is a really wonderful question.

Yes. Happy to take first stab, and I know that Jonathan and David have good things to say. So because this is such a novel concept, we oftentimes behind the scenes debate about what is the best way to actually measure this. And really, in the dermatology world, there's only been one drug in recent times that have tried to even sort of qualify what remitted effective, it's a topical therapy for psoriasis. And then the way in which that they tried to look at this was among people who had complete clearance of disease, what was the median amount of time it took for them to reach a point of having mild disease, essentially sort of how long could they stay clear or almost clear. And in that case, that was around 4 months. You could imagine that since that's the one operating definition out there that the FDA checkmark, that could be one way to look at this, where you would simply be taking an examination of people who reach a certain benchmark, how long it takes them to either lose the benchmark or a certain percentage thereof. And in the case of atopic dermatitis, it's not just actual inside, so you probably would need to take a look at either composite measure or individual measures that can actually look at this together. So it couldn't just be an EASI score, for instance. This looks at skin severity plus body surface area. You probably would need some analysis of longer-term control of itch in terms of people having longer lasting itch improvement. You probably would need some other patient-oriented domain, perhaps something like the POEM, which you just saw, is one way to look at a combination of these things from a patient perspective. But I think the big question is going to be, what is the appropriate time frame to measure? And I think that's probably still a bit of a question and maybe one that the Phase 2 trials are going to clarify a bit for us, because at this point in time, you sort of have a smaller population, you have sort of between 12 and 48 weeks. And so maybe the operating time frame there is going to be at least half a year, if not longer. But that's at least the way I see it. The big point is going to be any way you do this with atopic dermatitis, it's going to have to incorporate signs and symptoms in some actual patient perspective. And probably there's going to be a little bit of guesswork to figure out what is the right time frame to be looking at those.

Yes, I agree with this. I mean, I think there's sort of 2 broad, I guess -- or 3 broad stakeholder groups that you would think about with this. I mean from -- now, you believe the only one that matters is the FDA, the regulatory agencies. From the FDA perspective, everything lives and dies by these IGA scales. None of us really agree with it, but in the world -- academic world, that's where it's at. So the co-primary and Phase 3 registration trial will be an IGA clear, almost clear. And so that becomes your treatment response. And once you get that response, then it's a matter of how long can you [Technical Difficulty]. I think the exact analytic approach or the exact definitions are still sort of being sorted out, and there are other programs that are trying to sort of figure out and we'll learn from there what the -- where the agency lands with that. I agree with Raj about topical tapinarof being a good precedent to look at. And in terms of their definition of something -- though a systemic is inherently different than a topical, but conceptually, I think there's good precedence there. The -- and then you see if they can maintain that off of topical therapies and reduced number of flares, et cetera. So I think that's probably the definition that would end up being label enhancing. The -- there's a whole lot more information that the medical community will crave and certainly patient community might be interested in. That would be secondary or exploratory endpoints in any maintenance phase of the study. But most importantly, if this can be label enhancing, and I expect it can be, that's, I think, going to allow us to then discuss it, not only at the medical CME podium, but also from a commercial education perspective, which becomes very important and an opportunity for differentiation.

Yes. I agree what Raj and Jonathan were saying that I think the trial is almost certainly going to be designed with IGA in mind. However, in clinical practice, I think it's -- it will likely be itch that drives what patients end up doing. So if they start to get itchy again, that's when they'll really need their next injection. Even though for the trial, it will be based on IGA.

Yes. And Mara, one thing I'll add from the Nektar perspective, I think one of the really exciting features of the study data presented today is it gives us a lot of flexibility when we start to consider the maintenance dosing regimens. And one really big step forward that we're very excited about in the Phase 2b trial design just discussed, is that we're including a once every 3-month dosing regimen. So, on the face of it, that's highly differentiated from other maintenance regimens in terms of the convenience to the patient. But also, we feel confident based on this data that we'll maintain adequate disease control based on what we've seen when the patients have a drug-free period of 36 weeks. So that's definitely one of the steps forward that we're excited to continue to explore in the program. Next question?

And our next question will come from Roger Song from Jefferies.

Thanks for this very informative presentation. So maybe just 2 quick ones. So one is for the [ AD ]. I think -- in the earlier discussion, I think the KOLs mentioned a couple of endpoints. I'm just curious, from a clinical perspective, what -- how would you weigh the importance across those key efficacy end points in terms of EASI-75, 90, maybe the 100 and the vIGA and NRS? And another question is -- related to that is REZPEG, based on the current data and its mechanism, which endpoint you think it can be stand out to be superior against all the competitors?

Jonathan, can I ask you to comment on these 2 questions, please?

