Nektar Therapeutics (NKTR) October 2026 Investor Update Transcript

Ladies and gentlemen, thank you for joining us and welcome to Nectar Therapeutics EADV Analyst and Investor event. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Vivian Wu, Investor Relations and Corporate Affairs. Vivian, please go ahead.

Thank you, and good morning, everyone. Thank you for joining us today to discuss new data being presented at the EADV 2026 Congress. On today's call, we expect to make forward-looking statements regarding our business, including statements regarding the potential of and future development plans for Respec Aldous-Lukin, the timing and plan for future clinical data presentations and other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, many of which are outside of our control. Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our most recent annual report and quarterly report on Form 10-Q, available at sec.gov. We undertake no obligation to update any of these forward-looking statements, whether as a result of new information, future developments, or otherwise. A webcast of this call will be available on the IR page of Nectar's website at Nectar.com. Today, you will hear from Dr. Jonathan Zlewski, our Chief Research and Development Officer, and Dr. Mary Tagliaferri, our Chief Medical Officer. We're also joined today by Dr. Benjamin Ungar. Dr. Ungar is an Assistant Professor of the Waldman Department of Dermatology at the ICANN School of Medicine at Mount Sinai, and an expert in this field. We're very glad to have him with us here today. With that said, I would like to hand the call over to our Chief Medical Officer, Mary Tagliaferri. Mary?

