Nektar Therapeutics Price & Performance (NKTR)

With us on the call are Howard Robin, our President and Chief Executive Officer Doctor. Jonathan Slavski, our Chief Research and Development Officer Doctor. Brian Codson, our Interim Chief Medical Officer and Sandra Gardner, Chief Financial Officer. On today's call, we expect to make forward looking statements regarding our business, including statements regarding that therapeutic potential of and future development plans for drug candidates and research programs. The timing of initiation of clinical studies and the availability of clinical data for drug candidates the timing of plans for future clinical data presentations the formation, future development plans or success of our collaboration agreements, financial guidance and certain 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. [indiscernible] Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our Form 10 Q that was filed on November 8, 2024, which is available at sec.gov. We undertake no obligation to update any of these forward looking statements whether as a result of new information, future developments or otherwise.

A webcast of this call will be available on the IR page of Nectar's website at nectar.com. In With that said, I would like to hand the call over to our President and CEO, Howard Robin. Howard?

Thank you, Vivian. Thank you all for joining us today. 2024 was a productive year for Nektar and I'm very proud of our team for executing on important clinical development milestones for our lead autoimmune pipeline program Respegg alveis leukin, also known as Respegg. The achievement of these clinical development goals prepares us for meaningful data catalysts for Respec in 2025. [indiscernible] Earlier this year, we announced the enrollment completion for both our Nektar sponsored Phase 2b studies our 400 patient resolved AD trial in ectopic dermatitis opened enrollment October of 'twenty three and completed enrollment in just fourteen months. Our 90 patient RESOLVE AA study in alopecia areata opened in March of twenty twenty four and completed enrollment in roughly one year.

Both studies were completed on schedule in highly competitive clinical trial landscapes for both indications which I think demonstrates the enthusiasm from patients and physicians for ResDeg's novel mechanism of action and for the data that has been generated to date. Jay Z will discuss in a minute some of the unique operation features of our studies that are designed to minimize clinical operational risk. We look forward to data from both trials in ectopic dermatitis, now aticia Arata in the second quarter and fourth quarter of this year respectively. [indiscernible] Now in The U. S. Alone, there are over fifteen million people living with moderate to severe atopic dermatitis. And we know that less than ten percent of those patients who could relieve could receive biologic treatments for this chronic skin disorder are actually receiving treatment. New mechanisms are the key to growing this underserved market. This belief also extends to alopecia areata. According to the National Alopecia Areata Foundation, nearly seven million people in The U. S. Alone have or will develop this disease and a treatment market that is estimated to reach $5,200,000,000 in The United States and Europe. By 2023. This disorder significantly affects the quality of life for patients and the approved JAK inhibitor therapies with their high relapse rates are not durable and can carry significant potential safety risks.

With Nektar, we hope to offer a more durable treatment option in the form of a novel immunomodulating mechanism. And moving on to Type one diabetes, we've recently announced the clinical trial agreement with TriNet an international clinical trial network at the forefront of diabetes research in which they will conduct and fund a Phase two clinical trial to investigate ResBag in sixty six patients with new onset type one diabetes. We're proud to support TrialNet's mission of advancing innovative mechanisms aimed at slowing or stopping the progression of this disease. Nearly two million people in The U. S. Have type one diabetes, and the disease incidence continues to rise at a rate of three percent to five percent per year. And Brian will talk more about this later in the call. Now turning to the progress we've made with our preclinical programs. Over the past year, we expanded the company's preclinical pipeline in immunology and inflammation. First, we continue to advance our novel TNFR2 agonist antibody program NKTR-one hundred and sixty five. We IND enabling studies are ongoing with the goal of preparing for IND submission in the second half of twenty twenty five. Last year, we presented the first preclinical data at ULR showing that this antibody demonstrated selective enhancement of Treg cell function.

