Good day, and thank you for standing by. Welcome to the Nektar Therapeutics Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand it over to your speaker today, Vivian Wu. Please go ahead.

Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. With us on the call are Howard Robin, our President and CEO; Dr. Jonathan Zalevsky, our Chief of Research and Development; Jill Thomsen, our Chief Financial Officer; and Dr. Brian Kotzin, our Chief Medical Officer. On today’s call, we expect to make forward-looking statements regarding our business, including statements regarding the therapeutic potential of and future development plans for drug candidates in research programs; the timing of the initiation of clinical studies and the availability of clinical data for our drug candidates; the timing and plans for future clinical data presentations, the formation, future development plans or success of our collaboration arrangements; the expectations following our corporate restructuring and reorganization, financial guidance and certain other statements regarding future of our business. Because forward-looking statements relate to the future, they’re subject to inherent uncertainties and risks that are difficult to predict, many of which are outside of our control. Our actual results may differ materially from the statements. Important risks and uncertainties are set forth in our Form 10-Q that was filed on August 5, 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 development or otherwise. A webcast of this call will be available on the IR page of our Nektar website at nektar.com. With that said, I would like to hand the call over to our President and CEO, Howard Robin. Howard?

Thank you, Vivian. Thank you to everyone for joining us today. During the third quarter, we continued to make meaningful progress toward execution of our new strategic plan directed to the fields of oncology and immunology with a sharp focus on 3 core R&D pillars, NKTR-358, NKTR-255, and our research activities. With NKTR-358 and NKTR-255, our biologic clinical pipeline is poised to generate value-enhancing clinical trial data beginning in 2023 and continuing through 2025. Importantly, our plan provides us with a cash runway through the middle of 2025. And this is exclusive of any potential future cash inflows from new partnering activities. Each program in our pipeline provides us with a distinct and highly promising opportunity to provide patients with novel potential medicines across a range of therapeutic areas. And we’re already starting to see encouraging data across our portfolio. This past quarter, we reported positive data for our clinic stage program in immunology, NKTR-358, now known as rezpegaldesleukin or REZPEG. In the setting of atopic dermatitis, REZPEG is being developed with our partner, Eli Lilly, and multiple autoimmune diseases. In addition to atopic dermatitis, we’re also pursuing lupus. We have plans to go into at least one additional indication, and we look forward to announcing that new indication in the coming months. Our lupus Phase 2 study, which enrolled about 280 patients, is expected to report topline data in the first half of 2023. The important Phase 1b data in atopic dermatitis patients that were presented in Q3 will shape the robust Phase 2b study in this setting, which is planned to start also in the first part of 2023. The design for that study is being finalized now, and Brian will provide further information on the REZPEG program in a moment. Our second significant clinical program is NKTR-255, our novel wholly-owned IL-15 agonist being developed in both liquid and solid tumor settings. In large B-cell lymphoma, we’re on track to initiate our own sponsored study of NKTR-255 in combination with approved autologous CD19 CAR-T products. The study is designed to demonstrate the potential of NKTR-255 to enhance the efficacy benefit of these therapies. This Phase 2/3 trial will be a randomized, double-blind, placebo-controlled study comparing NKTR-255 versus placebo in relapsed or refractory patients being treated with CAR-T cells. It will position us for key comparative data in 2024 for NKTR-255 in second line and third line large B-cell lymphoma, which is the label indication for these approved CAR-T products. In multiple myeloma, we plan to present the data from the first several patients enrolled in our study of NKTR-255 in combination with DARZALEX FASPRO at the upcoming ASH meeting in New Orleans. The study is continuing dose escalation, and we’re encouraged by the early data we see that continue to support the biologic mechanism of NKTR-255. Specifically, we’ve observed that NKTR-255 can restore blood NK cell levels after DARZALEX-mediated NK cell clearance. Finally, the JAVELIN Bladder Medley Phase 2 comparative study in combination with avelumab began actively enrolling patients in the third quarter. Our partner Merck KGaA is running this study, and we’re on track to generate PFS data for this study by the end of 2024. In research, we’re working on a novel TNFR2 antibody that we believe will be highly differentiated from anything in the field and holds great promise as a next generation selective Treg agent in autoimmune diseases such as multiple sclerosis and inflammatory bowel disease. This will be the first antibody program in our pipeline, and we’re focused on advancing this important new mechanism to be prepared for IND-enabling studies in 2023. Additionally, we’re continuing to advance our preclinical work in oncology. NKTR-288 is a novel PEG conjugate of interferon gamma, designed to modify the binding of interferon gamma to its receptor and non-receptor substrates and optimize the duration of interferon gamma signaling. Next week at SITC, we will present the first set of preclinical data for this program. We ended the third quarter with approximately $546 million in cash. As I stated earlier, we’ve implemented a strategic plan which enables us to have a cash runway through the middle of 2025. We do not anticipate a need to raise capital during this period. We’re well funded with a strong financial position, which will enable us to drive our key programs forward to value-generating data and milestones. And now, I’d like to turn the call over to Brian to provide an update on REZPEG. Brian?