Thank you, Vivian. At Nectar, our strategy has been to advance a first-in-class regulatory T-cell, or T-REG, mechanism to address the underlying biology of autoimmune and inflammatory diseases. Respeg aldis leucan, also known as Respeg, is a first-in-class IL-2 pathway agonist designed to selectively expand regulatory T cells. With Tregs, we can address multiple inflammatory pathways at once, including Th1, Th2, Th17, Th22, JAK-STAT, and others, which drives the efficacy and resolves the symptoms and underlying heterogeneous pathology of the disease. This is in contrast to therapies that only target Th2 disease pathways. Our ResPeg development program is addressing three distinct autoimmune diseases, atopic dermatitis, alopecia areata, and type 1 diabetes, each of which represents a substantial commercial opportunity. Alopecia areata affects roughly 160 million people worldwide, with approximately 30 million new cases diagnosed every year. The only class of systemic medicines approved are oral daily JAK inhibitors, which have significant drawbacks. JAK inhibitors possess box warnings, and they are also associated with high relapse rates after patients stop treatment. We believe this provides a significant opportunity for Nectar to advance ResPeg as the first biologic to be approved to treat these patients, offering potentially better safety and efficacy, which could improve over time with continued treatment. Additionally, JAK inhibitors are taken orally once daily, which can present challenges for long-term drug adherence. A therapy with less frequent dosing makes long-term treatment more manageable for patients. Beyond adherence, a therapeutic option which has an extended biologic pharmacodynamic effect, can offer durable and stable efficacy even in the setting of imperfect compliance. There also remains an opportunity for a therapy that reduces or eliminates the routine laboratory and monitoring requirements associated with JAK inhibitors. Finally, an option that offers a more straightforward market access with broader eligibility can greatly benefit patients. These parameters, if met, could provide physicians with an alternative to JAK inhibitors and redefine first-line systemic treatment in alopecia areata. And we believe that ResPeg's novelty reg mechanism has the potential to address these major unmet needs. Shown here are findings presented at the 2026 AAD meeting from external analysis of Symphony Claims data evaluating treatment patterns of patients treated with approved JAK inhibitors. These results demonstrate that most patients are initiated and treated with low-dose baricitinib. The data also demonstrate poor persistence on therapy, with most patients discontinuing treatment within the first six months. We designed the treatment period of the Phase 2B Resolve AA study to answer four important development questions for our Phase 3 study design. First, can a Treg cell-directed biologic provide meaningful efficacy with a robust safety profile? And the answer to this first question is yes. RESPEG demonstrated consistent separation from placebo across efficacy measures evaluated with the safety profile consistent with prior studies. Second, because we hadn't completed any prior trials in AA, we wanted to understand the kinetics of hair regrowth. What the trial showed is the greatest increase in hair regrowth occurred after week 16 and continued beyond the initial 36-week induction period. Third, we asked what dose should be advanced to the registrational trial, and based on the data, the 24 microgram per kilogram Q2-week regimen has been selected for our Phase III clinical trial. Finally, we needed to determine how long the induction period should be. The additional responses observed from Week 36 to Week 52 in the treatment extension cohort support a 52-week Phase III induction period for the evaluation of the SALT score of 20 or less, which is the registrational endpoint. As a reminder, our Phase 2B Resolve AA trial enrolled 92 adult patients with severe to very severe alopecia areata. The current episode duration was up to eight years. Patients received treatment every two weeks with subcutaneous ResPeg 24 micrograms per kilogram, 18 micrograms per kilogram, or placebo. Unlike a traditional maintenance phase of an atopic dermatitis trial where responders advanced to additional weeks of treatment. This study included a blinded 16-week treatment extension for patients who demonstrated hair growth but had not reached SALT 20 or less at week 36. This created a total treatment period of 52 weeks for the extension cohort. We previously announced in April the 52-week treatment data from the study. Today, we are representing the six-month off-treatment data. This slide shows the SALT20 responses over time to week 52 for the entire enrolled patient population. Recall, SALT20 corresponds to at least 80% scalp hair coverage and represents a clinically meaningful endpoint. The central observation is that the RESPEG response curve continued to rise through to week 52. It does not plateau. These data support that extended treatment beyond one year could result in additional gain in SALT20 responses. On the right side are the corresponding 52-week time points for low-dose baricitinib from the BRAVE registrational studies. We achieved our goal of a similar response rate compared to low-dose baricitinib at 52 weeks for the key SALT20 registrational endpoint. With comparable clinical benefit to a low-dose JAK inhibitor, plus twice monthly dosing and a more favorable safety profile, it is easy to see how ResPeg could become the first biologic used as first-line therapy for alopecia areata. This previously reported analysis shows patients who completed 52 weeks of treatment. Eight new patients treated with ResPeg converted to SALT20 among the 27 ResPeg treated patients in the 52-week treatment cohort. The new response rates were 29% in the 18-microgram group and 31% in the 24-microgram group. No new SALT20 responses were observed in the four placebo patients. Here we present, for the first time, a new analysis from the 52-week treatment cohort. For context, duration of the current alopecia areata episode is considered an important prognostic factor, with longer continuous episodes established as a more difficult-to-treat patient population. In this cohort, RESPEG achieved similar week 52 SALT 20 response rates regardless of current episode duration, with comparable outcomes observed in patients with episodes shorter than four years and those with episodes of four years or longer. You can see the response rates were 29% and 30% respectively. Approximately 37% of the RESPEG-treated patients had a current continuous episode of at least four years. While the subgroup sizes are small, these results suggest that clinically meaningful hair regrowth was not limited to patients with a shorter duration of disease. And looking at current episode duration with low-dose baricitinib, you can see a clear difference between the two cohorts. Patients whose current episode is four years or longer achieved a lower SALT 20 response than those whose current episode is shorter than four years. Now, let's look at the off-treatment durability. In this trial, we followed all patients for up to six months off-treatment. We believe this was particularly relevant to evaluate because ResPeg is a Treg-directed biologic that enhances endogenous immune regulation rather than simply suppressing a downstream inflammatory signal. Shown here is the durability data for both the four-month and six-month off-treatment periods for patients who receive 52 weeks of treatment in the study. For four months or six months off-treatment, you can see highly durable efficacy with ResPeg with 75% of patients maintaining the SALT-20 response at four months and 63% maintaining the SALT-20 response at six months. For context, we have shown here the historical data for low-dose baricitinib also at four months and six months off treatment. These patients in the baricitinib studies also received 52 weeks of treatment prior to being followed off treatment. You can see that only 30% and 20% of patients on low-dose baricitinib maintain SALT20 at four months and six months, respectively. This notable sustained SALT response off treatment is consistent with our findings in atopic dermatitis. These data support less frequent monthly and quarterly dosing after 52 weeks of RESPEG induction treatment in alopecia areata, and this will be incorporated into our Phase III long-term extension study. The preceding analyses use the stringent SALT20 or less threshold. Shown here is an analysis that asks a broader question. Do patients preserve the degree of hair regrowth they had achieved by week 52 when evaluated six months after withdrawing from breasthead treatment? Among the 21 patients who completed 52 weeks of treatment and had observed data at the end of the six-month follow-up, nearly half of the patients maintained or grew additional hair six months off treatment. These findings, coupled with the SALT20 responses, suggest that treatment with RESPEG leads to restoration of immune tolerance and, subsequently, durable immune responses. Now, this waterfall plot provides a patient-level view of hair regrowth of patients in the 52-week treatment cohort. During the six-month off-treatment follow-up, 41% of patients achieved a deeper best response than they had achieved during active treatment, and 22% maintained hair regrowth. Taken together, 63% of patients experienced either additional hair growth or maintenance of their prior best response during follow-up. The important takeaway here is twofold. First, response to ResPeg did not simply erode across the entire patient population when treatment was stopped. And second, many people continued to regrow hair in the off-treatment period. Now shown here is what happens when we look at deeper responses, such as SALT10, which represents near-complete scalp hair regrowth. On the left side, at week 52, 7% of the 27 extension patients had achieved SALT10 or less. Six months after treatment ended, that proportion almost tripled to 19 percent. Three patients with SALT20 score at week 52 converted to SALT10 score during follow-up, demonstrating a deepening of clinical responses after treatment discontinuation and suggesting durable biological activity. Now, on the right side of the slide, we are presenting historical baricitinib data to provide context for these results for RESPEG. Among baricitinib-treated patients who achieved a SALT-20 after one year on treatment, only 10% had a SALT-10 at six months after treatment discontinuation. To contrast that, among RESPEG-treated patients who achieved assaults for 20 at week 52, 63% had a SALT 10 at six months after treatment discontinuation. From a safety perspective, the 52-week safety findings remained consistent with the previously reported RESPEG safety profile. Importantly, no increased risk or safety signal was observed for oral herpes, congenitivitis, facial swelling or erythema, apathos ulcers, myocardial infarction, pulmonary embolism, deep vein thrombosis, or malignancy. No adverse events were observed that would require routine laboratory testing or monitoring. This favorable safety and monitoring profile is particularly relevant for a chronic dermatological disease and may represent an important point of differentiation from oral JAK inhibitors. Now, the photographs shown here are from a 40-year-old man whose response continued to improve with extended treatment beyond the original 36-week induction period. We previously presented this case in April when he had already demonstrated meaningful hair regrowth. Following an additional 16 weeks of treatment, the patient experienced a further 63% improvement in SALT score by week 52. Importantly, the clinical benefit did not plateau when treatment stopped. During the six-month off-treatment follow-up, the response continued to deepen, improving from a SALT 20 at the end of one-year treatment to a SALT 10. This case illustrates that continued treatment can further enhance clinical responses and that those gains may not only be maintained but can continue to improve even after ResPeg is discontinued. This second case highlights a similar pattern of continued improvement and durable efficacy in a patient with a much longer history of disease. The patient had been living with alopecia areata for 13 years prior to treatment and received ResPeg 24 micrograms per kilogram for 52 weeks. At week 36, the patient's SALT score remained 24, including that a SALT 20 response had not yet been achieved by the end of the original induction period. However, within an additional 16 weeks of treatment, the response improved substantially by week 52 and then continued to deepen during the six-month off-treatment follow-up period, ultimately reaching of SALT10. This case is particularly noteworthy given the patient's age. At age 64, she represents a population where JAK inhibitors are less desirable because of age-related comorbidities, including hypertension, hyperlipidemia, obesity, and diabetes. Despite a long-standing disease history, the patient achieved a durable SALT response with near-complete scalp hairy growth that was maintained and further improved six months after discontinuing ResPeg. Importantly, this case underscores the potential for ResPeg to provide meaningful, durable clinical benefit in patients with limited treatment options. Now, in closing for the clinical data, let's review the highlights from the study. First, ResPeg demonstrated consistent efficacy through 52 weeks, and the response curve continued to rise beyond week 36. Second, efficacy of patients treated for a year was similar for individuals with a current episode shorter than four years or longer than four years with SALT 20 response rates of 29 and 30 percent respectively. Third, as just mentioned, the safety profile remained consistent with prior studies with no new findings during the 16-week extension and a low adverse event discontinuation rate. Fourth, longer treatment was associated with greater off-treatment durability. Six months after the last dose, 63% of week 52 SALT 20 or less responders maintained that response. Fifth responses did not merely persist. Some continue to deepen after treatment ended, with SALT 10 or less increasing from 7% at week 52 to 19% six months later. Finally, these findings support the planned Phase 3 strategy of advancing RESPEG 24 micrograms per kilogram every two weeks for an induction period of 52 weeks, as well as evaluation of less frequent monthly or quarterly maintenance dosing in responders. The Phase III Zenith AA trial is planned to enroll approximately 850 patients and initiate in early 2027. Collectively, these data support RESPEG as a potentially differentiated, first-in-class TREG-directed biologic for severe to very severe alopecia areata, combining meaningful clinical activity, durability after withdrawal, and a favorable safety profile. With that, I'll hand the call over to Jaycee to discuss the biomarker findings from the Phase IIb Resolve AD study in patients with moderate to severe atopic dermatitis. Jaycee?