Sure. I mean I think it's an excellent question. I think the answer may not be satisfying at least for the first part of the question in the sense that I don't ever look at just a single endpoint. I mean I think you have to look at the totality of evidence because -- and it's highly relevant to stuff that's being developed in the field right now where maybe it will work for itch, but not lesions or vice versa. And that leads holes. And so it's very reassuring here to see nice clinical responses both on the lesions and on the itch. I certainly don't think of this as an exclusively itch-related drug. This is something that should work on the inflammatory pathways that are driving lesions, but you're seeing not only fast responses on itch, but very durable responses on itch. So I look at the totality. I think the -- I would -- just thinking about what can be discussed -- what's label enhancing and what can be discussed at a -- from a commercial strategy perspective, it's going to be the things that the regulators care about. So IGA in the U.S., EASI-75 and beyond, more robust than that ex-U.S. as Coprimers and then 4 point reductions in itch and even more. And of course, we'd love quality of life from all kinds of other measures, but those are all just supportive from a label perspective or not even ending up in the label in many respects. So those would be the 3 key ones, and you saw the results, and I think they look very good. But in the case of the EASI score, 83% reductions in EASI are some of the best we've seen period across the entire field of atopic dermatitis. So I think that really establishes the competitive nature of the results. So this is -- to me, I look at not just the EASI but everything, and I see something that really is competing in this space. There was, I think, maybe a second -- separate part to the question, but that's probably, I guess, the overall sort of [ gestalt ] answer to your questions.

I agree with Jonathan. No one scale fully tells the story. So you really need to look at all of them. And in terms of the competitive advantage, I would say that the remission is high up there, and then also the safety signal. So not having signals for eye symptoms and facial redness, I think that, that goes -- that also will go a long way. So those 2 in particular.

Next question?

Our next question will come from Greg Harrison from Bank of America.

Thanks for the update today. Maybe could you talk about your expectations for enrollment in the Phase 2b? And how you would describe the response so far from potential investigators, especially since you've announced the updated data?

Sure. Mary, our Chief Medical Officer, is on the call. Mary, can I ask you to comment on Greg's question?

Sure. So we have been sharing the updated data with new investigators who are very excited about the clinical study. We will have over 100 investigators participating in the study. And as JZ mentioned to you, we expect data in the second quarter of 2025. I think the things that investigators have shared that they're very excited about the data are things that Jonathan and David and Raj have highlighted, which is what Jonathan just said. Number one, this really looks like -- and Jonathan coined this term best-in-industry, not just a best-in-class drug. And number 2, they do like the fact that the study is designed to allow patients move to a maintenance period. Not all Phase 2 clinical trials go beyond the induction phase. And so I think for patients -- and to answer a question that has been raised by Mara and others, how do you determine the benefit over time. This study really allows us to answer not only the induction period but maintenance period. And of course, we've talked about it, the remitted effect that we've seen in the Phase 1b is attractive along with the safety profile of the drug, where we're not really seeing systemic effects and patients are able to tolerate the treatment.

I also wanted to just ask quickly, is there a path forward in pediatrics? And how would that market and urgency, the treat differ from the adult population?

Yes. So that definitely -- in the overall aspirations and development plans for REZPEG, definitely pediatrics is a key component. We'd like to -- as we've discussed earlier in the presentation, this is a disease with a higher prevalence in children. And if you look at even the development of DUPIXENT over time, they've reduced the age [Technical Difficulty] so younger people. So that will definitely be also a component of our long-term strategy and our overall ambitions to make REZPEG available to as many people with these kinds of diseases, acknowledging the fact that they're diseases of your entire life starting from childhood. Next question?

Our next question will come from Boris Peaker from TD Cowen.

I mean there's been a lot of discussion, obviously, around the durability of response here, and it obviously seems pretty good from 12 to 48 weeks. I'm just curious if the mechanism of action is activation of Tregs and increasing Tregs, how long do they normally last? And what's kind of the normal time frame for Treg to return normal once the IL-2 stimulus is removed?

Yes. So they definitely don't have a lifespan of 36 weeks, if you're wondering that. That's quite unusual outside the plasma cells. There really aren't that many cells that you can [ live ] into the 6-month range. So we really don't expect the Tregs would still be around. However, we do know that you can have some long-lasting effect. One of the things that we tried to model in the preclinical experiment that we showed in the presentation today is that in the mouse which has roughly a 12-month life span, 1 month is a considerable amount of time in the mouse's lifespan. But you could see a pretty profound maintenance of effect and the preservation of expressed immune reaction to the antigen that was originally kind of educated when we gave KLH with REZPEG in the first period of that study. We know that there were infiltrates of Tregs into the years in those animals. And we could see other kind of systemic immunological changes. So we believe that if you have the potential of having a disease-modifying effect, you'd have to ultimately get at the underlying drivers of the immune dysfunction. The Tregs do that in an antigen-specific way, although we don't necessarily know what are the driving antigens in a disease like this, but it's definitely something that can have a long-lasting effect. And we were very excited when we saw that in this study in atopic dermatitis, and it matched the preclinical studies that we did that suggested that hypothesis could carry forward.