Thank you, Howard. REZPEG is a unique molecule, and I am truly excited about the work we are doing with our partner, Eli Lilly, on this important first-in-class Treg stimulator for the treatment of autoimmune and inflammatory diseases. Our goal with this program is to address the underlying Treg deficiencies and consequent over activity of effector T cells in these diseases by selectively activating and expanding Tregs. Unlike immunosuppressive drugs, REZPEG is designed to bring the immune system back into a normal balance. The data we recently presented in atopic dermatitis continue to reinforce our conviction in this approach. As Howard mentioned, this past September at the EADV Congress, full data from our first initial proof-of-concept study and moderate-to-severe atopic dermatitis were presented. The 12-week Phase 1b study conducted by Lilly tested 2 doses of REZPEG compared to placebo, and then followed patients for 36 additional weeks after the last dose of therapy. Treatment with REZPEG showed a dose-dependent reduction in Eczema Area and Severity Index Scores in patients, also known as the EASI score, with approximately a 70% reduction in scores at week 12 at the highest dose tested. We also saw a trend toward a dose-dependent improvement in the investigator global assessment for atopic dermatitis and its responder rates through week 12 of treatment. Consistent with the REZPEG mechanism of action, total Tregs and CD25bright Tregs increased versus placebo through week 12. The efficacy observed in the 12 weeks of treatment with REZPEG is in line with efficacy observed after 16 weeks of treatment with DUPIXENT, the current standard of care for moderate-to-severe disease. But clearly, the most fascinating observation from the study was that when we looked at patients 36 weeks after we stopped dosing REZPEG, their skin scores and other measurements of disease remained very low. This is an effect that is not observed with DUPIXENT. This has us and Lilly very enthusiastic about the potential for long-lasting responses and infrequent maintenance dosing with REZPEG in the setting of atopic dermatitis. When we began this program at Nektar, our hypothesis was that restoring Treg populations in Treg-deficient patients would restore the normal balance in the immune system and potentially provide a disease-modifying therapy. Along with Lilly, we coined the term resolution therapeutic to describe the mechanism of REZPEG. We are excited to see the long duration of sustained response observed in the atopic dermatitis study consistent with this hypothesis. Additionally, we are encouraged by REZPEG's safety profile, as no serious or severe adverse events were reported from patients treated with REZPEG. These collective data support our plan to initiate a Phase 2 study in atopic dermatitis together with Lilly. This will be a relatively large placebo-controlled study. We expect the design of the study to be completed by the end of the year, and the study to start in the first part of 2023. REZPEG is also being evaluated in a Phase 2b study in patients with continued active lupus despite being on standard background therapies. As a reminder, this Phase 2 study evaluates three dose levels of REZPEG compared to placebo, and approximately 280 patients for a 24-week treatment period. The study is fully enrolled, and we are on track to report data from the study in the first half of 2023. Lastly, Lilly is also planning a third Phase 2 study in a yet-to-be-announced autoimmune indication, which we hope to unveil in the coming months. We have a number of important milestones for REZPEG in 2023, and the compelling data generated to date reinforce our confidence in this program. We are looking forward to our continued collaboration with Lilly. With that, I’ll hand the call over to JZ to discuss NKTR-255 and our preclinical programs. JZ?