Thank you, Mary. Switching gears, I'll be talking about the biomarker sub-study we conducted in the Phase IIb Resolve AD study in patients with moderate to severe atopic dermatitis. Now, let's first look at the initial translational data we presented a year ago. Here we show a clear, objective, and meaningful immunological impact of RESPADS on lowering key Th2 inflammatory markers associated with atopic dermatitis. We observed dose-dependent reduction in IL-19, TARC, which is also known as CCL-17, periostin and MDC, which is also known as CCL-22. These are the absolute mean reductions from baseline to week 16 in patients that had baseline levels of these markers above the upper limit of normal. And as you can see, we saw a dramatic decrease in CCL22, one of the chemokines for the CCR4 receptor, and dose-dependent reduction at week 16 for CCL17, the other chemokine ligand. In contrast, placebo patients showed increased levels of CCL17 over this 16-week induction period. And consistent with our profile, we saw dose-dependent decreases in serum IL-19 and periostin, a key marker present in the lesions of patients with atopic dermatitis. Our PK and PD profile is consistent with prior studies of respite. We saw up to a six-fold increase in Tregs at the high dose of that study, which is very similar to what we observed with the same high-dose level and regimen in our phase 1b study. Now I'd like to briefly discuss some of the highlights from yesterday's late-breaking presentation from Dr. Emma Goodman-Yasky's lab at Mount Sinai. Emma's lab conducted transcriptomic and proteomic analysis of skin tape strips and matching blood samples. So let's turn to that talk and briefly profile the disease. Atopic dermatitis is a chronic inflammatory skin disease characterized by T-cell-mediated immune dysregulation, highly impacting patients' quality of life. Although current biologics effectively target type 2 inflammation, more than 50% of adults report an adequately controlled disease despite treatment, underscoring the complexity of treating this heterogeneous disease and leaving a major unmet need for a novel approach to immune modulation. As you know, ResPeg targets the IL-2 receptor complex to preferentially stimulate the proliferation of T-Rex, thus working as a master immune modulator upstream of the pro-inflammatory cytokine pathways and other currently available therapies. The Phase 2b Resolve-AD study enrolled 393 biologic-naive patients with active, moderate to severe atopic dermatitis. For the 16-week induction treatment period, patients were randomized to receive one of three-dose arms of RESPEG or placebo. The primary endpoint and secondary endpoints were assessed at week 16 at the end of the induction period, and these results were recently published in the Lancet. Emma's lab conducted a biomarker sub-study analyzing samples taken from the induction portion of the study from patients in the high 24 microgram per kilogram Q2 week dose that were taking into the phase three, as well as their comparison to samples from the placebo group. Tape strips were collected from lesional skin and blood samples of 100 patients, 59 in the high dose, and 41 in the placebo off. And shown here are the study methods and objectives. Samples were collected at baseline and at weeks two and four, while clinical assessments were conducted at baseline and every two weeks through week 16. The analysis was designed to profile gene and protein expression in the skin and serum during the first weeks of treatment and to assess whether early molecular signals were associated with later clinical outcomes. further allowing us to identify correlations between RESPEG dosing, pharmacodynamic changes seen in blood and tissue, and the correlation of those to each other, as well as their correlation to the clinical efficacy of RESPEG in this indication. Patients in the RESPEG and placebo arms were well-balanced across demographics and baseline disease characteristics. The mean reduction from baseline in EASY in week 16 was 64% in the biomarker sub-study population, consistent with the 61% reduction observed in the overall 24 microgram per kilogram Q2-week cohort in the entire study population. These results from the biomarker sub-study showed a broad transcriptomic response in skin as early as week 2. Respeg-induced rapid TREG-associated molecular changes, including significant upregulation of FOXP3 and IL-2 receptor alpha genes as early as week 2 of treatment, as compared to baseline and as compared to placebo. We also saw concurrent modulation of multiple immune pathways, which are dysregulated in atopic dermatitis, and a notable magnitude of difference between Respeg and placebo by week 4. These results are very consistent with ResPeg's agonistic mechanism of action. Transcriptomic and proteomic analysis demonstrated significant systemic and cutaneous normalization across multiple immune pathways, including Th1, Th2, Th17, Th22, and the JAK-STAT signaling pathways. And these normalization responses across multiple immune pathways were also seen in the proteomic networks as early as week two of treatment as compared to baseline. Importantly, these changes included early modulation of key disease-associated T helper inflammatory pathways, including fibrosis and tissue remodeling biomarkers that further deepened by week four. Proteomic analysis also demonstrated significant improvements in cardiovascular, atherosclerotic, and alopecia areata signatures as compared to baseline or placebo. And these results are consistent with RESPEG's broad TREG-targeted agonist profile. Finally, we looked at correlations between these early biomarker signals and subsequent clinical responses at the end of induction. And we see that early serum biomarker changes at week two, including increases in IL-10 and TGF-beta-1 expression and reduction in CCL-17 or TARP expression, were associated with subsequent easy improvement at week 16, linking early molecular effects with later clinical responses. Correlations between early biomarker changes and week 16 easy improvement were statistically significant in the RESPEC-treated patients, but not in the placebo-treated patients. In conclusion, RESPEC induced rapid Treg-associated molecular changes with concurrent modulation of the complex immune dysregulation underlying etopic dermatitis. These changes demonstrate the breadth of RESPEC's effect on different inflammatory pathways, which span both direct immune targeting, and disease-resolving mechanisms. So taking a step up to 10,000 feet, these translational data provide to us a scientific framework for how the ResPag mechanism of action addresses disease pathology through causal biology and how it can result in deep and durable responses that persist for months after dosing is completed. With today's data, we now have multiple examples of off-drug durability in two different diseases. Our nine-month off-drug results in our phase 1b study in patients with atopic dermatitis that we published in 2024, and now today, the six-month off-drug durability we reported in patients with alopecia and areata. This highlights the unique and what we believe to be transformational properties of RESPEC. On this theme, we look forward to the 52-week off-treatment data from our Phase II BA topodermatitis study that we will report in the first quarter, 2027. And with that, I'd like to turn the call over to Dr. Unger to share his perspective on both the Resolve AA six-month off-treatment durability data and the biomarker findings from the Resolve AD induction period. And Dr. Unger, we would welcome your insights on the clinical significance of these results and what they may tell us about the potential of ResPeg in restoring immune balance and delivering durable patient benefits. Benji?

