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DATE

Thursday, Aug. 13, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer-Howard W. Robin
• Chief Research and Development Officer-Jonathan Zalevsky
• Chief Financial Officer-Linda Rubinstein
• Chief Medical Officer-Mary Tagliaferri
• Investor Relations-Vivian Wu

TAKEAWAYS

• Noncash Royalty Revenue -- $10.1 million in the second quarter, representing a decrease from $11.2 million last year.
• Cash and Investments -- $1.02 billion at June 30, 2026, compared to $245.8 million on Dec. 31, 2025.
• Net Loss -- $40.6 million or $1.23 per basic and diluted share, compared to a net loss of $41.6 million or $2.95 per share last year.
• Research and Development Expenses -- $39.1 million for the quarter, driven by the commencement of the Phase 3 ZENITH AD program and manufacturing activities for rezpegaldesleukin.
• General and Administrative Expenses -- $12.8 million in the second quarter, decreasing from $17.1 million last year due to lower legal costs.
• Full-Year Revenue Guidance -- $40 million to $45 million for 2026, as confirmed by management.
• Full-Year R&D Guidance -- $210 million to $230 million, including $5 million to $10 million in noncash depreciation and stock-based compensation.
• Full-Year G&A Guidance -- $60 million to $65 million, including approximately $5 million in noncash items.
• End-of-Year Cash Guidance -- $815 million to $840 million, reflecting an increase from previous expectations following a public offering.
• Cash Runway -- Extends into the third quarter of 2028, covering the period past the initial Phase 3 data readouts for atopic dermatitis.
• ZENITH AD Study Enrollment -- 510 patients per pivotal study in the atopic dermatitis program, with randomized dosing having started in July 2026.
• ZENITH AA Study Enrollment -- 850 adolescent and adult patients targeted for the single registrational Phase 3 study in alopecia areata.
• Atopic Dermatitis Market Scale -- 15 million people in the United States with moderate to severe disease, with fewer than 10% currently treated with systemic therapy.
• Alopecia Areata Market Projection -- $5 billion by 2033 for approved agents, despite safety challenges associated with current treatments.
• Type 1 Diabetes Data Timeline -- 2027 for the first cohort of patients in the Phase 2 study sponsored by TrialNet.
• Noncash Interest Expense -- $7.2 million for the quarter, with a full-year expectation of $30 million to $35 million.
• Gross Offering Proceeds -- $373.8 million from an underwritten public offering of common stock completed in April 2026.
• Equity Method Investment Loss -- $0.3 million from Gannet BioChem in the second quarter, compared to $2.4 million last year.
• Loss from Operations -- $42.3 million for the second quarter, compared to an operating loss of $36.2 million last year.

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RISKS

• Robin stated that approximately half of the patients currently on IL-13-based agents "either do not respond to therapy or lose their response over time," which creates a large unmet need for new options.
• Robin mentioned that well-known safety challenges associated with JAK inhibitors, including boxed warnings and an ongoing monitoring burden, have limited their use in alopecia areata.
• Robin noted that a jury trial regarding ongoing litigation is scheduled to begin in federal court in San Francisco on Sept. 8, 2026.

SUMMARY

Management at Nektar Therapeutics (NKTR -2.04%) reported a cash balance exceeding one billion dollars and the initiation of Phase 3 clinical trials for its lead candidate, rezpegaldesleukin. The company started its ZENITH AD program in atopic dermatitis in July 2026 and finalized the design for a single registrational Phase 3 study in alopecia areata following regulatory alignment with the FDA. Financial results for the quarter included an increased year-end cash forecast of $815 million to $840 million, supported by $350 million in net proceeds from a recent public offering. Management stated that the company's cash runway now extends into the third quarter of 2028, providing coverage through initial Phase 3 data readouts. Strategic focus remains on advancing rezpegaldesleukin toward a potential Biologics License Application submission in 2029 while exploring additional indications in type 1 diabetes and newer TNFR2 agonist programs.

• CEO Robin noted that 150 out of 151 physicians interviewed in market research preferred self-resolving injection site reactions over managing the longer-duration conjunctivitis associated with current treatments.
• Management confirmed that mid-2028 is the target for top-line data from the first Phase 3 studies in atopic dermatitis.
• Chief Research and Development Officer Zalevsky stated, "rezpeg works upstream of the currently approved agents in the diseases we are targeting."
• The company intends to start a clinical study for a new indication for rezpegaldesleukin prior to the end of 2026.
• For alopecia areata, the primary endpoint for the ZENITH AA trial will be a SALT score of 20 or less at week 52, representing 80% or more scalp hair coverage.
• Management reported that approximately 25% of patients with moderate to severe atopic dermatitis also have comorbid asthma, which rezpegaldesleukin is designed to address.

INDUSTRY GLOSSARY

• Rezpegaldesleukin (rezpeg): A first-in-class regulatory T cell stimulator currently being evaluated for the treatment of autoimmune and inflammatory diseases.
• Treg (Regulatory T cells): Specialized T cells that suppress immune responses to maintain homeostasis and prevent autoimmune dysfunction.
• EASI-75: A clinical metric representing at least a 75% improvement from baseline in the Eczema Area and Severity Index score.
• SALT (Severity of Alopecia Tool): A scoring system used to quantify the degree of scalp hair loss in patients with alopecia.
• BLA (Biologics License Application): A formal request to the FDA for permission to market a biologic product in the United States.
• JAK inhibitors: A class of drugs that work by inhibiting Janus kinase enzymes to block inflammatory signaling pathways.
• TrialNet: An international consortium of researchers dedicated to the study, prevention, and early treatment of type 1 diabetes.
• SNOT-22 (Sino-Nasal Outcome Test-22): A validated patient-reported measurement of sinonasal symptoms and their impact on quality of life.
• ACQ-5 (Asthma Control Questionnaire-5): A tool used to evaluate the adequacy of asthma control based on patient-reported symptoms.

Full Conference Call Transcript

Operator: Hello, and thank you for standing by. Welcome to the Nektar Therapeutics second quarter 26 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' 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 the conference over to Vivian Wu, from Nektar Investor Relations to kick things off. Please go ahead.

Vivian Wu: Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. On today's call, you will hear from Howard W. Robin, our president and chief executive, Dr. Jonathan Zalevsky, our chief research and development officer, and Linda Rubinstein, our chief financial officer. Dr. Mary Tagliaferri, our chief medical officer, will also be available during the Q&A. Before we begin, I would like to remind you that we will be making forward-looking statements regarding our business including statements related to therapeutic and commercial potential, and development plans for rezpeg aldesleukin. The timing and expectations for clinical data presentations, and regulatory submissions, and regulatory interactions, our expected cash runway, 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 and many of which are outside of our control. For a discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent Form 10-Ks and subsequent filings. We undertake no obligation to update these forward looking statements. Except as required by law. Live webcast and replay of this call will be available on the Investor Relations section of our website at nektar.com. With that, I will hand the call over to Howard.

Howard W. Robin: Thank you, Vivian. Thank you to everyone for joining us this afternoon. In July, we achieved yet another important milestone for Nektar, with the initiation of the global Zenith AD program Phase 3 AD pro program for rezpeg aldesleukin, also known as rezpeg, in moderate to severe atopic dermatitis. We are excited to be advancing this very important novel medicine toward registration, in the first of several potential indications. Following our end of Phase 2 meeting with the FDA, we also finalized the design of a single registrational phase 3 study for rezpeg in alopecia areata which we plan to initiate in early 2027.