Thanks, Brian. Our therapeutic candidate NKTR-255 is an agent that engages the full biology of the IL-15 pathway to provide functional activation and homeostatic control of IL-15 responses of immune cells, namely natural killer cells, CD8 T-cells and immune memory subsets. As a full agonist of the IL-15 pathway that can signal to both signal and transpresentation, the trimeric IL-15 receptor complex; NKTR-255 can be combined with multiple mechanisms ranging from targeted agents to cell therapies including CAR-T and even checkpoint inhibitors to potentially improve the efficacy of these agents. We are pleased to be presenting the first data for NKTR-255 in combination with DARZALEX, in patients with multiple myeloma at ASH. This combination study of NKTR-255 with DARZALEX is a key biological proof of mechanism study for NKTR-255 because of the unique consequences of the DARZALEX mechanism of action. DARZALEX is the CD38 targeting antibody that depletes CD38 positive cells through ADCC mechanism. DARZALEX is effective for the treatment of multiple myeloma because stem cells, which are the pathogenic tumor cells in multiple myeloma, express CD38 on their cell surface and are effectively targeted and depleted by DARZALEX. However, NK cells also express CD38 on their cell surface, and these cells are also directly targeted and depleted by DARZALEX. Since NK cells are the critical immune effector cells that execute the ADCC mechanism, the emerging hypothesis is that restoring NK cell levels during DARZALEX treatment may be beneficial. Consistent with this hypothesis, last summer, we published a paper in Blood Advances with our collaborator, Dr. Nikhil Munshi at Dana-Farber that showed NKTR-255 when used in combination with DARZALEX substantially potentiated the efficacy of DARZALEX against multiple myeloma cells in a number of in vitro and in vivo preclinical models. As mentioned by Howard, we’re very encouraged to see that the early patients in the NKTR-255 and DARZALEX combination are demonstrating NK cell recovery in the peripheral blood within days after starting NKTR-255 administration. This proof of mechanism study is continuing to enroll patients. As we stated in the past, we will wait to assess the mature data from dose escalation before making a final determination on any investment in future ADCC combination work in this setting. We are also focused on pursuing NKTR-255 as a potentiator in the landscape of cell therapy. Since their first approvals years ago, the usage of autologous CD19 chimeric antigen receptor T cells or CAR-T therapy has grown significantly in the B-cell lymphoma treatment landscape. Although, these therapies offer great treatment benefits for those patients who fail first or second line treatment, many patients tend to relapse over time post-treatment with CAR-T. There is a high unmet need to provide both an extended duration of response and to drive a higher frequency of complete responses. We have conducted numerous preclinical studies using multiple autologous CAR-T therapies. Demonstrating that the addition of NKTR-255 can drive cell proliferation and expansion in the presence and absence of antigen as well as maintain CAR-T cell functionality and sustain their survival by limiting cell death pathways. In multiple myeloma preclinical studies, the combination of NKTR-255 plus CAR-T is far more effective than CAR-T alone in clearing tumors using graft models. Consequently, our clinical hypothesis is that the addition of NKTR-255 to the CAR-T regimen may increase CAR-T cell levels leading to enhanced efficacy. As Howard said earlier, we are on track to initiate the Nektar-sponsored study of NKTR-255 combined with approved CAR-T therapy. Next month at ASH, we will unveil the trial design of this Phase 2/3 study in patients with relapsed or refractory diffuse large B-cell lymphoma. The goal of this study is to generate comparative data with NKTR-255 plus CAR-T cells versus placebo plus CAR-T cells. Our target is to initiate the first clinical sites in the study by the end of this year, and as Howard stated earlier, we are expecting initial data in the second half of 2024. We already have two studies underway with external collaborators to evaluate NKTR-255 in combination with CAR-T therapy. The first study is sponsored by Dr. Crystal MaCkall, who is the Founding Director of the Stanford Center for Cancer Cell Therapy and is combining Stanford’s proprietary CD19, CD22 bi-specific CAR-T cell therapy with NKTR-255 in patients with relapsed or refractory acute lymphoblastic leukemia. The second study is being conducted by Dr. Cameron Turtle’s Lab at Fred Hutchinson Cancer Center. Fred Hutch is combining NKTR-255 with Brian’s team, and relapsed or refractory large B-cell lymphoma patients. The goal of these two studies is to demonstrate the pharmacodynamics and safety of NKTR-255 cell CAR-T therapy in patients. Specifically, our objective is to demonstrate that NKTR-255 promotes CAR-T cell expansion and duration of persistence with repeated treatments. Additionally, the studies will assess the full safety profile of NKTR-255 when beginning the treatment shortly after the onset of CAR-T cell therapy. We expect to have results from the first several patients in the study in 2023. Another focus area for our development plan for NKTR-255 is the work being conducted with Merck KGaA, who has initiated the JAVELIN Bladder Medley study. This Phase 2 randomized open-label study compares avelumab combinations with three antitumor agents; NKTR-255, Fidelvi, and one of Merck’s owned anti-TIGIT therapeutic candidates. The study tests NKTR-255 as a maintenance treatment for bladder cancer in patients whose diseases have not progressed following the platinum regimen. Avelumab is annualizing at about $500 million revenue run rate in this setting, and the study gives NKTR-255 a possible path to a future registrational trial in this setting, based upon the strength of the data generated in this Phase 2 study. We expect the first potential PFS data from the Phase 2 study in late 2024. Now, turning our attention to our preclinical research programs. We are cultivating our research pipeline with the near-term focus on biological programs that have applications in oncology and immunology. One of the programs we are working on is NKTR-288, a PEG conjugate of the protein interferon gamma. Interferon gamma is a cytokine that induces cellular antigen presentation and enhances tumor antigen-specific cytotoxic T cell responses, which may have applications in a number of therapeutic areas, including oncology and infectious disease. With NKTR-288, we have designed a site-specific conjugate of PEG’s protein in order to modify the binding of interferon gamma both with its beta receptors, as well as other binding substrates. Overall, this design enhances and prolongs the pharmacodynamic duration of interferon gamma signaling. In our preclinical studies, NKTR-288 increased MHC class 1 and PD-L1 expression on tumors and enhanced the antitumor activity in mouse models when combined with anti-PD-1 or PD-L1, and also worked as a single agent. We look forward to presenting additional data for our NKTR-288 program at SITC next week. We are also continuing our preclinical work on our Tumor Necrosis Factor Receptor 2 Program or the TNFR2 program in collaboration with BioLogic Design. The goal of this program is to generate novel antibodies that are selective agonists of TNFR2. TNFR2 is the key receptor that signals exclusively through transmembrane TNF-alpha to suppress inflammation and promote tissue protection and repair. One key role of TNFR2 is to promote Treg stability, homeostasis, and function in diverse anatomical tissues. We have leveraged our understanding of Treg biology, and in particular, their responsiveness to IL-2 signaling versus NF-kappa B signaling to drive the TNFR2 antibody discovery in collaboration with BioLogic Design. A TNFR2 agonist could have applications for a number of autoimmune and inflammatory diseases, including multiple sclerosis, inflammatory bowel disease, arthritis, as well as antibody-mediated autoimmune diseases. We look forward to keeping you updated on our progress if this program matures. And with that, I will turn the call over to Jill for a review of our financial guidance. Jill?