Hi, everyone. Absolutely. So, you know, I'll get started with the Resolve AA off-treatment durability data. So just as a reminder to everyone who's listening about the disease of alopecia areata. It is, and I think any conversation about drugs to treat alopecia areata really need to keep this in mind. Alopecia areata is a hugely monumental condition for patients suffering from it, and treating it is very, very crucial, and patients are very, very motivated. The impact of the disease on patients who suffer from it can be negatively transformative, and successful treatments, conversely, could really influence their lives in dramatic ways. One of the challenges with alopecia areata is that clinical responses improve how people feel. But for many cases, there is still this kind of fear that hangs over patients' minds that they will lose response, whether that be because a drug stops working, whether that be because they lose access to the medication, if there are life circumstances that lead to delays in having the treatment or they have to be off of it for some reason, and that can have a huge impact. And when patients subsequently lose hair, it really sets things back by months or even years because it takes time for the hair to regrow. Because of that, one of the key factors that I and I think many of my colleagues look for in terms of treatment and thinking about treating patients long-term is if responses are durable and if there is some level of confidence that, you know, if we continue treatment and stay on track, that they'll maintain responses. Because of all of what I just said, the idea that we have responses that are maintained, or in some cases even improve off of treatment for the, over the course of months, in this case, six months follow-up, is very encouraging. And I think in general, as we collect more data on exactly this question, the more confidence that we have that there is the ability to maintain responses, if life gets in the way and people are not strict in terms of dosing for reasons that may be out of their control, I think that would be very, very encouraging for patients and physicians treating them. My initial response to the Resolve-AD biomarker data is also encouraging as well. So one of the things that we have seen very consistently in inflammatory skin diseases and probably even more so specific to atopic dermatitis is that biomarker changes with treatments are much more strongly predictive of clinical responses than other clinical responses in many ways. The sensitivity of biomarker assays is much greater than the clinical responses and changes occur earlier and more clearly definable. And so from my perspective, whenever I see a new treatment or a treatment used in a new area, the question that I want to see is, are we seeing molecular changes that are consistent with what we would expect clinical responses to look like. And, you know, in short, we are seeing that here with ResPeg and that provides to me a lot of confidence that the drug is addressing the underlying biology. And in general, once we see changes in underlying biology that we are looking for to normalize the disease pathology, then we have a lot more confidence that the clinical responses are going to be extrapolated in a much more significant way. So again, you know, the biomarkers are something that I'm always looking for, actually, for drugs, and seeing the changes gives me a lot of confidence that we're going to see continued clinical responses that, again, extrapolate from what we've seen so far.