The registrational study designs for rezpeg build on the positive clinical data we have generated in the first half of this year in patients with atopic dermatitis and alopecia areata, and also reflects input from our completed regulatory meetings. JZ will talk more about these designs later on during the call, And importantly, with the first phase 3 studies in atopic dermatitis now underway, we expect top line data from these studies in mid-2028 And if positive, expect to submit a BLA in 2029.

As a novel Treg agonist mechanism, rezpeg works fundamentally different by acting upstream of multiple inflammatory pathways to restore immune balance, And to that end, we continue to evaluate new indications for expansion of rezpeg's development in the future. Through TrialNet, we are evaluating its potential in type 1 diabetes, in an ongoing Phase 2 study. We also believe there are other autoimmune conditions where Treg mechanism could benefit patients, and we therefore view rezpeg as a potential pipeline in a product. Importantly, the market opportunity and patient need in each of our 2 lead indications are substantial.

More than 15 million people in The United States have moderate to severe atopic dermatitis and currently fewer than 10% are treated with a systemic therapy. We believe that this market will grow with the introduction of novel mechanisms of action. As was the case in the psoriasis market, that rezpeg is highly differentiated from the other novel MOAs approved or in development. We know that roughly half of the patients on currently available IL-13-based agents, including Dupixent, either do not respond to therapy or lose their response over time. This leaves a large unmet need for a new therapeutic option.

We believe rezpeg has the potential to alter the treatment paradigm in this indication by offering a differentiated efficacy and safety profile with a long term highly attractive monthly or quarterly maintenance dosing regimen. We recently completed extensive market research which included our 52-week maintenance data for rezpeg. The research reinforces our commercial thesis in atopic dermatitis. We interviewed and surveyed 151 high volume prescribers and key opinion leaders in The United States and Europe. A recurrent theme that came up in the research was physician enthusiasm for a novel mechanism of action as compared to overlapping mechanisms of action in the IL-13 class. The resolved AD data was viewed highly positively including EASI-75 in itch NRS responses.

The quarterly dosing schedule for maintenance and the EASI-100 rates were called out as notable and differentiating. The data in comorbid asthma was also cited as a key differentiator as physicians see patients with a range of other autoimmune allergic comorbidities. which could benefit from a Treg therapeutic approach. Notably, safety was viewed as a key differentiator with no increased risk for infection and no conjunctivitis observed in the rezpeg treatment arms in our Phase 2b RESOLVE AD study. Importantly, 150 out of the 151 physicians interviewed said that injection site reactions were not a hindrance to prescribing or a barrier for patients and actually preferred a self resolving short lived ISR over managing longer duration conjunctivitis.

It was clear that physicians would welcome a novel immune modulating mechanism like rezpeg in the treatment paradigm and that ResPEG would likely be prescribed across first-, second-, and third-line populations. The research supports our decision to pursue a label with our registrational program in ectopic dermatitis that captures both treatment naive and experienced patients. Turning to the opportunity in alopecia areata, nearly 6.7 million people in The United States are affected by the disease, and the large majority currently go untreated. There are well known safety challenges associated with JAK inhibitors, which is the only approved class to treat severe patients, and that has limited their use.

In spite of that, the market for agents currently approved for area alopecia areata is still projected to grow to $5 billion by 2033. But more than half of dermatologists are not comfortable prescribing these agents given their boxed warnings and an ongoing monitoring burden. Our rezpeg market research with physicians in alopecia areata reaffirms this hesitation to prescribe JAK inhibitor. And in addition, to rezpeg's safety profile observed to date and its novel MOA, physicians and patients in our research cited rezpeg's twice monthly dosing for alopecia areata patients, as more attractive than once daily oral dosing. Physicians also noted the ability to ensure patient compliance with treatment is much higher with an injectable twice-monthly regimen.

The research reaffirms our belief that rezpeg has the potential to become a preferred first line treatment option for patients with severe to very severe alopecia areata. Before I hand the call to JZ, I will note that we ended the quarter in a strong financial position with over $1 billion in cash and investments and our cash runway extends into the third quarter of 2028, past the initial phase 3 ectopic dermatitis data readouts in mid-2028. Our team is laser focused on successful execution of our phase 3 programs and advancing rezpeg to BLA submission as quickly as possible. With that, I will turn the call over to JZ.

Jonathan Zalevsky: Thank you, Howard, and good afternoon, everyone. Everything we have learned about rezpeg from the data from the clinical programs to date points to a consistent and we believe differentiated clinical profile. Meaningful efficacy, a favorable safety profile with dosing as infrequent as once a quarter, and responses that continue to deepen over time. As Howard stated, rezpeg works upstream of the currently approved agents in the diseases we are targeting.

It stimulates regulatory T cells and gets closest to natural causal biology to restore the immune balance that is disrupted in autoimmune and in inflammatory disease rather than blocking a single target or even multiple targets downstream. rezpeg is able to correct Th1, Th2, Th17, and other upstream inflammatory dysfunctions that can drive disease pathology across atopic dermatitis. Alopecia areata, and other autoimmune diseases. Because regulatory T cells target the underlying immune imbalance of inflammatory and autoimmune diseases, we have seen rezpeg produce very high durability over time. This was our key hypothesis. When we developed rezpeg and it is supported by the data we reported from our monthly and quarterly dosing regimens. In our Phase 2B program.

In our first Phase 1 study, following a 12-week treatment cycle, we observed durability of clinical responses. For approximately 9 months off treatment which we have previously published. As Howard mentioned, Zenith AD our global phase 3 program in atopic dermatitis, is now up and running. The first 2 studies both in biologic and JAK inhibitor naive patients, were initiated and we started randomizing patients back in July. The planned study in treatment experienced patients is set to start by the end of September. As a reminder, each of the 2 pivotal 510 adolescent and adult patients aged 12 and older randomized 2-to-1 to rezpeg at 24 micrograms per kilogram every 2 weeks or placebo.

There is a 24 week induction period followed by a 28 week maintenance period through week 52. During which we will evaluate both monthly and quarterly dosing. The third phase 3 study in treatment experienced patients has the same design and is expected to support a second-line and later usage in the label. Taken together, the studies are designed to support a potential label in this patient population that captures both naive and experienced patients spanning first-line, second-line, and later line usage. The studies are designed to support US and global registration with an IGA-related primary endpoint for the U.S., and co primary endpoints of EASI-75 and IgA for significant territories outside the U.S.

Along with multiplicity protected secondary endpoints for key patient reported outcomes. Such as itch numerical rating scale, or NRS, skin pain NRS, and atopic dermatitis sleep scale or ADSS. As you know, many patients with atopic dermatitis also have other comorbidities. Including asthma, and allergic rhinitis. As a Treg based mechanism, rezpeg is designed to work upstream of targeted, rezpeg is uniquely positioned to simultaneously address multiple autoimmune and inflammatory manifestations at once. And to that end, we also include a number of multiplicity protected secondary endpoints that will help us explore this benefit. The first being ACQ-5, which measures improvements in patient reported asthma. Approximately 25 percent of patients with moderate to severe atopic dermatitis also have asthma.