And my second question on the alopecia study. What's the time line there for same data?

Sure. I'll ask Mary, if you'd like to comment on that as well?

Yes. We've mentioned that we'll have data from the Phase 2b study in atopic dermatitis in the first half of 2025. And we believe we'll have data for the alopecia study soon after we announced the data from the atopic dermatitis study.

[Operator Instructions] And our next question will come from Julian Harrison from BTIG.

Congrats on these data. The positive dose response across multiple endpoints looks very encouraging. So I'm curious if you see any potential here to dose about 24 micrograms per kilogram in future studies? And then for the dermatologists on this webcast, I'm curious how much conjunctivitis and facial redness affects adherence to DUPIXENT? Also, how big of a difference do you see between clinical trials and real world experience there? And what does this mean for REZPEG?

Sure. So I'll answer the first question. So in our earlier clinical studies, we did dose slightly higher than the 24 microgram per kilogram dose. We dose up to 28 microgram per kilogram dose in our first-in-human studies. But we'd like to keep that dose level of 24 micrograms per kilogram as sort of the upper dose range for this -- for REZPEG. So that's to your first question. To the second question about experience with DUPIXENT as well as adherence relative to the side effects, maybe David, if I could ask you to go first on that. And Jonathan, please comment afterwards.

Sure. So in the clinical trial, it's around 10% to 15% may get the conjunctivitis on DUPIXENT and sort of IL-13 as we're seeing roughly in that range of close to 10% as well. I think that's true in the real world. But the majority of patients get mild symptoms and it's not enough for them to say, "I can't be on this medicine." They say, "I love this effect on their skin." And so they -- most of them will continue on the medicine. They may get steroid eye drops to try to help. But there are a few percent that do go off the medicine because their eye symptoms are more severe. So I would say it's -- in practice, it's a few percent that will go off DUPIXENT because of the eye symptoms, even though it's a higher percentage that actually get those symptoms overall. If you have more alternatives, there may be more motivation for more patients to switch.

I'm happy to add to -- I mean, I agree with that overall. There's still a debate how commonly these patients get conjunctivitis. It's sometimes hard to know for sure when is it just -- because they have found the complications of atopic dermatitis versus when is it to Dupilumab. There tends to be a little bit of a partitioning also a difference between the private practice setting and in the academic world. Like in my practice, you would think everyone gets conjunctivitis and red face. And I recognize it's not the case everywhere, but it certainly is an issue that comes up a lot in my clinical setting. I would add to what David mentioned about the conjunctivitis by saying the conjunctivitis was seen in the clinical trials and it's probably just as common or more common in the real world. But there was something that as an investigator of the Dupilumab studies, I look back, and I don't say this proudly, but we missed a side effect, which is this red face [Technical Difficulty] staring us in the face in the trials, we just didn't realize because we just all assumed that it was partially or refractory atopic dermatitis. But there's an additional side effect there with this red face that happens where they can clear 100% from the neck down, but the face becomes an untenable situation. And so that adds on another few percent of patients who are motivated to change. I do think it's a moving target in terms of patients' willingness to stay on drug. 5, 6 years ago when Dupilumab first came out, I worked really, really hard to keep patients on Dupilumab and -- because what else did I have to offer them. And I -- for many patients, I'm still doing that, if that's their preference. But more and more with increasing options, I see it on a day-to-day basis, patients are saying, "I'm tired", like "let's try something else", as long as they don't see the safety trade-off, right? If the alternative was the oral JAK inhibitors, some chose them, but some said, "You know what, I'm just still too scared at that side effect profile". "Let's stay on Dupilumab and find a way to make it work." But now with other options, and I think with REZPEG as a clean mechanism and an alternate mechanism of action, I think the drug for assistance on Dupilumab is going to drop because patients -- why should they stay on it if they've got something else or multiple other options to turn to. So I think we will see that frame shift over time. And I think as there's more awareness and education around the conjunctivitis and that the newer options don't have the conjunctivitis, I think it will start to become an important distinction point in clinical practice. Right now, it's not that much of a distinguisher because what [ do ] you [ get ]? You have tralokinumab, which has conjunctivitis, maybe a little less, but still is conjunctivitis, and you'll have lebrikizumab coming, which also is conjunctivitis, maybe even a little bit more or similar to Dupilumab. So at this point, it's not on anyone's clinical radar, but give them a reason to make it on the radar, and I think it could be a big clinical consideration for treatment selection.

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

Thank you, Crystal, and I'd really like to thank David, Jonathan and Raj for joining us today and sharing your very important insights and expertise with our audience. I know it was greatly appreciated. And also thank you to JZ and Mary for presenting and answering questions. And we're looking forward to starting up the Phase 2b study and continue to keep you updated on the progress that we're making with REZPEG. Thank you all for joining us today. Bye.

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