Great. Thank you so much, Dr. Unger, for your thoughts. And operator, we can now open the presentation for questions.

We will now begin the question and answer session please limit yourself to one question. If you would like to ask a question please raise your hand now and if you have dialed into today's call please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Julian Harrison from BTIG. Your line is open. Please go ahead.

Hi, thanks so much for hosting this and congratulations on all the updates here. I'll limit myself to one question and what I'd love to get your perspective on more is any read-through to ResPeg's remittive potential in atopic dermatitis. I understand you have phase 1b results already providing some evidence of a remittive effect in atopic derm, but what would maybe be a win in your mind in terms of duration of responses off drug in the data you plan to share next year? Thanks so much.

Hi, Julian. It's Mary. Thank you for the question. You know, I think right now the way we look at it is we have three different studies now that show strong durability of effect. When you go back to our phase 1b data and the Nature Communications paper, you know, we dosed patients for 12 weeks and then in atopic dermatitis, patients who had very severe, moderate to severe disease. And when you remember, we then followed them for nine consecutive months off treatment. And those patients who had an easy 75 response, 71% maintained their easy 75, nine months off treatment, and 80% maintained their VIGA off treatment. And then, you know, we did our large phase two B study. And in that study, when we looked at the maintenance cohort after 16 weeks of induction and then followed those patients for, you know, through to 52 weeks, even on the Q12 week dosing, where patients only had three doses, we had 83% of patients maintain their EZ75. And now with the alopecia areata study, you know, we have a third trial to show this durability of effect. So I think when, you know, we unblind the data from the phase two, we're going to want to see that those patients with the EZ75 in particular, you know, the primary efficacy endpoint for registration, that they, you know, with a high proportion can maintain that EZ75. And I think we go into those data optimistic with these three different distinct clinical trials showing this level of durability after cessation of treatment with ResPeg. So thanks for the question, Julian, and we look forward to sharing the data with you.