And in our phase 2b study, rezpeg produced statistically significant improvements in ACQ-5 versus placebo. Including in patients with uncontrolled asthma at baseline. A second endpoint we have included is the sino nasal outcome test 22. This is referred to with the acronym SNOT 22. A validated patient reported measure of sinonasal symptoms. Rhinitis is a type 2 inflammatory comorbidity found in patients with atopic dermatitis. And up to 30 percent of patients with atopic dermatitis also have a comorbidity of allergic rhinitis. On this endpoint in our Phase 2b study, we measured SNOT 22 for patients with self reported symptoms and which extended also into patients who had self reported asthma with rhinitis.

We are including SNOT 22 as a secondary endpoint in our phase 3 study and we are excited to share with you that we plan to present this non 22 data from the RESOLVE AD study at a future medical meeting. Our strong RESOLVE AD Phase 2b data underlies the design of our phase 3 program. In RESOLVE AD, we saw rapid onset of skin clearance and itch relief early in treatment and we saw those responses deepen over time rather than plateau. With less frequent monthly and quarterly maintenance dosing, we achieved high rates of complete skin clearance, including up to a 5-fold increase in EASI-100 rate during the 36 week maintenance treatment period.

A level of response rarely achieved As Howard said, we expect the first data from the phase 3 program in mid-2028. And if positive, expect to submit a BLA in 2029. Turning to alopecia areata. Recently held our end of Phase 2 meeting with the FDA. And we received alignment to conduct a single registrational phase 3 study which we are calling ZENITH AA. In the pivotal study, we have finalized 850 adolescent and adult patients aged 12 and older will be randomized to receive rezpeg at 24 micrograms per kilogram every 2 weeks or placebo. With treatment continuing through 52-weeks. The study will include patients that have a current episode of alopecia areata of up to 8 years.

This was the inclusion criteria for all of the JAK inhibitor phase 3 trials. As well as our Phase 2b randomized placebo controlled study. We will include both patients who are naive to systemic treatment, biologics and JAK inhibitors. As well as those who have been treated with a prior systemic agent, provided they have undergone an extended wash-out period. The primary endpoint will be a SALT score of 20 or less at week 52, which corresponds to 80% or more scalp hair coverage. This is the established registrational endpoint for patients with severe to very severe alopecia areata. Baseline.

Ken secondary endpoints include SALT scores of 10 or less and 30 or less, along with 50%, 75%, and 90% SALT reductions for baseline. Which capture increasing degrees of hair regrowth. You will recall that we observed improvement with ResBec treatment across all these endpoints in our Phase 2b trial. Patients from the study will also have the ability to roll over into a long term extension which will allow us to characterize durability of response on treatment, and long term safety. We plan to initiate the phase 3 alopecia areata study in early 27 and we expect data in the second half of 2029.

And if positive, would expect to seek approval in alopecia areata the second indication shortly following our planned submission in atopic dermatitis. Expect to have data from the 24 week off treatment period of the phase 2b RESOLVE AA study in alopecia areata in the fourth quarter of this year. Our objective for measuring patients in the off treatment period is to determine a maintenance dosing regimen beyond 52-weeks. Whether we continue to dose it twice monthly, or offer an additional once-a-month regimen.

As you know, we already have an advantageous dosing schedule of twice monthly as compared to a daily JAK inhibitor, as Howard pointed out earlier, our market research has reinforced for us that both physicians and patients would prefer a less frequent injectable regimen. As opposed to daily oral administration. When you couple this dosing regimen advantage with the safety profile observed to date, we believe rezpeg has the potential to become an important first line treatment for this indication. In addition, datasets from both our lead programs in atopic dermatitis and alopecia areata have been accepted for oral presentations at the European Academy of Dermatology and Venereology, or EADV, Congress to take place in Vienna in October.

These presentations will feature the Resolve AD maintenance data, covering both the patients who maintain their response and those who develop new and deepening responses over time, including complete clearance, as well as the RESOLVE 52 data. We are grateful for the opportunity to present these data at this important meeting. Beyond our 2 lead indications, the Phase 2 study of rezpeg in new onset type 1 diabetes sponsored and funded by TrialNet is ongoing. As a reminder, this is the same consortium that ran the foundational studies for teplizumab. The only approved therapy in this setting. And they bring expertise and a deep commitment to finding better therapies for patients with this disease.

We are looking forward to the data from the first cohort of patients in the type 1 diabetes study in 2027. As this program matures, we continue to evaluate additional opportunities for rezpeg and other potential indications. And as I mentioned earlier, rezpeg is fundamentally different from therapies that block a single downstream inflammatory mediator. rezpeg acts upstream by expanding regulatory T cells, and enhancing their suppressive function. Thereby restoring immune tolerance and reestablishing regulatory control over pathogenic immune responses. Our objective is to start a clinical study prior to year end which would allow us to evaluate rezpeg's activity in a new indication. Turning to our earlier pipeline programs, we are continuing our development of our TNF R2 programs.

NKTR-0165 is our bivalent TNFR2 agonist antibody. A molecule with very high specificity for signaling through TNFR2 on Tregs. To enhance their ability to regulate the immune system. We believe this mechanism has potential across a range of indications, including MS, ulcerative colitis, and vitiligo. Because NKTR-0165 demonstrated strong monomeric activity, we realized the TNFR2 molecule could be incorporated in the design of bispecific and trispecific constructs in combination with validated targets. Therefore, we are designing a pipeline of TNFR2-containing bispecific molecules that pair TNFR2 agonism with other antibody targets. The first of these programs, NKTR-0166, is a bispecific molecule that combines a TNFR2 agonist epitope with an antagonist epitope previously validated in rheumatology.

This dual mechanism gives NKTR-0166 the potential to modify disease pathogenesis across multiple autoimmune. We are continuing our research in both TNFR2 programs and will share more. As they progress. With that, I will turn the call over to Linda to review our financial results.

Linda Rubinstein: Thank you, JZ, and good afternoon, everyone. On today's call, I will review our quarterly financials for the second quarter of 2020 and our 2026 financial guidance. We ended the second quarter of 2020 with $1.02 billion in cash and investments with no debt on our balance sheet. In April, we completed an underwritten public offering resulting in $350 million in net proceeds. We are increasing our cash guidance for year end 2026. And we now expect to end 2026 with approximately $815 million to $840 million in cash and investments. Turning to the income statement. Our second quarter 2026 non-cash royalty revenue totaled $10.1 million.

Full year revenue for 2026 is still expected to total $40 million to $45 million. Our R&D expenses were $39.1 million for the second quarter of 2020. And we now anticipate full year R&D expense to range between $210 million and $230 million including approximately $5 million to $10 million of noncash depreciation and stock based compensation expense. As a reminder, we expect R&D expense to increase on a quarterly basis in 2026 as our phase 3 clinical studies and supporting CMC activities progress. Our G&A expenses were $12.8 million for the second quarter.

We continue to expect G&A expenses for the full year 2026 to be between $60 million and $65 million including approximately $5 million of noncash depreciation and stock based compensation expense. Noncash interest expense for the second quarter was $7.2 million and we expect non cash interest expense to total approximately $30 million to $35 million for 2026. Our net loss for the second quarter was a net loss of $40.6 million or $1.23 basic and diluted net loss per share. Our financial position is strong, enabling us to continue investing in our rezpeg atopic dermatitis and alopecia areata programs, as well as advancing our TNFR2 agonist antibody program, which includes NKTR-0165 and NKTR-0166.

And as I stated earlier, we now expect to end 2026 with between 800 and Hello, and thank you for standing by. Welcome to the Nektar Therapeutics second quarter 26 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' 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 the conference over to Vivian Wu, from Nektar Investor Relations to kick things off. Please go ahead. Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. On today's call, you will hear from Howard W.