Given the importance of Nektar receptor two agonism, in a number of autoimmune diseases, NKTR-one hundred and sixty five could potentially be developed in autoimmune diseases such as multiple sclerosis, ulcerative colitis and Bitilongo. We We're also designing a pipeline of bispecific molecules that pair TNFRT agonism with other antibody targets and we're planning for the first bispecific in this program to be ready for an IND enabling studies within the second Nektar quarter. We look forward to providing more color on our early pipeline as these programs progress and Jay Z will discuss more on this later. Now before I turn to the R and D discussion, I want to reintroduce Brian Kotzen, who we announced last month would be returning to Nektar to lead the development of ResBag as Interim Chief Medical Officer. Brian has over forty years of expertise in immunology and has extensive development and management experience He has also been supporting the clinical development of Respe in various capacities since 2017 and his intimate familiarity with this program has provided a seamless transition. And before I hand the call over to Brian, I want to highlight that Nektar remains in a strong financial position with a cash runway that extends into the fourth quarter of twenty twenty six ending 2024 with $269,000,000 in cash and investments on hand.

I'm going to ask Brian to share a few comments on on his enthusiasm for Respegg and also comment on our recent announcement for the program in Type one diabetes before we turn it over to Jay Z to review more details on ResBag's ongoing Phase 2b studies and our early pipeline programs. Brian? Thank you, Holly. It's great to be back at nighttime. As Howard mentioned, I've had the great pleasure to work on ResTech since 2017, even continuing as a strategic advisor since retiring in 2023.

When Howard and Jay Z called me with the opportunity to work on this program with my colleagues at Nektar again, I was very enthusiastic to help. I have a great passion for the potential of boosting regulatory T [indiscernible] And Luspog is the most advanced IL-two Treg stimulating mechanism in the field. Having closely worked for several years on this clinical development, I believe it has the potential to truly address unmet needs for safe and durable therapeutic options for patients battling atopic dermatitis alopecia areata and now type one diabetes. As Howard mentioned, we recently announced a collaboration agreement with TriNet to evaluate Respegg in a Phase two placebo controlled clinical trial in patients with new onset type one diabetes. I have had great interest in pursuing this type in this indication since it first entered the clinic and I'm very excited to work with some of my colleagues at TRIAL NET on this new clinical study. In Type one diabetes patients, there is a dysregulation of the balance between regulatory T cells and pathogenic autoreactive T cells, which leads the autoreactive T cells to destroy insulin producing beta cells in the pancreas. Studies in mouse models and early human research of low dose IL-two and other agents have shown that boosting Tregs can lead to the preservation of insulin producing beta cells.

This preservation of endogenous insulin secretion is key to improving long term health outcomes and quality of life for patients with this disease. This is why I'm so excited about the work that TrialNet is recommending for Respec. The proposed placebo controlled TrialNet partially preserved beta cell function and insulin and insulin production. We will start evaluation in adult patients and move to pediatric and adult patients in different phases of the study. TrialNet's goal is to initiate this study later this year And with that, I'd like to hand the call to Jay Z. Thank you, Brian. It's exciting to be working with you on a daily basis again. As Howard mentioned, we announced in January that we completed enrollment in the Resolve AD Phase 2b trial in patients with atopic dermatitis in just under fourteen months. We are grateful to the patients and physicians whose strong interest in this novel mechanism and proof of concept clinical data led to enrollment completion of this large Phase 2b study. And we look forward to reporting the top line data from the sixteen week induction period in June of this year. In February, Respec was granted fast track designation by the FDA for the treatment of adult and pediatric patients with moderate to severe atopic dermatitis.

This designation allows us to collaborate closely with the agency on the design of the registrational program for Respec and we'll be leveraging it as we work on our Phase three registrational strategy. In atopic dermatitis.

As a reminder, the RESOLVE AD study randomized approximately 400 biologic naive patients with moderate to severe atopic dermatitis across three different dosing regimens of ResBag or placebo. Guided by our scientific advisory board of industry leading dermatologists, we designed this study to ensure high quality sites were used and implemented criteria with the goal of addressing some pitfalls in operational execution from past trials. Patients were recruited from approximately 110 sites globally to ensure adequate geographic representation. Patients were stratified based on geographic region as well as baseline disease severity. Sixty seven percent of patients were enrolled in Europe across Poland, Bulgaria, Germany, Czechia, Spain, Croatia and Hungary. Seventeen percent enrolled in The United States, and the rest were enrolled in Canada and Australia. We had a goal to balance U. S. Recruitment due to the recent phenomenon in the last several years of a rising placebo effect observed in The U. S. We are very pleased with the 17% ultimate U. S. Recruitment [indiscernible] which aligns more closely with the recent winning atopic dermatitis study in terms of site distribution. Other important criteria that we used in the study include requiring that most of our sites be board certified dermatologists or immunologists.