Thank you, JZ, and good afternoon, everyone. We ended the third quarter with $546 million in cash and investments and no debt. Our 2022 financial guidance remains unchanged, and we expect to end the year with approximately $450 million in cash and investments. We rapidly executed our restructuring and strategic plan beginning in April. Because of this, our financial position remains strong with a cash runway that extends through the middle of 2025. This will take us through several key value-generating milestones for our pipeline. Our team has worked diligently to execute an efficient operational wind down of the BEMPEG program consistent with our obligations to patients and their physicians. In accordance with that plan, all patients on the six Nektar run BEMPEG studies have now transitioned to standard of care or other post-trial treatment options. Now, I’d like to remind you of our financial guidance. Our full-year GAAP revenue guidance is unchanged and expected to be between $85 million and $95 million, which includes approximately $20 million of product sales and $70 million to $75 million in non-cash royalties. We still expect to recognize a total of approximately $150 million to $160 million in restructuring and impairment charges related to the BEMPEG program termination. Our R&D expense is still expected to be between $240 million and $250 million, including $40 million to $45 million in non-cash depreciation and stock compensation expense. Our G&A expense is still projected to be between $90 million and $95 million, including $25 million to $30 million in non-cash depreciation and stock compensation expense. Finally, our non-cash interest expense is expected to be between $25 million and $30 million related to the prior monetization of our royalty stream. I’d like to reiterate that we still plan to end the year with approximately $450 million in cash and investments. And with that, we will now open the call to questions. Crystal?

Thank you. Our first question will come from Jay Olson from OpCo. Your line is open.