Robin, our president and chief executive officer, doctor Jonathan Zalevsky, our chief research and development officer, and Linda Rubinstein, our chief financial officer. Doctor Mary Tagliafari, our chief medical officer, will also be available during the Q&A. Before we begin, I would like to remind you that we will be making forward-looking statements regarding our business including statements related to therapeutic and commercial potential, and development plans for RASPEG aldesleukin. The timing and expectations for clinical data presentations, and regulatory submissions, Regulatory interactions, our expected cash runway, 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 and many of which are outside of our control. For a discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent Form 10-Ks and subsequent filings. We undertake no obligation to update these forward looking statements. Except as required by law. Live webcast and replay of this call will be available on the Relations section of our website at nektar.com. With that, I will hand the call over to Howard. Thank you, Vivian. Thank you to everyone for joining us this afternoon.

In July, we achieved yet another important milestone for Nektar, with the initiation of the global Zenith AD program Phase 3 AD pro program for respalg alvezleukin also known as rezpeg, in moderate to severe atopic dermatitis. We are excited to be advancing this very important novel medicine toward registration, in the first of several potential indications. Following our end of Phase 2 meeting with the FDA, we also finalized the design of a single registrational phase 3 study for rezpeg in alopecia areata which we plan to initiate in early 2027.

Registrational study designs for rezpeg build on the positive clinical data we have generated in the first half of this year in patients with atopic dermatitis and alopecia areata, and also reflects input from our completed regulatory meetings. JZ will talk more about these designs later on during the call, And importantly, with the first phase 3 studies in atopic dermatitis now underway, we expect top line data from these studies in mid-2028 And if positive, expect to submit a BLA in 2029.

As a novel Treg agonist mechanism, rezpeg works fundamentally different by acting upstream of multiple inflammatory pathways to restore immune balance, And to that end, we continue to evaluate new indications for expansion of rezpeg's development in the future. Through TrialNet, we are evaluating its potential in type 1 diabetes, in an ongoing Phase 2 study. We also believe there are other autoimmune conditions where Treg mechanism could benefit patients, and we therefore view Respag a potential pipeline in a product. Importantly, the market opportunity and patient need in each of our 2 lead indications are substantial.

More than 15 million people in The United States have moderate to severe atopic dermatitis and currently fewer than 10% are treated with a systemic therapy. We believe that this market will grow with the introduction of novel mechanisms of action, as was the case in the psoriasis market, that rezpeg is highly differentiated from the other novel MOAs approved or in development. We know that roughly half of the patients on currently available IL-13-based agents, including Dupixent, either do not respond to therapy or lose their response over time. This leaves a large unmet need for a new therapeutic option.

We believe rezpeg has the potential to alter the treatment paradigm in this indication by offering a differentiated efficacy and safety profile with a long term highly attractive monthly or quarterly maintenance dosing regimen. We recently completed extensive market research which included our 52-week maintenance data for Respect. The research reinforces our commercial thesis in atopic dermatitis. We interviewed and surveyed 151 high volume prescribers and key opinion leaders in The United States and Europe. A recurrent theme that came up in the research was physician enthusiasm for a novel mechanism of action as compared to overlapping mechanisms of action in the IL-13 class. The resolved AD data was viewed highly positively including EASI-75 in itch NRS responses.

The quarterly dosing schedule for maintenance and the EASI-100 rates were called out as notable and differentiating. The data in comorbid asthma was also cited as a key differentiator as physicians see patients with a range of other autoimmune allergic comorbidities, which could benefit from a Treg therapeutic approach. Notably, safety was viewed as a key differentiator with no increased risk for infection and no conjunctivitis observed in the RezPEG treatment arms in our Phase 2b RESOLVE AD study. Importantly, a hundred 50 out of the hundred 51 physicians interviewed said that injection site reactions were not a hindrance to prescribing or a barrier for patients and actually preferred a self resolving short lived ISR over managing longer duration conjunctivitis.

It was clear that physicians would welcome a novel immune modulating mechanism like ResPEG in the treatment paradigm and that ResPEG would likely be prescribed across first-, second-, and third-line populations. The research supports our decision to pursue a label with our registrational program in ectopic dermatitis that captures both treatment naive and experienced patients. Turning to the opportunity in alopecia areata, nearly 6.7 million people in The United States are affected by the disease, and the large majority currently go untreated. There are well known safety challenges associated with JAK inhibitors, which is the only approved class to treat severe patients, and that has limited their use.

In spite of that, the market for agents currently approved for area alopecia areata is still projected to grow to $5 billion by 2033. But more than half of dermatologists are not comfortable prescribing these agents given their boxed warnings and an ongoing monitoring burden. Our rezpeg market research with physicians in alopecia areata reaffirms this hesitation to prescribe JAK inhibitor. And in addition, to rezpeg's safety profile observed to date and its novel MOA, physicians and patients in our research cited rezpeg's twice monthly dosing for alopecia areata patients, as more attractive than once daily oral dosing. Physicians also noted the ability to ensure patient compliance with treatment is much higher with an injectable twice monthly regimen.

The research reaffirms our belief that rezpeg has the potential to become a preferred first line treatment option for patients with severe to very severe alopecia areata. Before I hand the call to JZ, will note that we ended the quarter in a strong financial position with over $1 billion in cash and investments and our cash runway extends into the third quarter of 2028, past the initial phase 3 ectopic dermatitis data readouts in mid-2028. Our team is laser focused on successful execution of our phase 3 programs and advancing rezpeg to BLA submission as quickly as possible. With that, I will turn the call over to JZ. Thank you, Howard, and good afternoon, everyone.

Everything we have learned about rezpeg from the data from the clinical programs to date points to a consistent and we believe differentiated clinical profile. Meaningful efficacy, a favorable safety profile with dosing as infrequent as once a quarter, and responses that continue to deepen over time. As Howard stated, rezpeg works upstream of the currently approved agents in the diseases we are targeting. It stimulates regulatory T cells and gets closest to natural causal biology to restore the immune balance that is disrupted in autoimmune and inflammatory disease rather than blocking a single target or even multiple targets downstream. RespEG is able to correct t h 1, t h 2, t h 17, and other upstream inflammatory dysfunctions.

That can drive disease pathology across atopic dermatitis. Alopecia areata and other autoimmune diseases. Because regulatory T cells target the underlying immune imbalance of inflammatory and autoimmune diseases, we have seen rezpeg produce very high durability over time. This was our key hypothesis. When we developed rezpeg and it is supported by the data we reported from our monthly and quarterly dosing regimens. In our Phase 2B program. In our first Phase 1 study, following a 12-week treatment cycle, we observed durability of clinical responses. For approximately 9 months off treatment which we have previously published. As Howard mentioned, Zenith AD our global phase 3 program in atopic dermatitis, is now up and running.

The first 2 studies both in biologic and JAK inhibitor naive patients were initiated and we started randomizing patients back in July. The planned study in treatment experienced patients is set to start by the end of September. As a reminder, each of the 2 pivotal 510 adolescent and adult patients aged 12 and older randomized 2-to-1 to rezpeg at 24 micrograms per kilogram every 2 weeks or placebo. There is a 24 week induction period followed by a 28 week maintenance period through week 52. During which we will evaluate both monthly and quarterly dosing.