With prior experience participating in other atopic dermatitis studies. We also require that patients enroll met a strict easy threshold that was consistent in both screening and randomization. Unlike some other trials, that have only required easy measurement at screening. Reconfirming that the patient's disease severity has not changed [indiscernible] between the screening and baseline time point. Allows us to reduce the potential for enrolling patients with flaring or episodic disease into the study. Patients with unstable disease or with a significant change between screening and randomization [indiscernible] After randomization, patients receive either Res PAG at twenty four micrograms per kilogram twice a month twenty four micrograms per kilogram once a month and eighteen micrograms per kilogram twice a month, or placebo for a sixteen week induction treatment period. After the induction period, patients that meet an EC50 or better efficacy threshold to advance from induction to maintenance are re randomized into one of two maintenance regimens, at their original dose level, To receive that dose on either a once a month or once every three month regimen. The maintenance portion of this study is thirty six weeks which will in total provide fifty two weeks of treatment duration for patients in the study.

We are following participants for one year after the conclusion of the fifty two week treatment period enabling us to evaluate Respec's potential for long term remitting effects. As I just mentioned, we anticipate top line data from the sixteen week induction period of this Phase 2b study in June and we expect data from the thirty six week maintenance period of the study in the first quarter of twenty twenty six. Now turning to RESOLVE-AA study, alopecia areata is a dermal disease which the patient's immune system mistakenly attacks the hair follicle and disrupts the body's normal ability to keep and grow hair. Leading to hair loss. There is strong rationale for Respec in this indication based on the role of Tregs to either prevent or down regulate the underlying pathology of the disease. Last month, we announced enrollment completion for our 90 patient Phase 2b study in our APACIA area The trial recruited patients across approximately 30 global sites. Patients had to present with severe to very severe disease defined as SALT 50, to SALT100 for at least six months in order to be eligible for inclusion. Sixty two percent of patients were enrolled in Poland, twenty four percent in Canada and the rest of The U. S. Randomized patients will be treated for a period of thirty six weeks and observed for up to sixty weeks in total. [indiscernible] Our primary endpoint for this study is mean percent improvement in salt or the severity of alopecia tool for week thirty six.

We will also be looking at a number of other secondary endpoints including the proportion of patients that was observed to have varying degrees of improvement in SALT score, including the regulatory approval endpoint SALT 20. We expect top line data from the thirty six week treatment period in the fourth quarter of this year. Turning to our preclinical programs in immunology, I'll start by talking about our novel 65. TNFR2 agonism has been shown to potentiate Treg function as well as maintenance of Treg linear stability especially in the non lymphoid tissue compartment. Genetic studies show that if TNF R2 is absent, the phenotypic effect is autoimmunity as well as other conditions that resemble FOXP3. Loss of function. In contrast, its presence and activation of a signaling been associated with immuno regulatory function and tissue protective effect. The first preclinical data from this program presented last year at ULR demonstrated that NKTRO-one 65 has a very high specificity for signaling through TNFR2 on Treg. And enhancing immunosuppressive activity. It also showed that the agonist we discovered able to signal through the TNFR2 multimeric receptors single arm [indiscernible] [indiscernible] which is a very novel finding for a TNFR2 agonist antibody.

We are very excited with NKTR-one 65 unique and differentiated profile and we believe it has the potential to become a first in class treatment for various autoimmune diseases including multiple sclerosis, ulcerative colitis and mitraligae. And we are rapidly advancing this program into the clinic with plans to submit an IND in the second half of this year. Since the TNFR2 agonist antibody specificities we active as single arm antibodies. We have leveraged this to design a pipeline of TNFR2 containing bispecific molecules. That pair TNFR2 agonism with other specificity [indiscernible] First of these is known as NKTR-one 66. These assets take advantage of multiple mechanisms to bring about novel molecules to target autoimmune diseases. We will nominate the first development candidate NKTR-one 66 from this pipeline in the second quarter of this year and look forward to providing more color around this in the future. Overall, we have observed growing interest for a selective TNFR2 agonist like NKTR-one 65 and as we move forward with our IND enabling studies, and develop the bispecific pipeline, we remain open to opportunities to work with companies interested in these areas strategizing the best path forward.