Hi, this is Chen on the line for Jay. Thanks for taking the question, and congrats on the progress. Maybe on the REZPEG, just wondering how you are thinking about the unmet need that can be potentially addressed by REZPEG? And if you think the target population could be those who do not respond well to DUPIXENT? Additionally, if I can ask about 255 questions in combination with CAR-T? I’m wondering what your expectations are for the additional benefits, whether you are planning or hoping to see higher response rates, say, at month 6, in which patients may remain disease-free for a longer time. Thank you.

Thank you for the question. In atopic dermatitis, it’s important to emphasize that the mechanism of REZPEG is completely different than any of the other therapeutics now being studied. Because of this, it seems very possible that patients who do not respond to standard of care therapies, for example, DUPIXENT or even other IL-13 directed therapies can respond to a mechanism like REZPEG, which is really extremely different; it’s inducing Tregs to suppress the inflammation at the site without increasing immunosuppression. So REZPEG has this possibility in terms of the unmet need that you’re asking about, to approach people who are not responding, for example, to other therapies like DUPIXENT, and the IL-13 directed therapies. It’s also important to emphasize that our initial data showed this remarkable observation that once we stopped therapy, we continued to see a suppression of disease. This is really quite remarkable. And it’s this durability of response that also differentiates us from products like DUPIXENT. So it’s possible that we could deliver this therapy and maintain responses with very infrequent therapy, much less frequent than DUPIXENT, and/or even without therapy for long periods of time, and I think this is another area that we can differentiate in this space. So thanks again for the question.

And we’ll have JZ answer the NKTR-255 question.

Yeah, thank you. So the question was about the expectations in our study. So, I guess, I’ll start off by reminding you about some of the preclinical studies that we’ve conducted, evaluating NKTR-255 in combination with a range of different CAR-T therapies. What we’ve seen both in vitro and in vivo is that the addition of NKTR-255 causes two really strong biological effects. The first is that it causes a very large expansion in the maximum number of CAR-T cells that proliferate inside the organism after the CAR-T cells have been transplanted. Remember, these are living drugs, and they proliferate inside the patient or inside the test system, say, it’s a mouse or something. So with NKTR-255, we have the large expansion in cells. The second thing that we see is a prolongation of the cells' survival inside the animal. When we treat with NKTR-255, you get both an increased number and an increased persistence. In those preclinical studies, that leads to substantial efficacy. Efficacy relative to CAR-T alone is quite different, and it’s that night and day kind of difference. So then when we turn our attention to some of our expectations, we hope to see similar kinds of effects. We would like to see increases in CAR-T cell number when we add NKTR-255 to patients receiving one of the approved CAR-T cell regimen, along with an increase in their persistence and duration. We also want to increase their memory phenotype, sustain and stabilize that phenotype, and maintain an activated state in those cells. Clinically, our hope is that this will give rise to these two kinds of measurements; we’d like to see an increase in the complete response rate and the durability of that complete response rate. One of the challenges with these therapies is that the effect wanes over time; we want to make that effect last as long as possible. Ultimately, that should translate to additional time to event endpoints as well. Thanks for the question.

Thank you. One moment for our next question, please. And our next question will come from Chris Shibutani from Goldman Sachs. Your line is open.

Yes, good afternoon. Thank you. Two questions. One, on the sort of run rate for operating expenses, a lot of hard work this year, obviously, difficult work to address the restructuring. Should we think about the level of R&D and SG&A spending that you just posted in this most recent quarter? R&D coming in below, but we had projected, and I believe consensus as well. Is this a reasonable proxy if we’re thinking about a go-forward basis for the near- to intermediate-term? And then a second question, perhaps for Howard. Obviously, during the quarter, there were headlines related to a potential combination with PureTech, which would have prompted some unique sort of potential combinations for you as an entity. I think that that discussion was relatively briefly in discussions, but then terminated. Can you talk to the genesis of that, and maybe how you’re thinking strategically? It’s clear that you have the Lilly partnership, the oncology assets, et cetera. But that certainly was a sort of ink in the ointment that not many would have anticipated. If you could share any comments about how that came about and how you and the board are thinking moving forward from here, that would be terrific. Thank you.