The third phase 3 study in treatment experienced patients has the same design is expected to support a second-line and later usage in the label. Taken together, the studies are designed to support a potential label in this patient population that captures both naive and experienced patients, spanning first-line, second-line, and later line usage. The studies are designed to support US and global registration with an IGA-related primary endpoint for the U.S., and co primary endpoints of 75 in IgA for significant territories outside the U.S. Along with multiplicity protected secondary endpoints for key patient reported outcomes such as itch numerical rating scale or NRS, skin pain NRS, and atopic dermatitis sleep scale or ADSS.

As you know, many patients with atopic dermatitis also have other comorbidities. Including asthma, and allergic rhinitis. As a Treg based mechanism, rezpeg is designed to work upstream of targeted, rezpeg is uniquely positioned to simultaneously address multiple autoimmune and inflammatory manifestations at once. And to that end, we also include a number of multiplicity secondary endpoints that will help us explore this benefit. The first being ACQ-5, which measures improvements in patient reported asthma. Approximately 25 percent of patients with moderate to severe atopic dermatitis also have asthma. And in our Phase 2b study, rezpeg produced statistically significant improvements in ACQ-5 versus placebo. Including in patients with uncontrolled asthma at baseline.

A second endpoint we have included is the sino nasal outcome test 22. This is referred to with the acronym SNOT 22. A validated patient reported measure of sinonasal symptoms. Rhinitis is a type 2 inflammatory comorbidity found in patients with atopic dermatitis. And up to 30 percent of patients with atopic dermatitis also have a comorbidity of allergic rhinitis. On this endpoint in our Phase 2b study, we measured SNOT 22 for patients with self reported symptoms. And which extended also into patients who had self reported asthma with rhinitis.

We are including SNOT 22 as a secondary endpoint in our phase 3 study and we are excited to share with you that we plan to present this non 22 data from the RESOLVE AD study at a future medical meeting. Our strong RESOLVE AD Phase 2b data underlies a design of our phase 3 program. In RESOLVE AD, we saw rapid onset of skin clearance and itch relief early in treatment and we saw those responses deepen over time rather than plateau. With less frequent monthly and quarterly maintenance dosing, we achieved high rates of complete skin clearance. Including up to a 5-fold increase in EASI-100 rate during the 36 week maintenance treatment period.

A level of response rarely achieved As Howard said, we expect the first data from phase 3 program in mid-28. And if positive, to submit a BLA in 2029. Turning to alopecia areata. We recently held our end of Phase 2 meeting with the FDA. And we received alignment to conduct a single registrational phase 3 study which we are calling ZENITH AA. In the pivotal study, we have finalized 850 adolescent and adult patients aged 12 and older will be randomized to receive rezpeg at 24 micrograms per kilogram every 2 weeks of placebo. With treatment continuing through 52-weeks. The study will include patients that have a current episode of alopecia areata of up to 8 years.

This was the inclusion criteria for all of the JAK inhibitor phase 3 trials. As well as our Phase 2b randomized placebo controlled study. We will include both patients who are naive to systemic treatment, including biologics and JAK inhibitors. As well as those who have been treated with a prior systemic agent, provided they have undergone an extended wash-out period. The primary endpoint will be a SALT score of 20 or less at week 52, which corresponds to 80% or more scalp hair coverage. This is the established registrational endpoint for patients with severe to very severe alopecia areata. Baseline.

Ken secondary endpoints include SALT scores of 10 or less and 30 or less, along with 50%, 75%, and 90% SALT reductions for baseline. Which capture increasing degrees of hair regrowth. You will recall that we observed improvement with treatment across all these endpoints in our Phase 2b trial. Patients from the study will also have the ability to roll over a long term extension which will allow us to characterize durability of response on treatment, and long term safety.

We plan to initiate the phase 3 areata study in early 27, and we expect data in the second half of 2029 and if positive, would expect to seek approval in alopecia areata as the second indication shortly following our planned submission in atopic dermatitis. We expect to have data from the 24 week off treatment period of the phase 2b RESOLVE AA study in alopecia areata in the fourth quarter of this year. Our objective for measuring patients in the off treatment period is to determine a maintenance dosing regimen beyond 52-weeks. Whether we continue to dose it twice monthly, or offer an additional once-a-month regimen.

As you know, we already have an advantageous dosing schedule of twice monthly as compared to a daily JAK inhibitor, as Howard pointed out earlier, our market research has reinforced for us that both physicians and patients would prefer a less frequent injectable regimen. As opposed to daily oral administration. When you couple this dosing regimen advantage with the safety profile observed to date, we believe rezpeg has the potential to become an important first line treatment for this indication. In addition, datasets from both our lead programs in atopic dermatitis and alopecia areata have been accepted for oral presentations at the European Academy of Dermatology and Venerology or EADV Congress to take place in Vienna in October.

These presentations will feature the RESOLVE AD maintenance data covering both the patients who maintain their response and those who develop new and deepening responses over time. Including complete clearance, as well as the RESOLVE 52 data. We are grateful for the opportunity to present these data at this important meeting. Beyond our 2 lead indications, the Phase 2 study of rezpeg in new onset type 1 diabetes sponsored and funded by TrialNet is ongoing. As a reminder, this is the same consortium that ran the foundational studies for teplizumab. The only approved therapy in this setting. And they bring expertise and a deep commitment to finding better therapies for patients with this disease.

We are looking forward to the data from the first cohort of patients in the type 1 diabetes study in 2027. As this program matures, we continue to evaluate additional opportunities for REST AG and other potential indications. And as I mentioned earlier, rezpeg is fundamentally different from therapies that block a single downstream inflammatory mediator. rezpeg acts upstream by expanding regulatory T cells. And enhancing their suppressive function. Thereby restoring immune tolerance and reestablishing regulatory control over pathogenic immune responses. Our objective is to start a clinical study prior to year end, which would allow us to evaluate rezpeg's activity in a new indication.

Turning to our earlier pipeline programs, we are continuing our development of our TNF R2 programs. NKTR-0165 is our bivalent TNFR2 agonist antibody. A molecule with very high specificity for signaling through TNFR2 on Tregs. To enhance their ability to regulate the immune system. We believe this mechanism has potential. Across a range of indications, including MS, ulcerative colitis, and vinaigrette. Because Nexter zero 5 demonstrated strong monomeric activity, we realized the TNFR2 molecule could be incorporated in the design of bispecific and constructs. In combination with validated targets. Therefore, we are designing a pipeline of TNFR2-containing bispecific molecules that pair TNFR2 agonism with other antibody targets.

The first of these programs, NKTR-0166, is a bispecific molecule that combines a TNFR2 agonist epitope with an antagonist epitope previously validated in rheumatology. This dual mechanism gives NACTER o 6 the potential to modify disease pathogenesis across multiple autoimmune. We are continuing our research in both TNFR2 programs and will share more. As they progress. With that, I will turn the call over to Linda to review our financial results. Linda? Thank you, Jay Z, and good afternoon, everyone. On today's call, I will review our quarterly financial for the second quarter of 2020 and our 2026 financial guidance.

We ended the second quarter of 2020 with $1.02 billion in cash and investments with no debt on our balance sheet. In April, we completed an underwritten public offering resulting in a $350 million in net proceeds. We are increasing our cash guidance for year end 2026 and we now expect to end 2026 with approximately $815 million to $840 million in cash and investments. Turning to the income statement. Our second quarter 2026 non-cash royalty revenue totaled $10.1 million. Full year revenue for 2026 is still expected to total $40 million to $45 million. Our R&D expenses were $39.1 million for the second quarter of 2020.