Before turning the call over to Sandy, I'll make a few comments on NKTR-two 55. Our IL-fifteen based oncology program. Last year, we presented data on NKTR-two 55 that highlights its potential to augment the response and patient outcomes of a variety of cancer treatments in both solid and liquid tumors. Data published in blood the peer reviewed medical journal of the American Society of Hematology from Stanford's IST demonstrated that NKTR-two 55 when combined with Stanford CD19 CD22 bicar T cell therapy, doubled the twelve month relapse free survival rate for patients with B cell acute lymphoma and at sixty seven percent compared to thirty eight percent in Stanford's historical controls treated with the same CAR T cell therapy. At ASH, we shared supporting data showing that NKTRO-two 55 enhanced complete response rate following CD19 directed CAR T therapy in patients with relapsedrefractory large B cell lymphoma. [indiscernible] seventy three percent of the 55 treatment group achieved a complete response at six months compared to fifty percent in the placebo group. This clinical benefit surpasses the published historical benchmark data from multiple pivotal trials and real world meta analyses of currently available commercial CD19 CAR T cell therapies. Finally, interim data presented at SITC from Doctor.

Steven Lin's Phase two study suggests that NKTR-two fifty five has the potential to confer clinical benefits in patients with locally advanced non small cell lung cancer. Results show that NKTR-two fifty five in combination with divalimab demonstrated a statistically significant improvement in the eight week absolute lymphocyte count. Compared to historical control data And these data strengthen our belief in NKTR-two fifty five's therapeutic potential [indiscernible] a new obligation in combination treatment with checkpoint inhibitors. The growing body of evidence showcases its broad applicability to be combined with a variety of therapies across cancer indications. Looking ahead, we'll continue to collaborate with Ameluzeta to evaluate NKTR-two fifty five in combination with their tumor infiltrating lymphocytes. In patients with advanced non small cell lung cancer. Who do not respond to anti PD-one therapy. And we continue to work with Merck KGa to evaluate NKTR-two fifty five in combination with DaVencio their Phase two Javelin bladder MEDDLE study [indiscernible] with the first potential PFS readout expected in the middle of this year. As this is an event driven analysis. As we continue to generate supportive data in these combination studies, we continue to explore the best areas for continued development of this drug candidate in partnership with collaborators.

And with that, will turn the call over to Sandy for a review of our financial guidance.

Thank you, J. Z. And good afternoon, everyone. We ended 2024 with $269,100,000.0 in cash and investments, with no debt on our balance sheet.

On 12/02/2024, we completed the sale of our Huntsville manufacturing facility, facility for consideration of $64,700,000 in cash net of transaction costs and approximately 20% equity ownership in the new portfolio company Gannett Biochem.

Turning to the income statement. Our revenue was $29,200,000 for the fourth quarter of twenty twenty four and $98,400,000 for the full year 2024. Our R and D expenses were $28,700,000 for the fourth quarter and $120,900,000 for the full year.

Our G and A expenses were $17,100,000 for the fourth quarter and $76,800,000 for the full year. In connection with the sale of our Huntsville manufacturing facility, we recognized a gain of $40,400,000 Our non cash interest expense for the fourth quarter was $10,200,000 and $28,100,000 for the full year. And our net income for the fourth quarter was $77,300,000 dollars or $0.03 basic and diluted earnings per share. For the full year 2024, our net loss was 119,000,000 or $0.58 basic and diluted loss per share. I will now review our 2025 financial guidance. We remain strong in our financial position and still expect our cash runway to extend into the fourth quarter of twenty twenty six. We plan to end 2025 with a approximately $100,000,000 in cash and investments. Our revenue for the full year of 2025 is expected to be between $40,000,000 and $50,000,000 which primarily includes non cash royalties. As a result of the sale of our Huntsville manufacturing facility, we will no longer have product revenue and cost of goods sold.

We anticipate full year R and D expense will range between $110,000,000 and 120,000,000 including approximately $5,000,000 to 10,000,000 of non cash depreciation and stock based compensation expense. We expect R and D expense to remain consistent [indiscernible] in atopic dermatitis and alopecia areata. We expect G and A expense for the full year of 2025 to be between $60,000,000 and $65,000,000 including approximately $5,000,000 to $10,000,000 of non cash Our full year non cash interest expense is expected to be between $15,000,000 and $20,000,000 And as I stated earlier, we expect to end the year with approximately $100,000,000 in cash and investments. And with that, now we'll open the call for questions. Operator?