Hi, this is Jill. So, I’ll take the financial question first. Just to reiterate, we’re not changing our guidance for 2022. But as we look forward into 2023 and our runway through 2025, when we announced our restructuring plan last spring, we talked about our annual burn going into the direction of $150 million to $175 million a year on average over that time period. So, I think that’s the way you can think about the cash burn guidance. GAAP could be a little bit different from that, as you know, it depends a little bit on the timing of the incurred expenses. But if you want to focus on the GAAP, then cash, I would say $150 million to $175 million is the right way to think about it for now. Of course, we’ll get updated guidance in our February call for 2023.

Hi, this is Howard. Good question. Let me give you some background. Look, first of all, as I said, in April, when we reintroduced our strategic plan, I mentioned that we would be open to anyone, any company that has interest in a business combination, and we certainly continue to do that. Like any company from time to time, we’re going to evaluate proposals from other companies that could benefit our business and make the proverbial one plus one equals three. PureTech approached us, and we had some discussions with them. Normally, those discussions – we have discussions – we’re always having discussions with companies; it’s something that goes on on a regular basis. I can tell you, though, that the only reason it became public is that under certain UK company rules, it had to be disclosed even though we were fairly early in discussions. So I wouldn’t read too much into that. I’d say that we’re always evaluating opportunities, and if there’s an opportunity that makes sense for our shareholders, we are highly interested in pursuing it. With that, other than that, I really can’t comment too much more on what we’re doing in that regard. I hope that helps.

Thank you. One moment for our next question, please. Our next question will come from Mara Goldstein from Mizuho Securities. Your line is open.

Hi, this is support for Mara. Thank you for taking our question. Another question on REZPEG, I know that the Phase 2 strategies are being worked out with Lilly. I’m just curious if you have some sort of baseline activity that you hope to see for the Phase 2 study started in atopic dermatitis? Secondarily, when do you anticipate getting to that point of making a decision whether this would proceed to Phase 3 of a patient-directed study? Thank you.

As we mentioned, we’re in the process of designing the Phase 2b study, which follows a proof-of-concept study that was presented. In terms of the goal of the next study, the Phase 2b is really to fully demonstrate the potential efficacy that we will see with REZPEG. It’ll be a study which has pretty standard elements to it. There’ll be an induction phase probably similar to other agents; there’ll be a maintenance phase, and we will study different dosing regimens during that maintenance phase. The key points that we will be looking for are what type of efficacy, what level of efficacy do we see at the end of induction? And that will be in different patient subgroups. Then, how does that compare with other therapies in the space? Especially in maintenance, what types of infrequent dosing can we achieve that maintains the benefit that we see after induction? Of course, we’re hoping for best-in-class type efficacy. So that’s our expectation. Thank you.

Thank you. One moment for our next question, please. We’ll take our next question from Roger Song from Jefferies. Your line is open.

Great. Thank you for taking the question, and congrats on the progress. I did have a quick one for NKTR-255. Understanding the mechanisms that is proliferating the T cell, it makes sense to combine with CAR-T. But just curious, given the bi-specific, particularly, they also guide a passive T cell therapy. Do you have any sense of why or why not NKTR-255 can combine with those bi-specific to drive better efficacy? Thank you.

Yeah. Hey, Roger, thanks for the question. This is JZ. Certainly, there is no scientific or other reason why NKTR-255 could not be combined with bi-specific, whether it’s a CD3 targeting bi-specific for T cells, or even NK cell targeting bi-specific such as a CD16 arm. In fact, both of those are very relevant and reasonable opportunities as well for NKTR-255. In terms of the basic mechanisms that could lead to potential synergy, it’s not that different from CAR-T. The CAR-T cells express autoimmune receptors, so they’re a direct target of NKTR-255 in this case, whereas, in the bi-specific, it would target T cells, and giving the T cells that are CD3 positive health and a CD3 engager, enhances NK cells in a CD56 engager. Our intention to focus in the cell therapy space is that there are more approved agents here in this space. There’s clearly a high unmet need as well, even in these approved on-label indications with these autologous products. We think there’s a great opportunity there. Another key reason why we’re focused on the cell therapy space is also due to the data showing that IL-15 levels, both that are reached post-conditioning regimen, as well as those that are maintained after CAR-T treatment begins. They seem to be highly linked with the patient’s ultimate ability to mount the best and most durable response. So, there’s a strong scientific theory for IL-15 and IL-15 pathway in the healthcare team pathway itself in the health cell therapy setting, and that’s why we chose to focus there. But certainly, there’s a reason we could also include bi-specific as a component for a combination strategy in the future.