Your next question comes from the line of Yasmeen Rahimi from Piper Sandler. Your line is open. Please go ahead.

Team, can you hear me? Yes. I am so sorry for the technical difficulties in creating to my colleagues and you guys. Team, obviously, this data is absolutely outstanding. How has it changed your view in terms of the inclusion-exclusion of the patients that you'll be enrolling? And I know it seemed like from the prepared remarks that maybe there's not a modification to the Phase 3, but I would love to, given this new data onset, especially when it comes to the continued response you're seeing, if you expect that. And then a second quick question that we've been getting from clients is like, Have you seen a deepening of response depending on whether it's on SALT10 or SALT20 based on time of diagnosis? Thank you again, and sorry for my technical interruptions.

Yeah, great. Thank you so much for asking the question. So, you know, what we're excited about in our 850 patient phase three study is we will be enrolling patients who are JAK inhibitor naive and patients who have previously experienced, been on a JAK inhibitor, as well as adolescents. So when we think about, you know, the label, it's a broader label. And then, you know, with respect to, you know, some people have run clinical trials where they only look at patients that have an episode of their alopecia areata that's less than four years. And, you know, our data now provides the confidence that, you know, we can, again, address a patient population up to eight years of a current episode. So that was very exciting for us as well. And then in terms of time of diagnosis, you know, you just saw that we shared with you this woman age 64 who had a diagnosis of 13 years, and she did quite well. So we do believe that we will be able to address patients both who have had a longer history of alopecia areata as well as shorter. And then, you know, again, in our trial, we did enroll patients that were both severe as well as very severe. And so we're feeling very optimistic going into the phase three, one, that we can treat a broad patient population with ResPeg, and two, that we really have identified the proper schedule and the proper dosing and the proper induction period to have a very competitive first-line treatment for the disease. So thanks a lot, Yasmin, for the question.

Your next question comes from the line of Samantha Semenkow from Citi. Your line is open. Please go ahead.

Hi, good morning. Thanks very much for taking the question, and congratulations on this great data update. My question is just about the greater response durability you seem to see with the patients that were treated through week 52. I'm wondering just, you know, broadly when you look on a patient level, is there a correlation between the amount of time a patient spends as a SALT 20 responder or in any response for that matter, and the magnitude of the durability benefit that they received off treatment? Thanks very much.

Yeah, it's a great question. You know, we, you know, we have saved some data to share in a publication, Sam. And I think you're touching on a really great point that if a patient reaches a stable SALT20, meaning that, you know, in the 52-week timeframe, they had achieved a SALT20 on more than one time point while they were in the 52-week period. And we did find that those patients have greater durability. And so, you know, when we do look at, you know, our open label extension, you know, we can really hone in on those patients with a stable SALT 20 and really look at this longer maintenance dosing, like a Q12 week as opposed to just even a monthly. So we're really excited about that. I will say in terms of magnitude of benefit, you know, we're seeing a diverse group of patients achieving a deep magnitude of benefit, and so, you know, I think when we have data from 850 patients, you will be able to look further in these subgroups, and you have a good sense, but I think going into the trial, what we're excited about is both, you know, if you had a current episode of less than four years or greater than or equal to four years, we see analogous efficacy, which you don't see with low-dose baricitinib, and that gives us a lot of confidence, too, about being able to treat both patients with a poor prognostic factor as well as those patients who have been easier to treat. And again, you brought it up, too. We really firmly believe the 52 weeks leads to improved immune tolerance and is the right time frame for our induction period in the phase three program. So thanks for the great question.

Your next question comes from the line of Cha-Cha Yang from Jefferies. Your line is open. Please go ahead.

Hi, team. Can you hear me? Yes. Yep. Okay. Wonderful. Thank you for hosting this call and congrats on all the updates at EADV. There were quite a lot. It was great to see you guys. I have a question for Dr. Unger, if he's still on. Just based on this new data and based on the totality of data for the alopecia program, can you tell us more about the specific types of patients that you see ResPeg being a natural fit for in your practice?

Sure. I'm happy to weigh in on that. So when I'm thinking about treating patients, it's a conversation and an evaluation that's holistic that has to factor in their comorbidities, their risk factors, the impact of their hair, their goals, and importantly thinking about this as a chronic condition that requires ongoing treatment, certainly in the current paradigm that we have. Patients are very motivated to have their hair regrown and to maintain it, and they therefore are really looking for treatment very, very commonly and really willing to go ahead with that. Now, with that said, there is also a balance of safety considerations and risks involved that factor into really any treatment, let alone a systemic treatment. And that's part of the conversation that we have. Based on the data that we see so far in the phase two, in terms of the magnitude of clinical responses, in combination with the safety profile that we're seeing, and now adding to the mix this potential for kind of sustained responses even with gaps in treatment, I guess the answer is it's hard to see to me who wouldn't be a candidate for this kind of approach is the short answer. I don't know that I see any patient for whom this wouldn't be a strong consideration.