Thank you. And our first question will come from Yasmeen Rahimi from Piper Sandler. Your line is now open.

Good afternoon team. Thank you so much for all the great updates and we're very much looking forward to the data across both of the studies for this year. I guess, the first question is you guys have shown in the earlier stage really phenomenal growth dose responses. In the EZScores. I would love to understand how you're thinking about dose And And then secondly, if you could just maybe remind us what is the criteria or responder analysis defined for patients to be eligible to go from the induction phase to the maintenance phase. And I'll jump back in the queue.

J. Z, you want to take that call? Is that answered? Questions?

Sure. Yes. Thanks, Yaz. So the first question about the dose response. So we addressed that with three So two of our dose cohorts evaluated twenty four microgram per kilogram dose One of those evaluated that dose twice a month. The other cohort at once a month And we changed the frequency there because that was sort of designed to model the pharmacodynamic profile of the Tregs that we measure in the blood. And so that's why we wanted to have the same Cmax one time for different exposures in the once a month versus twice a month set. So that was the goal there, to assess that based on the PKPD knowledge. And then we also selected eighteen micrograms per mill dose twice a month That dose is higher than the twelve microgram per kilogram that we used in the Phase 1b study. We felt that that dose twelve, while it did separate a little bit from placebo, a little bit on the lower efficacy side. We wanted to evaluate a higher dose level than twelve micrograms per kilogram in the Phase 2b. And that's why we chose eighteen micrograms per kilogram, halfway between and 24 from the Phase IbE study.

So those are expectations around the design of the Phase 2b. And then in terms of the criteria for patients, moving from the induction to the maintenance arms of the study, At the end of the sixteen week inductions, patients that have an easy 50 or better response are eligible to be re randomized to enter into the ME And then in the maintenance, they're re randomized to stay on the same dose [indiscernible] the induction portion of the study. But now the regimen is either once a month or once every three months. So we use that easy 50 criteria for advancement from induction to make Thank you, Casey.

Thank you.

Our next question will come from Julien Harrison from BTIG. Your line is open.

Hi, thank you for taking my questions.

First on the Phase 2b atopic dermatitis data expected next quarter, wondering if you could talk about what kind of efficacy bar either on EZ or IgA think would be commercially viable and worthwhile to advance respig into pivotal development?

Yes, that's a good question. I think we've done a lot of homework in that area, especially recognizing that the Amgen just released its data on Ox-forty. So I'll let I'll let JZ give you a more thorough answer on that.

Yes. Thanks, Julian. So we definitely see at least two different versions. Of activity. Obviously, like there's ranges of easy that are active and that are desirable to achieve. And also the separation from placebo both features are very important. We like what we saw in our Phase 1b study. Right, which showed both the dramatic separation from placebo terms of placebo adjusted and also an 83% change from baseline. So we're looking to replicate that kind of data in our Phase 2b. But we also acknowledge that as a drug with a novel mechanism, and an agent that's already shown a remitiv effect as we've shown in the Phase 1b. At even efficacy in the range of Dupixent the standard of care currently, would also be a very successful outcome. For us. We're definitely aware of the recent results in the field, including Amgen's ROCA data And I think that data is probably considered a little bit underwhelming by some some of the folks that have addressed and looked at that data. And we think that we're in a great position to replicate the Phase 1b results that we had with Nektar. And always remember that it isn't a zero sum game and it really is a quite underserved market with a very serious disease and having a novel mechanism is certainly going to be appreciated by patients and physicians, I'm sure of that.

Got it. Thank you. That makes a lot of sense. And then one more if I may. I'm curious how you're thinking about your rights to dapirilizumab and light of the recent littelfilumab royalty monetization Are there any differences compared to littelfilimab that are worth noting?

J. J. Do you want to comment on that?

Yes. There are different mechanisms of action, of course, right? One is [indiscernible] Inhibitor that's targeting more of a plasma cytoid arm. And of course, that drug has shown activity in both systemic lupus and cutaneous lupus. And seems like it has maybe even more potential in the cutaneous form of the disease. Whereas DAPI, right, is a CD40 ligand targeting agent, right, so it addresses different mechanisms of action. And then so that's mechanistically, both of the drugs have have demonstrated, I think impressive results in Phase two. And obviously DAPI has positive Phase three data as well.

Thank you. Our next question will come from Jay Olson from Oppenheimer. Your line is open.