And we now anticipate full year R&D expense to range between $210 million and $230 million including approximately $5 million to $10 million of noncash depreciation and stock based compensation expense. As a reminder, we expect R&D expense to increase on a quarterly basis in 2026 as our phase 3 clinical studies and supporting CMC activities progress. Our G&A expenses were $12.8 million for the second quarter. We continue to expect G&A expenses for the full year 2026 to be between $60 million and $65 million including approximately $5 million of noncash depreciation and stock based compensation expense.

Noncash interest expense for the second quarter was $7.2 million and we expect noncash interest expense to total approximately $30 million to $35 million for 2026. Our net loss for the second quarter $40.6 million or $1.23 basic and diluted net loss per share. Our financial position is strong, enabling us to continue investing in our rezpeg atopic dermatitis and alopecia areata programs, as well as advancing our TNFR2 agonist antibody program, which includes NKTR-0165 and NKTR-0166. And as I stated earlier, we now expect to end 2026 with between $815 million and $840 million in cash and Our financial position is strong, enabling us to continue investing in our ResPEG atopic dermatitis and alopecia areata program.

As well as advancing our TNF r 2 agonist antibody program. Which includes NKTR-0165, and NKTR-0166. I will now turn it over to the operator for Q&A.

Operator: Thank you. Please press *1 on your telephone, and wait for your name to be announced. To withdraw your question, please press *1 again. In the interest of time, we do ask that you please limit yourself to 1 question at this time. And our first question will come from Yasmeen Rahimi from Piper Sandler. Your line is open.

Yasmeen Rahimi: Good afternoon, team. Congrats on getting the alignment of the Zenith AA setting, kicking that off. So congrats, and great update. You guys do always a wonderful job helping us think about the next catalyst in terms of you know, thinking about timing, the type of data we will get, and the expectation. And I would love to do that ahead of the next important data readout, which will be the withdrawal data that is going to come in the fourth quarter Could you maybe talk about what your expectations are in terms of what is the size of the cohort?

What do you expect, to see, that would be, and whether any of that off treatment AA data inform in any way sort of the data collection that will be ongoing in your Phase III study?

Howard W. Robin: Yeah. Thank you. that is a great question. I will let Mary take that question.

Mary Tagliaferri: Great. Hi, Yasmeen, and thank you so much for having our phase 3 program in atopic dermatitis kick off. We are very excited about that as well. So as you know, we have a 24 week follow-up, off treatment period in the RESOLVE AA study. This is an ongoing part of our trial. And, in the fourth quarter, we will have the data. We enrolled 92 patients total into the trial, And then of those 92, 31 went on into our 16 week extension. We do follow, every patient who was enrolled into the study for that 24 week off treatment.

And with respect to the Phase III, the most important for us is after 52 weeks of treatment on the phase 3 alopecia areata registrational study, we will continue to follow those patients in a long term extension study. And these data will really help to instruct should treatment continue to be on an every 2 week basis, or can we extend that frequency in a maintenance period to a longer time point, such as dosing once a month? So, we are really excited to look at those data so we can have more clarity on treatment after 52 weeks in our Phase III program.

You know, likewise, in the Q1 of next year, we will have 52-week off treatment data for our atopic dermatitis phase 2b study. And in that, again, we are really looking to instruct what should the dosing be after 52 weeks of treatment.

And should or are there patients that experience durability of responses beyond say, a dosing interval that we evaluated in the phase 2b such as q monthly and every 3 monthly, We did see, of course, in our Phase IIb that patients experienced great durability and many experience the deepening of response Now we want to look at in this 52-week off treatment, how those responses are maintained and the durability of those responses to see if it is feasible to extend that dosing interval beyond quarterly.

Yasmeen Rahimi: Thank you so much, Mary, for the thoughtful color.

Mary Tagliaferri: Thanks, Yes.

Operator: Thank you. Our next question comes from Samantha Semenkow from Citi. Your line is open.

Samantha Semenkow: Hi, good afternoon. Thanks very much for taking the question. And thank you for all of the details in the recent market research. That you shared in atopic dermatitis. I am just wondering if you can elaborate a bit more on how physicians are thinking about prescribing RespEG in the first line setting is there a certain patient population or patient characteristics that physicians are identifying that are best suited for RespEG? And did your market research give any indication on the breakdown of the portion that would be candidates, say, for first line versus second line or later. Thanks very much.

Howard W. Robin: Yeah. Very good question. Look. The market research that we did was extensive, and we wanna understand how to position our drug Because at some point, peep it is a completely novel mechanism, and everybody thinks that there is gonna be have to be a step through IL-13s to ultimately get to something like Treg mechanism. And we do not find that to be the case. I think, overall, as I said earlier, there is only about 10% of the population with atopic dermatitis that is that is being treated with systemic therapies. So it is an enormous upside market potential.

And even the patients that are getting IL-13s which is the which is sort of the gold standard right now, I think those patients about half of those patients either do not respond or fail after a year or so. So there is lots of opportunity for Respag as a first line indication. Clearly, the second line indication, it fits that definition perfectly since we know how many patients fail IL-13 and with a quarterly maintenance dose regimen, it makes it a very easy drug to take for those patients. But I do think we will get a significant share of the first line market as well once patients gets experience. Remember, it does not cause any infection.

It does not cause conjunctivitis, and those problems those side effects are potentially much more serious than mild to moderate self resolving ISRs. So overall, we are pretty happy about getting our first our first line market share.

Samantha Semenkow: Thanks very much.

Operator: Thank you. Our next question comes from Jay Olson from Oppenheimer. Your line is open.

Jay Olson: Thinking about eventually moving into the first line setting? Thank you.

Howard W. Robin: I am sorry. I barely heard that question. Could you say it again louder?

Jay Olson: Thank you.

Operator: And we will take our next question. Next question comes from Cha Yang from Jefferies. Your line is open.

Cha Yang: Hi, team. This is Cha on for Robert. Thank you so much for the update as always. Very informative and very colorful. I was wondering if you could give us some comments on the pretrial that happened last week. Any color that you can give on the outcomes of that and then what impact you expect those outcomes to have on your upcoming September trial. Thank you.

Howard W. Robin: Yeah. Look. It always a good question, but, of course, it is you cannot really we cannot really comment on an ongoing litigation. I can tell you that the trial is scheduled a jury trial is scheduled in federal court in Sandra Francisco for September 8th And, you know, we believe we have a very strong position. And that is unfortunately all I can tell you about it at this point. So, I would love to give you more, but it is difficult to comment on ongoing litigation.

Operator: Thank you. Our next question comes from Arthur He from H. C. Wainwright. Your line is open.

Arthur He: Hey. Howard and team. Congrats on progress. And Mary, congrats. Get the single trial for the AA study sign off. So for that part, I just wonder for the off drug data in the fourth quarter, For the patient, who finished the only finished the 36 week, Are we gonna also look into the data from those that part of patients there?

Mary Tagliaferri: Yeah. Hi, Arthur. Yes. We will be looking at those patients as well as those patients that completed the 52-weeks of treatment. Obviously, I think what will be most instructive and valuable to our decision making will be those patients there were 31 of them, that went into the 16 week extension. But, we will be looking at all the 92 patients that we randomized into the study and providing an update on the totality of the findings.

