Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today.

Today, you will hear from Howard Robin, our President and Chief Executive Officer; Dr. Jonathan Zalevsky, our Chief Research and Development Officer; and Sandra Gardiner, our Chief Financial Officer.

Dr. Mary Tagliaferri, our Chief Medical Officer, will also be available during the Q&A.

On today's call, we expect to make forward-looking statements regarding our business, including statements regarding the therapeutic potential of and future development plans for rezpegaldesleukin, the timing and plans for future clinical data presentations, and other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, and many of which are outside of our control.

Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our latest Form 10-K 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 Nektar's website at nektar.com.

With that said, I would like to hand the call over to our President and CEO, Howard Robin. Howard?

Thank you, Vivian. Good afternoon, everyone.

2025 was a pivotal year for Nektar, and we continue to build on this success with significant progress in 2026. In 2023, we unveiled our plans to focus on the advancement of our immunology and inflammation pipeline programs, which center around the biology of T regulatory cells.

In October of '23, we began the first phase 2 study of our novel T-reg biologic, rezpegaldesleukin, in patients with moderate-to-severe atopic dermatitis. In early 2024, we began our second phase 2 study in patients with alopecia areata.

Just last year, a third phase 2 study in type 1 diabetes was initiated with our collaborator TrialNet, who's funding and sponsoring this trial. In the second half of 2025, we saw the successful outcome of several years of hard work by our team as we achieved the first positive results from the two phase 2b studies of rezpeg in atopic dermatitis and alopecia areata.

The results validated that our novel regulatory T cell mechanism could produce clinically meaningful outcomes in two dermatological and inflammatory disease settings. Just last month, we reported on the long-term monthly and quarterly dosing results from the 36-week maintenance portion of RESOLVE-AD in atopic dermatitis.

These data showed a significant durability of efficacy that was highly competitive to what's seen with other biologics and establishes what our novel T-reg mechanism is capable of achieving. Monthly or quarterly dosing of rezpeg during the maintenance period showed a deepening of response with increases in EASI-75, EASI-90, and an up to fivefold increase in EASI-100 scores.

Both atopic dermatitis and alopecia areata are inflammatory, dermatological diseases that impact a significant number of patients worldwide. In the US alone, there are over 15 million people with moderate-to-severe atopic dermatitis, and it is estimated that today only 10% to 15% of patients are receiving biologic treatments for this chronic skin disorder.

Driven by the rapid adoption of biologics, the atopic dermatitis market is expected to grow to approximately $35 billion by the mid-2030s. Although Dupixent and IL-13s are the predominantly used therapeutics today to treat these patients, about 50% of patients fail to respond or lose treatment effect over time with IL-13-based approaches.

This leaves a significant opportunity for a novel immune-modulating mechanism like rezpeg to enter the treatment paradigm. The competitive landscape has recently narrowed for the late-stage novel MOAs being advanced to BLA filing.

We believe this puts rezpeg in a lead position as a novel MOA which could offer both a differentiated efficacy and safety profile with a better dosing regimen and the potential to offer patients complete clearance of disease over time. In alopecia areata, there remains a need for an efficacious and safe biologic with a better efficacy and dosing profile.

Currently approved JAK inhibitors are effective at regrowing hair in some patients, but they carry a number of drawbacks and more than half of physicians and patients are hesitant to use these agents because of the safety risks and the associated monitoring burden they pose. Importantly, the JAK class has poor durability and nearly all patients lose their hair after treatment cessation.

With the 36-week data from RESOLVE-AA establishing a clinical efficacy profile similar to low-dose JAK inhibitors in alopecia, we're looking forward to seeing the 52-week data from that study in April. For patients who enter the blinded 16-week treatment extension, we will be evaluating the potential of rezpeg to deepen SALT reductions, including SALT-20 responses.

Rezpeg's differentiated clinical profile and a safety database of over 1,000 patients treated to date, equivalent to 381 patient-years of exposure, provides an exceptionally strong basis for advancing rezpeg into phase 3 studies. In June, we will be randomizing the first patient in the phase 3 studies in atopic dermatitis.

We now have alignment with the FDA on our phase 3 dose, the 24-week induction treatment period, and other critical phase 3 study design elements. JZ will review that in a moment.

We expect to have the first data from phase 3 in mid-2028 and meet our goal to submit a BLA in 2029. We ended 2025 with $245.8 million in cash and investments and with no debt on our balance sheet.