Hey, congrats on all the progress and thank you for providing this update. Maybe another question on the top line Phase II atopic dermatitis results in the second quarter. Can you just talk about the scope of data that you're planning to share in that top line release? And maybe some of the secondary endpoints we should be looking for? And then also, what do you think the profile would be that would help you capture meaningful market share in the first line setting?

Yes, I don't I think good questions. I think we haven't discussed a lot about the exact secondary endpoints at this point. I think clearly as a novel mechanism that completely different approach than IL-thirteen, I would like I would like to see a drug that's similar in activity to Dupixent. With a very different biologic profile. I'll let Jay Z talk a little bit more about that. Go ahead, Jay Z. Yes, sure. Thanks, Jay. So just to reiterate, Tahira, we have been sort of guided on the specificity of the top line? Because obviously, the majority of the data we would need to present at a medical meeting. But we would intend to focus obviously on the sixteen week induction data as we've described. And to give at least a minimum directional understanding of the performance of the drug. I think that's a fair minimum of we can cover that more later And then in terms of the profile, I mean, it's pretty obvious that the greatest way to impact the share in the frontline setting is with efficacy. Right? So if we are able to replicate the Phase 1b results that we're really quite quite market, right, quite notable would say that's one of the strongest ways to impact the first line treatment space.

But even all that aside, we're a completely different mechanism We're not another IL-thirteen not a depleting antibody like ROCA is. We're really providing a completely different mechanism of action. And we're providing the data set that's already demonstrated the potential for really durable responses which could translate into very, very low frequency dosing regimen, which would at minimum be highly convenient to patients So we think there are really a number of ways that we can impact this market And we're very excited that being a novel Treg mechanism gives us these additional avenues [indiscernible] Yes, I think it's also important to point out that while Dupixent is certainly an excellent drug, no debate on that, There's a high percentage of patients failed Dupixent therapy over time. And as JZ just said, having a novel mechanism that works in a completely different fashion is is something this market desperately needs. So when we wind up comparing our results to Dupixent results, certainly I'd like to see similarities. Recognize that you're you're dealing with a completely different way of approaching the treatment of this disease. Thank you. That's super helpful. And if I could, sneak in a question on two fifty five.

Can you just talk about any updates on timing or expectations for the interim PFS PFS results from the JAVELIN bladder medley study and what we should be looking for there? Thank you. We should be seeing results from that middle of this year. Jay Z, do you want to comment a little further?

Yes, that's exactly right. It is event driven. Right, so you need to accumulate PFS events. Merck gave us some guidance at the middle of the year. Like summertime is about the kind of time when we might expect to see that. And then in terms of PFS events, obviously, our goal is to improve right, on the PFS and potentially maybe even the OS. Of single agent Pavencio in this setting. Right, in the post chemo setting. So that's obviously the objective of the study. That's what we'd like to see. So Merck would like to see as well. I mean, and that's how the study has been designed. With Avencio as an active comparator. To directly test the combination of two fifty five plus Bavencio versus Bavencio. [indiscernible] Thank you. It's super helpful. Thanks for taking the questions.

Thank you.

Our next question will come from Roger Song from Jefferies. Your line is open. Great. Thanks for the update and taking all the questions.

I have a quick one related to the Phase IIa type of dermatitis. Given the enrollment you have completed compared to the recent atambodemtitis trial. What's your expectation in terms of the patient baseline And then how will that impact particularly on the placebo arm? What's your expectation there? Thank you. [indiscernible] take that one?

Yes. Sure. Thanks, Roger.

So one of the things that we'd really like to see is the baseline easy to be in the range of like 25%, 25% to 30 right? Because as we've seen like other studies historically, those kind of baseline easy scores for the entire population. Have generally been linked with with lower overall placebo responses and also better studies. It is more dynamic range to measure for patients that are having higher EZ scores. So that's one of the things that we'd like to see in the study, something in that kind of range for baseline. Then in terms of setting expectations for placebo, I mean, it's we don't know. I mean, this is a blind study, but certainly we would like to see much, much lower placebo response rates than have been reported recently for some of the studies, including the studies that were reported last December. Such as from Q32 where the placebo rate was very, very high. One of the things that we did in our study that I tried to cover earlier in the in our call was that we really had a number of prospective features that we built into the study such as limiting The U. S. Footprint, geographic [indiscernible] focusing on board certified dermatologists and immunologists that had demonstrated experience working in atopic dermatitis studies as well as measuring the EZ score multiple times before drug was administered in patients were randomized.