Thank you. One moment for our next question, please. Our next question will come from Jessica Fye from JPMorgan. Your line is open.

Hey, guys. Good evening. Thanks for taking my questions. I’m curious: do you expect you or Lilly to disclose yet another indication for NKTR-358 before or after the lupus Phase 2 data?

No, thanks for the question. I think we just don’t know right now. We will be announcing that indication or hope to be announcing that within the next few months, in the upcoming months, but I don’t know how that will relate to the timing of the readout of the lupus study, which will also occur in early 2023.

Thank you. One moment for our next question. Our next question will come from Greg Harrison from Bank of America. Your line is open.

Hey, guys, good evening, and thanks for taking the question. Assuming that REZPEG continues to look differentiated in atopic dermatitis, how fast could a pivotal trial be executed? What would it look like in your ideal scenario? I'm just trying to get a sense of how our larger data catalysts like this would line up with your cash burn guide?

You can look at atopic studies. It does depend on the size of the Phase 2b that’s right now, as we talked about; we’re finalizing the design. We’re planning to initiate the study in the first part of 2023. An atypical study, the length of that study may be 18 to 24 months, so that’s when we might expect the data from this study.

Thank you. One moment for our next question, please. We’ll take our next question from Andy Hsieh from William Blair. Your line is open.

Great. Thanks for taking my questions. I got two. So, one, maybe for Brian. As you think about the bladder cancer maintenance landscape paths that could potentially be approved around that setting mid-next year, I’m just curious if there is any kind of strategy to potentially get incorporated into that setting, as opposed to just as maintenance setting? So, that’s question number one. Question number two, maybe for JZ. You mentioned the pivotal study with CAR-T, which is very interesting. I’m curious if you can remind us about the explorations you’ve done to get a sense of what the best sequencing is? You mentioned from previous questions about potentially after the conditioning regimen or shortly after the infusion. I’m just curious about whether that’s been worked out, especially in light of Project Optimus, where the FDA is really honing in on selecting the right dose. Thanks for taking my questions.

Thanks, Andy. I think I can actually answer both of them. The first question you asked was about the avelumab setting. Avelumab’s label right now is in patients that take a platinum regimen, so a chemo regimen in the first line. Then patients that don’t have a complete response can be eligible for avelumab maintenance, and it’s quite effective, as you know, at maintaining patients. It has a nice survival that they presented, which has been the key for their approval in that setting. It’s true that there is some potential paths with pembro around the corner, but that’s still a Phase 3 study that needs to complete and conclude. It is possible that we’re always looking to see if that changes the first-line landscape. For example, does it displace that first-line chemo where avelumab is used? So that’s something we’re paying attention to. Merck KGaA is paying even closer attention to that. So we’re very attuned to that as well. In terms of the long-term depending on the results we see in this maintenance setting and what we learned in the bladder, I think there’s opportunity for additional expansions, additional lines to be evaluated as well, even potentially on that Pembro pathways if that regimen is approved. For the CAR-T setting, you asked a great question. We’ve done quite a lot of work on the related dose and regimen. We did a number of studies with Cameron Turtle at Fred Hutch, using the same autologous CD19 CAR-T, where we tested multiple dose ranges and dose levels of NKTR-255, as well as timing of administration of NKTR-255 relative to CAR-T cell administration. We paid a lot of attention to that in the preclinical studies. There’s a lot of energy and resources that went into that, and we’ll be unveiling that at ASH at an event we host. You’ll see a lot more color there on how we address your question, as selecting the right dose and regimen is critical in cellular therapy. These drugs are basically living medicines. As they proliferate, ensuring NKTR-255 prolongs and sustains that proliferation is very important. We look forward to sharing our approach for that with you next month.

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

Thank you, everyone, for joining us today. I think we’ve outlined our continued progress in successfully executing on our strategy. Our pipeline and partner programs continue to advance and have the potential to address the needs of significant patient populations and provide the opportunity to create significant value for our shareholders. I’d like to thank all of our employees for their efforts and hard work. I want to thank our shareholders for their continued support. We’ll keep you updated on our progress. So stay tuned. Thank you very much.

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