Thank you for your question.

Your next question comes from the line of arthur hee from hc wainwright your line is open please go ahead uh hey can you hear me yes yeah hi arthur hey hey hey jay-z and mary congrats on the data uh so maybe uh for for you guys i just wonder if mary could you give us more color on the three withdrawals in the 18 arm, and is there any withdrawal is SOT20. And for Dr. Unger, given the activity continued for the off-treatment period, how should we think about the continued dosing in the real world use of this drug? And also for the team, given this kind off-treatment data, are we rethinking about interval for the maintenance dose? Thank you.

Go first, and then I'll answer this question.

Yeah, Benji, can you please answer the second question? Oh, sorry.

Something cut out. Yeah, absolutely. So I think that when I consider, you know, a drug with a profile like this in real-world use, the short answer is I think the phase three data with, you know, hundreds of patients is going to give us a better guide to what to expect. You know, when I'm treating patients in the real world, we take things on a case-by-case basis, factoring in considerations of disease impact, you know, currently how severe it is, what the depth of response is, and so on. I think in real world, once we have the data, we're going to take an approach that allows for, in a sense, the least exposure to a medication that will allow for continued responses. And so that ultimately is going to have to be guided by data that is going to be produced in the larger phase three trial. With that said, I do envision that patients maintaining responses off of treatment, or at least having this kind of potential dosing flexibility in a way or dosing reassurance will allow for maybe a more nuanced or more acceptable approach to saying the continued treatment will maintain responses. So if I got the question correct, the answer is I think this is going to allow for, I think, a very high degree of confidence that patients who receive ongoing treatment, even if not at the two-week or four-week dosing interval, will maintain the responses. Because ultimately, the risk of losing response is a very high one that needs to be addressed in a very conservative way.

Thank you, Benji. And then, Arthur, I can answer your other question. So when you look on the waterfall plot, there are four patients who discontinued during the six-month off-treatment follow-up. And you can see one patient had a very deep response and the three others had less of a response. And then all of our responders did make it all the way through to the six-month follow-up timeframe. And, you know, that allowed us to do an NRI analysis for our data. So thanks for asking the question. But you can see that one patient that did go off had a greater than 75% decrease in their baseline salt.

Your next question comes from the line of Mayank Mumtani from B. Riley Securities. Your line is open. Please go ahead.

Yes. Good morning, Dean. Can you hear me? Yes. Yes. Okay. Thanks for taking our question and congrats on the data. Just a quick one on, you know, the SOL-20 responses at 36 weeks that you lost about, I think, 9 of 10 patients and then versus the three patients you had deepening, you know, to SOL-10 at 52 weeks or even like I think 11, you had total deepening of responses, best response. Any TREG or additional biomarker data you've kind of done so far to understand you know those differences uh would be helpful to know and then just maybe remind us on the phase three uh salt 20 uh you know placebo adjusted treatment effect you've assumed um as you as you finalize the protocol here and um obviously the big question is that how do you uh you know have your protocol identify who gets um you know this less frequent dosing versus maybe it makes sense for some patients to continue on that every two week regimen, if you could just maybe give us some color on the protocol criteria. Thanks so much.

Thank you. So yeah, I can start with the first question, and then Mary can answer the second one about the phase three design and other features. So we have some ongoing work from the alopecia study, Mayank, particularly serum-based proteomic analysis. That work is just underway. We just actually got a lot of the O-link data very recently. So it's something that we'll be analyzing over the coming weeks and months. But your question, you know, obviously, like looking at people that had detectable, you know, pathway changes like we've seen with our serum analysis and with our agonist mechanism, we'll be looking at that, comparing and contrasting that to atopic dermatitis patients for pathway networks. We'll be doing the same analysis. And then, of course, we'll be looking at the people that responded and the data that we have that could be helping us inform and understand, you know, durability. One thing that I do think is very important to add is that the way that we interpret, you know, all of these results is that the duration of dosing is important. That's pretty clear. I mean, it was very clear to us that even just the efficacy between week 36 and week 52 was dramatically different, right? So we know that the duration of dosing is very important. And there are biological reasons for that that I can go into. So besides the basic clinical pharmacology of duration of exposure, which is greater, we also know that in the hair cycle, it's about a three month long cycle as a hair follicle moves through one course. And the Tregs clear roughly once per cycle. So it makes sense why the duration of dosing is important and why the ability to restore Tregs is important. As the follicle cycles, you want to keep making sure that there's a new source of Tregs that it has available for it. We think that's an important element of all this as well. Our future translational work, you know, we hope to uncover, you know, many of those additional mechanistic features. And we're even considering a translationally focused study that will allow us to really dive into them. And I'll turn it over to Mary to discuss the phase three questions.