And all of those things we did prospectively in order to protect the study and ensure that ideally we don't have a very, very high placebo response rate. So obviously, when we present the results of the top line later this year in June, we'll we'll show what that is directly. Thanks for the question, Roger.

Thank you.

Thank you. Our next question will come from Mayank Mamtani from B. Riley Securities. Your line is open.

Yes. Good afternoon, Dean. Thanks for taking our questions and glad to see the progress here. Could you touch on just a related question to the last comment, JZ, any thing you can touch on the screen failure rate you've seen on this extra stringent criteria you're using and how that may compare to some other studies that have been done around screening and then randomization. And then I have a quick follow-up.

Yes, that would be the kind of information we would share in the future. When we present the results of the study. [indiscernible] Got it. And then the ESCAPE piece in the protocol, how patients go on the escape. Could you just remind me how that's kind of structured for induction and maintenance? And then lastly, just high level read through from AD dataset to the Resolute study Any translational markers you're looking at would be helpful to know. Thanks for taking my question.

Sure.

Yes. So in the way the study is designed, which was one of the expert pieces of advice also given to us, by the steering committee is that when patients reach the end of the sixteen week induction, if they are not better than EZ50, then they have the option to enter into an escape arm.

And the escape arm is the twenty four microgram per kilogram dose of Respec given twice a month. Particularly good for patients, for example, blind study, but that might have been randomized to a placebo arm. Right? It gives everyone a chance to have access to TRUCK. That's how that escape arm works. And so primary entry point is that that sixteen week time point at the end of induction for patients that fail to meet the EZ50 or better rerandomization criteria to enter maintenance. The other way the patients can enter into the escape is during the maintenance, if for one reason or another people lose lose activity or lose response, then they have an second channel. To enter into this K farm. And that's really the way that it works. And it's really very standard. To these kinds of studies that offer an escape arm therapy to patients. That are in the study. [indiscernible] And then in terms of other kind of questions you asked about, sort of read through, I mean, we selected alopecia really because it is a key dermatological indication. And as you know with ResPEG, we've seen activity in multiple dermatological inflammatory conditions. Ranging from skin manifestations of lupus psoriasis, hepatoblastic dermatitis, And also the underlying knowledge about the biology of immune privilege and the role that Tregs play in helping to maintain and sustain that immune privileged state.

We will be looking at biomarker studies and And as you saw from our publication in Nature Communications in October of last year, a number of biomarkers that we measure are induction markers because our drug is an agonist.

And so I expect we'll be able to measure those kind of induced pathways independent of underlying disease etiology of the patient. Those will just be based on signaling of our molecule onto T Rex, for example. So those will be some very important correlative biomarkers that we'll be collecting in the future. And we're looking forward to the readout of both of these studies. As we discussed, the first one atopic derm is coming in June for that induction. And for alopecia areata, in the fourth quarter of this year, we expect to be reading out the thirty six week treatment data from that study as well.

Thank you.

JC.

Thank you. Next question will come from Arthur Hee from H. C. Wainwright. Your line is open.

Hey, good afternoon, Howard and team. Thanks for taking our question. So, JV, thanks for the additional color on the dose regimen for the AD study. I just want to follow-up a little bit on the rationale. To pick those three regimen arms. So why not go for a higher dosing regimen than twenty four microgram per kilo Q2W? Yes, and then I had a follow-up on the trial as well. Yes. Across the clinical program, we've evaluated various doses. Both weight based dosing such as what we're using in the study and also flat dosing as was used in other studies like the Lupus study. And then really when you look at it, that gives you a range of different doses that we have established. We've gone well above and well below And actually the twenty four microgram per kilogram is really an optimal dose level. It gives us all the things that we want to have from a PKPD relationship. Engage as a target very effectively. We get very robust Treg expansion and you can dose for a very long time. At that dose level without seeing any cessation or any hystereces in any of the pharmacodynamic responses.

And from the biomarker data, earlier that we published, you can also see very robust induction immune pathways that we see at that dose level. So that's really an optimal dose level that we're really focused on. Thanks for that. So and the second question is also regarding both AD and the study. Could you remind us how the stratification