Since year-end, we've also raised approximately $476 million in additional net cash through both a public offering and exercising a portion of our ATM. Our very strong balance sheet now allows us to move quickly into phase 3.

I'll now turn the call over to JZ, who'll share more on rezpeg and our other immunology programs. JZ?

Thank you, Howard. To start off, I'd like to comment in more detail on the significant progress we've made with rezpeg that Howard highlighted moments ago.

Rezpeg is a very unique T-reg biologic that capitalizes on a critical immune pathway. As a highly selective agonist of regulatory T cells, it is designed to address the underlying immune balance of multiple inflammatory pathways.

This past year, we have shown through our phase 2 clinical data sets that rezpeg is truly differentiated as a novel MOA and late-stage biologic candidate with a compelling efficacy profile and that it can also offer long-term extended dosing frequency. This phase 2 data adds to the 36-week off-drug disease control or remittive potential of rezpeg that we demonstrated in the earlier phase 1 trial.

Now, rezpeg is a phase 3-ready program, and we have one of the largest safety databases for agents in mid- to late-stage development in atopic dermatitis, which is now established in over 1,000 patients spanning about 381 patient-years of exposure. In atopic dermatitis, our 16-week induction data reported last June established that rezpeg has a rapid onset of key efficacy metrics, separating early from placebo after one or two doses on EASI-75, EASI-90, and itch relief.

Notably, our induction data established rezpeg as the first novel MOA to show strong itch relief in conjunction with skin clearance without the need for topical corticosteroids. We know that itch relief is a major driver of improved sleep scores and better quality of life for patients with atopic dermatitis, and this translated into achieving statistical significance on these patient-reported outcomes in our study as well.

At the high dose of 24 micrograms per kilogram given every two weeks in induction, we also saw comparable efficacy data for both EASI-75 and EASI-90 in the moderate and severe patient populations enrolled in the trial. The study was stratified by the vIGA baseline scores of 4 and 3, and efficacy was comparable among both these populations.

This attribute emerges as a key differentiating aspect from what has been seen with Dupixent treatment. Rezpeg has also shown promising positive results in treating atopic dermatitis patients with self-reported comorbid asthma.

We reported this data for the ACQ-5 endpoints for RESOLVE-AD last year at AAAAI. Outside of Dupixent, no other approved agent or agent in development has shown the ability to improve atopic dermatitis and comorbid asthma at the same time.

In induction, rezpeg resulted in statistically significant and clinically meaningful improvements in ACQ-5 scores at week 16 versus placebo in patients and a 75% improvement in these scores in patients with uncontrolled asthma at baseline. Approximately 1 in 4 atopic dermatitis patients also have comorbid asthma, and rezpeg is the only novel MOA to show improvements in this endpoint.

With the 36-week maintenance data reported last month, we demonstrated two additional critical features of rezpeg that differentiate it from approved agents and those in development. First, we saw significant maintenance of efficacy, and we also saw a deepening of response with continued treatment out to 52 weeks, including improvements in EASI-75, EASI-90, itch, and vIGA endpoints.

Notably, we saw an up to fivefold increase in EASI-100, as Howard mentioned earlier, underscoring the potential for rezpeg to give patients complete disease clearance with extended treatment over time and setting a new benchmark in atopic dermatitis. Second, we established that extended monthly and quarterly dosing could be used as a long-term treatment regimen with rezpeg after inducing responses.

As I stated earlier, with over 1,000 patients treated to date and about 381 patient-years of exposure, rezpeg has a well-established, long-term, and favorable safety profile. As seen in our reported data, we have generated a differentiated safety profile with no increased risk of systemic adverse events such as conjunctivitis or infection or malignancy.

The RESOLVE-AD data informed our phase 3 program, and we will start the first pivotal study in June of this year. Following our end-of-phase-2 meeting, we now have alignment on plans for a phase 3 program to evaluate a single dose, 24 micrograms per kilogram twice monthly, for a 24-week induction period.

Patients who achieve EASI-75 or IGA responses will then be rerandomized to monthly and quarterly regimens out to 52 weeks. The design of phase 3 will be similar to those studies used for registration of other biologics.

Our plan is to utilize, as other phase 3 programs have, the primary endpoint of an IGA-related endpoint required for US registration and an additional EASI-75 endpoint to support EU approval. Our phase 3 program will evaluate both biologic-naive and treatment-experienced patients.