Arthur He: Okay. Thanks. So just 1 quick spacing. So when you are talking to the FDA, did they put some requirement for a medium or minimal duration for the current episode for the alopecia patient?

Mary Tagliaferri: Yeah. Thank you for asking. We will be following the same convention as JAK inhibitors. And our study design did provide for patients that have up to 8 years of their current episode. We do know that there are some other people who have looked at a more enriched patient population that only have a current episode of to Current episode. And, however, you know, we do not think that reflects the actual population of patients with alopecia areata, and we want to have a very broad label. So we did design a study that will include both patients who are JAK inhibitor naive and JAK inhibitor experienced.

We will have adolescent patients as well as adult patients, and we will be looking at patients who have a duration of their current episode less than 4 years and 4 to 8 years. We think having the broadest label has the greatest commercial potential, as well as serving the broadest proportion of patients. And certainly, a study that is in line with the prior JAK inhibitor studies.

Arthur He: Awesome.

Mary Tagliaferri: Thanks, Amir.

Arthur He: Thanks, Arthur.

Operator: Thank you. Our next question comes from Mayank Mamtani from B. Riley Securities.

Mayank Mamtani: I appreciate all the level of detail. 2 parted question. On the EADV, what is the incremental dataset that is you know, we should expect? And is there a chance off treatment is all the data could also be presented because it is October, technically, for further. And I also could help with the, you know, enthusiasm for enrollment in your global alopecia phase 3. And on the on the maintenance, atopic derm data, should you know, just based on your phase 1 b where we got EASI-75 up to 9 months, Can you just highlight what are the differences in this off treatment versus what we saw your phase 1 b?

And should we also you know, expect to see some of the EASI-100 responders, you know, make keep that off treatment remission?

Mary Tagliaferri: Great. Thanks, Mayank, for your questions. Certainly, as JZ mentioned, we are really pleased to have the 2 oral presentations accepted at EADV. I think this really highlights the promise of our novel mechanism of action and, of course, the strength of our clinical data. When we submitted the abstracts, of course, we did not have the 24 week follow-up data, and therefore, of course, our abstract does not include this portion of our study. The study is still ongoing and blinded. Now that being said, it is possible that we could include the 24 week data. As you mentioned, this could be very valuable and of significant interest We cannot make that decision today.

If we do have the data readout. In time and we are ready, we would love to include those data as well in our oral presentation by Doctor. David Grossmarin EADV. But again, at this time, we cannot make that commitment because the trial is still ongoing and we have not even locked that part of the database. But thank you for asking. It is a possibility, but again, it is not in our abstract. With respect to your second question about the maintenance data and the data 52-weeks off treatment for the Phase IIb in atopic dermatitis, you are correct. We did show off treatment data from our Phase Ib for 9 months.

The difference here is now we will have 3 additional months of follow-up post withdrawal from drug. We think that this is extremely important to us to look at, again, that durability of those responses and, again, we will be able to look at the EASY75 and, as you mentioned, the EASY100 and the EASY90 you know, we did see consistently that patients continue to improve with ongoing RespEG treatment we did see this deepening of response. Now, we want to look at these patients being off treatment, and we will be able to look at the 9-month time mark like we did in the Phase 1b as well. As 52-weeks off treatment.

And this will be extremely valuable to look at the optimal dosing. And after 52 weeks of treatment, can patients have less frequent maintenance dosing And for some patients, that could be. Longer than every 3 months. So we are really excited to look at those data and really closely examine the durability of those responses. So thank you for asking those 2 questions.

Mayank Mamtani: Very helpful and comprehensive.

Mary Tagliaferri: Thank you.

Operator: Thank you. Our next question comes from Julian Harrison from BTIG.

Julian Harrison: Hi, thank you for taking the questions and congrats on all the recent progress. First, I am wondering if you have any updated views on rezpeg's competitive positioning in alopecia areata in light of a recent data set last month from another non JAK treatment option in development in the broader space. And then taking a step back, keeping in mind the rezpeg pipeline and the product potential, I am wondering if you have thought at all about supporting any signal seeking efforts on an IIT basis. I am sure you have gotten some investigator requests. Is that something you are open to? Are you know, are future trials, you know, best to keep, you know, full control? Of Adnexar.

Thank you.

Howard W. Robin: Yeah. 2 very good questions. So first of all, regarding you know, competition in alopecia areata, look. The study that was just released that was just released, and I will let Mary comment a little more on this, very little difficult to interpret. And, you know, it was also a single arm study, so it was not a blinded study. it is a little difficult to interpret. And quite frankly, it had a patient population that was much less severe or much earlier on in their disease than what we are planning. I think Mary did talk about the difference between 4 years and 8 years, and I will let her comment on that, in a moment.

And to your second question about looking at other indications, yeah, we are we are in the process of considering which indications we would like to do some pilot studies to get some proof of concept studies. Cheng look. We were we were very successful in the lupus study when we when we looked at the data on a weight based dosing rather than a fixed based dosing. And I think there is a potential for working in cutaneous lupus as well. And there is a number of other indications just as we are doing in type 1 diabetes.

That could warrant a you know, whether it is an investigator sponsored trial, you lose a little bit of control there perhaps, or it is our own pilot studies. I do think that to support the value of a Treg mechanism, I do think there is other indications that we will be looking at. I will let Mary come back to your first question for some more insights.

Mary Tagliaferri: Yeah. Sure. Hi, Julian. You know, Howard mentioned this in our prepared remarks. We view the alopecia areata market as very large. And certainly, these patients are underserved by JAK inhibitors. So I think as seasoned biotech executives clinicians, and scientists, we love innovation, and we love to see innovation in a space where there is, you know, huge potential for growth. Now that being said, as Howard mentioned, the Q32 results are really difficult. To interpret. You know, it was a small, only 33 patients, open label study with no placebo.

And, you know, as we have mentioned now twice, you know, enrolling a selective patient population and eligibility really skews results in the favor of any drug that is being tested. You know, by contrast, our phase 2b study was randomized. It was placebo controlled. We looked at more than 1 dose. We allowed a broad patient population that was consistent with JAK inhibitor studies, so the generalizability has greater potential and you know, we had a very standard Phase IIb trial that then was recognized by the FDA as being sufficient to move forward into a Phase III study. So ultimately, we remain very encouraged by our efficacy and safety profile.

And I know the dermatology community at large is really looking forward to beginning enrollment in our study in the Q1 of next year for these reasons. So thanks for asking.

Operator: Thank you. Our next question will come from Marc Frahm from TD Cowen. Your line is open.

Marc Frahm: Hi, thanks for taking my questions and congrats on all the progress in getting Phase 3 up and running. Maybe just Howard, you touched a little bit about kind of the unmet the different unmet needs in the AD market, particularly, you know, as you think about treatment naive versus experienced patients. Just how do you guys view that as likely to kind of impact the relative enrollment pace for these phase threes and the 2 different kind of flavors of phase 3? You know, different patient sizes, but also, you know, different levels of unmet need.

Howard W. Robin: Yeah. Good question. I certainly think look. With the absence of ox forties, it certainly limits the opportunities for new mechanisms of action. And I think, you know, rezpeg is obviously unique in that sense. So I do not think patient enrollment will be an issue there. I think it will actually go fairly quickly. I cannot tell you exactly what it will look like. We just started the studies. But I am I am hopeful that it goes fairly quickly recognizing that as a new mechanism goes, there is really nothing there is really nothing else at the moment. We will see what the STAT6 data looks like, upcoming data.