Yeah, thanks, Mayan. So I want to clarify that there is the phase three for registration, and then there's what will be the long-term extension study. So just focusing on the registrational phase three part, we, you know, for dosing, it will be 52 weeks. It will be every two weeks for the entire 52 weeks. And, you know, obviously that's a huge advantage over daily oral JAK inhibitor. And then we'll go, we'll compare the 24 micrograms per kilogram to placebo. And then when you look across all of the JAK inhibitor studies, the placebo rate is in the single digits and many of them in the low single digits. And then, you know, we've always said that our target product profile is to have a SALT20 similar to low-dose JAK inhibitor to baricitinib, and then the BRAVE1 and BRAVE2 studies is roughly 21% and 24% for SALT20. And so these studies, because of the size, 850 patients, it's very well powered to detect statistical significance. And the size is not driven by the need to reach a p-value, but rather, you know, the FDA requires a certain safety database in this patient population. And that's really the driver for the size of the study. So the trial is very well-powered to detect a difference between ResPeg and placebo. And then now moving to the long-term extension is where your question comes into how do you decide, you know, which patients would go on a monthly maintenance dosing and which patient would go on a quarterly dosing. And, you know, as you saw, we did have patients continue to have hair regrowth, but some of those patients did not reach a, you know, SALT 20 or SALT 10. And so after one year, the patients who don't receive, if you don't achieve a response could continue on cue two-week dosing. And then when we look at responders, we're going to look at deep responders and then randomized patients to two different maintenance doses to evaluate that. Those patients in that study, you know, not for registration, but will certainly guide clinical practice once ResPeg is on the market for alopecia areata. And so we will share the study design for the long-term extension after we get started with our phase three program, which begins in the first quarter of next year. But thank you for the good question.

Your next question will come from the line of Tara Bancroft from TD Cohen.

Hi, all. I just got an email from Cowan with a question. The question is, for long-term extensions for the Zenith AA phase three, I think you touched on this in a prior question, but can you discuss how you will evaluate both the monthly and quarterly maintenance doses? How will you determine which patients move to one of these two maintenance Yeah, thanks.

So I just answered that question with Mayank. And, you know, we are right now designing the long-term extension. Again, you know, patients that don't reach a SALT20, those patients will continue on Q2 week dosing. And then we'll really look and interrogate our data very closely and also look at the question that Sam brought up about patients with stable SALT20 while on treatment to really determine which patients we would advance to acute monthly and acute quarterly dosing. And we will share the full details of the long-term extension study after we get started here with our phase three program. And they're all really important and really great questions, all to say that this dosing Q2 weeks, Q monthly and Q quarterly is really favorable to patients who, you know, if they go on vacation and they forget to bring their JAK inhibitors, they can already start to experience hair loss just a week into their trip, whereas a biologic that's dosed every two weeks and has this durability of effect certainly is far more forgiving, helps with adherence, and could be instrumental to ensure patients don't lose their hair, even if they don't adhere very closely to their dosing regimen.

So thank you for the good questions. your final question will come from the line of jessica fye from jp morgan your line is open please go ahead hey guys good morning thanks for taking our question probably similar kind of vein as some of the other questions um but i'm curious how you guys are thinking about res peg treatment duration in alopecia, given what you're seeing with the sustained, you know, off treatment effect, just kind of a modeling question, right? Like, how should we be modeling average duration of treatment?

Yeah. So, I mean, yeah, you're, you're onto the same question, you know, that Mayank and others are asked, Cowan have asked, and we think it's a really important one. So first, when you look at the SALT 20 curve over time, as you saw, you know, there's not a plateau of the curve. And we're really excited. And, you know, our advisors and Benji, who's on the phone here, really have noted that even those patients that didn't reach a SALT 20 by the end of 52 weeks, continuing treatment Q2 leads could really push more patients over into being responders and having 80 and 90 percent care regrowth. I think, you know, when we talk about the long-term extension, you know, we're going to interrogate our data very closely. We're going to look closely at, you know, what is the threshold, SALT 20, SALT 10, maybe even SALT 5, to decide which patients then go on the quarterly dosing. And, you know, that will be built into our long-term extension. And you have the ability to randomize patients to monthly and quarterly to really, you know, look at the optimal maintenance dose after one year treatment. But suffice to say, if you don't reach a SALT 20 by the end of 52 weeks, we will continue those patients on Q2 week dosing to push over and convert more patients into a SALT plan.

There are no further questions at this time. I will now turn the call back to Dr. Jonathan Zalewski for closing remarks.

Well, I'd like to thank everyone for joining us today. I'd like to thank all of the patients that participated in the clinical studies, all of the investigators that we work with, and all the employees of Nectar for all their hard work. Thank you all, and have a nice morning. Goodbye.

This concludes today's call. Thank you for attending you may now disconnect