But I do not I do not think that is as complete a mechanism as rezpeg. I can let Jay Z comment on that a little bit if he would like. But overall, I think I think the market I do not think people understand how large this market is. Let's let's assume the market by 2033 is probably $35 billion, and that is 10 percent of the patients getting treated. So I think, look, there is there is other good drugs out there. I am not I mean, Apogee's drug is certainly a good drug. I think STAT6 will could be a very important mechanism.

But the fact of the matter is the market is enormous And if you have a not and if you have an a novel mechanism, you should be able to get a reasonable market share of a market that a 10% at 10% of the patients being treated is already planned to be $35 billion. I would let I will let I will let Jay Z comment a little bit on why we think rezpeg is probably 1 of the best opportunities in treating a disease like AD.

Jonathan Zalevsky: Yeah. Hey, Mary. Thanks, Howard. Yeah. I mean, I think that it was this point was touched on briefly, OK, at first. I mean, 1 of the things that our market research showed us is that we would have good first line penetration. And that is really because the pretty much the entirety of the available approaches that physicians have and even the pipelines, including agents like STAT6. They are really all targeting the same pathway. Right? They are they are in a very Th2-dominant like, inhibitory state. They may be acting on more than 1 node. But they are acting really on the singular pathway.

And our market research really shows that a new MOA was extremely important for physicians. And they many indicated they would use a new MOA first. And so, we think this will really, you know, to help position rezpeg nicely As you heard about our phase 3 study design, they are they are really taking advantage of not just what we have learned, but really even strengthening you know, on where we saw the greatest differentiation in our phase 2 data. And they are pushing that even more to give rezpeg a really big opportunity for a very highly differentiated label at the end of this registration program.

Marc Frahm: Thanks for the question.

Operator: Thank you. Our next question comes from Jessica Macomber Fye from JPMorgan. Your line is open.

Jessica Macomber Fye: Hey, guys. Good afternoon. Thanks for taking my questions. Can you expand a little bit on your expectations for rezpeg's effect size in biologic experienced patients? Compared to biologic naive patients in AD how should we think about benchmarking the biologic experience AD phase 3 trial that you are running. Is EGLIS a good comp there, or if not, what should we think about? Thank you.

Howard W. Robin: Okay. that is thank you for the question. it is a very good question. I will let I will let either Jay Z or Mary answer it a little more but I can tell you that we looked very closely at whether there is any biological reason, any mechanistic reason why a patient who fails IL-13 would not respond to a completely different mechanism, and we could not find 1. So I do not I think we should be successful in treating experienced patients. I am gonna let Jay Z and Mary comment a little more on Yeah.

Mary Tagliaferri: I could just start, and Jay Z can finish. Yeah. Jessica, I think you are, you know, bringing up a very important point. Lebrikizumab was studied in the ADapt study, and these were patients treated with lebrikizumab after DUPIXENT, and there was no diminution of efficacy. 50-7 percent of the Dupi exposed patients who were treated with lebrikizumab had an EZ 75 at week 16, And in the lebri phase 3 studies, the ADVOCATE 1 and the ADVOCATE 2 the EZ75 at week 16 was 52% and 59% in that naive population. So, you know, we and the ADAPT study did include patients who also had an inadequate response to Dupi.

So, you know, given this precedence, this trial data, and the rezpeg mechanism of that augments the regulatory networks rather than just blocking a single downstream inflammatory mediator. We do expect the efficacy in the biologic JAK inhibitor experienced patients to be very similar to the naive patients. And I will let JZ expand.

Jonathan Zalevsky: Further if you want on the mechanism of action, JZ. No. Thank you. And I think you touched on a lot of the key points that, you know, our mechanism with the Treg induction, if anything, is meant to really help patients for whom inhibition of IL-13 or IL-4 and 13 is no longer adequate right, to control their disease. This is 1 of the know, 1 of the greatest features, right, of a Treg approach is it acts upstream of all of those factors. And we look forward, you know, to continuing to elaborate on this.

You raised a very important point, which is that while the ADAPT study is useful, as Mary explained, it is an open label single arm. Study. And so there has not really been a true benchmark published, for example, for placebo in this patient population. So, all of these are all things that are going to be components of some potential data to be reported. If Sanofi reports the results of their itilimumab study in this patient population, That was designed as a randomized control trial. That will create 1 important piece of information for the placebo But overall, we are extremely excited to have this third study as part of our registrational program.

We expect rezpeg has a very, very good opportunity to be efficacious in this patient population for all the reasons we have explained. And with a study like that under rezpeg's belt, it is part of our BLA. It really allows us to have a much more differentiated label. For Respact.

Operator: Thank you. Thank you. And our next question will come from Andy Hsieh from William Blair. Your line is open.

Andy Hsieh: Great. Thanks for taking our question. Howard, you mentioned about the physician survey that you did. it is super helpful for you to share with us. I am curious if you have probes the group about durability as a means for differentiation? Is there a time that these physicians are looking at either the 3-month or 6-month time frame. And my second question has to do with the type 1 diabetes trial that you are running with TrialNet. It seems like Respag is being treated for 6 months, but the primary endpoint is measured at 12 months. So can we infer from that there is a little bit of off treatment effect that we can extrapolate from the trial?

Thank you.

Howard W. Robin: Sure. Very good questions. I will let Mary mention answer the question regarding the trial med type 1 diabetes study. Excuse me. I can tell you from our market research time duration for onset of action was important, but the most important thing is long term durability. And you could see that you could see that if you look at our maintenance data. The drug the results keep getting stronger and stronger, and I expect that they will continue that way. I think 1 of the other things that was very important to physicians was a manageable side effect profile. And as I said, ISRs did not concern them at all.

They were much more con they were actually much more concerned about infections and conjunctivitis than they were ISRs. But over overall, a durability of response that continues to improve was very important to the physicians. Mary, do you wanna take the question on the type 1 diabetes trial?

Jonathan Zalevsky: Yeah. Thanks, Howard. I will actually I will do that. So I wanted to describe a little bit about how that study is designed. So if you recall that teplizumab studies, you know, the c d 3, antibody. So, you know, the way that works is it is a very short treatment course. Right? it is just a few cycles at the very beginning. But that actually is enough to alter the whole trajectory of the disease. So Tri Med was very excited that they could dose longer with rezpeg than they did with teplizumab. So that was exciting for them.

And so they selected a 6-month course The mixed meal tolerance test and, you know, peptide levels, they are measured throughout through a year. So they are measured both during the treatment as well as the 6 months after the treatment. But, again, the whole theory and understanding of the disease, its progression, and the worsening that people have is it is well understood. That a course of intervention will change the whole slope. Of the disease and provide the therapeutic benefit that we are looking for. So that is why the study was designed this way. it is very much in the right in the in the sweet spot.

Of how these kinds of type 1 diabetes centers are done.

Andy Hsieh: Thanks.

Jonathan Zalevsky: that is helpful.

Operator: Thank you. Thank you. And I am showing no further questions from our phone line. I would now like to pass it back to Howard W. Robin for any closing remarks.

Howard W. Robin: Well, thank you, everyone, for joining us today. And it is not often that a company develops a new MOA that has the potential to greatly help patients in need. And I wanna thank our employees and for their diligence and commitment and also our shareholders for their continued support. So stay tuned, and thank you very much again. Good afternoon.

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