Beyond atopic dermatitis, in December, we also established a proof of concept with the data from RESOLVE-AA for rezpeg in severe to very severe alopecia areata. We were pleased that these data have been accepted as a late-breaking presentation at the upcoming AAD meeting at the end of March.

It is the only data set in alopecia areata that was accepted for presentation in the late-breaking session. In the RESOLVE-AA study, as we reported in December, rezpeg demonstrated an efficacy response that met our target product profile expectations, which was to achieve efficacy similar to low-dose JAK inhibition at week 36 with every-two-week dosing and maintain a more attractive and favorable safety profile.

We believe the data position rezpeg as a potential first-in-class biologic in alopecia. As Howard stated earlier, the RESOLVE-AA study also included a blinded 16-week extension for patients who reached week 36 in the study but had not yet achieved a SALT-20 score.

We plan to report the data from this treatment extension in April. To that end, we will initiate a quiet period beginning April 1st until we unblind and report the data from the treatment extension.

As a reminder, the only available systemic therapies that are FDA-approved for the treatment of alopecia areata are JAK inhibitors, but these contain a number of black box warnings and laboratory monitoring requirements. Nearly all patients also experience hair loss after treatment cessation.

With the limited treatment options available in alopecia areata, we believe there's a unique opportunity for a novel immune-modulating T-reg mechanism like rezpeg to offer attractive dosing as compared to a daily pill and a potentially more favorable safety profile. Following our 16-week treatment extension data, we expect to hold our end-of-phase-2 meeting with the FDA for alopecia areata in the second quarter of this year.

Following that, we plan to share more about our plans for advancing into phase 3. Before I move on to our earlier antibody program, I want to mention our ongoing phase 2 study with rezpeg for type 1 diabetes.

This study, sponsored and funded by TrialNet, is evaluating rezpeg in patients with new-onset stage 3 type 1 diabetes. Per protocol, patients will be randomized 2:1 versus placebo and receive rezpeg every two weeks for six months.

The study is broken into three cohorts, beginning with adult subjects, ages 18 to 45, and moving into patients as young as 12 and then 8 years of age. We are excited to be working with TrialNet.

This consortium of type 1 diabetes specialists in the US also ran the first studies for Tzield, also known as teplizumab, in type 1 diabetes. They have a strong commitment to finding and evaluating new therapies that can help patients with this devastating diagnosis.

We believe and expect initial data from the TrialNet-sponsored phase 2 sometime in 2027. One of the important paradigms of our work is that by creating a first-in-class T-reg-targeting approach like rezpeg, we've confirmed what we've always felt as immunologists: that T-regs were essential for so many different diseases and that they could be therapeutically targeted for disease treatment.

Based upon low-dose IL-2 and T-reg biology, either genetically or assessed clinically, we know that there are so many indications beyond what we're exploring in our current phase 2 studies that are potential opportunities for rezpeg. These include therapeutic areas such as our skin and autoimmune diseases, Th2-driven conditions such as food allergies or asthma where we've already seen a signal, and chronic rhinosinusitis.

It also includes skin disorders such as dermatomyositis and also potentially autoimmune diseases such as Sjögren's syndrome. As we advance rezpeg in phase 3, we look forward to the possibility of generating additional proof-of-concept data in additional indications, which could expand the future label for rezpeg.

Moving on to our earlier pipeline programs, NKTR-0165 and NKTR-0166 are TNFR2 agonist and bispecific programs. We expect to present preclinical data from this program at a scientific conference in the second half of 2026.

This molecule has a very high specificity for signaling through TNFR2 on T-regs to enhance and optimize their ability to regulate the immune system, which we believe could be impactful in multiple sclerosis, ulcerative colitis, vitiligo, and other I&I indications. In the first quarter, we announced an academic research collaboration for NKTR-0165 with Dr.

Stephen Hauser at UCSF to explore the potential role of TNFR2 agonism in the reduction of neurodegeneration and promotion of neuroprotection and cell repair. The work being funded by UCSF will look at NKTR-0165 in patient-derived B cell models of multiple sclerosis.

We're looking forward to working with Dr. Hauser to inform future development work for this important molecule.

Leveraging our learnings from the development of NKTR-0165, we have designed a bispecific molecule called NKTR-0166. This bivalent antibody incorporates a TNFR2 agonist epitope and an antagonist epitope that has been previously validated in the treatment of rheumatology diseases.

As a dual agonist-antagonist of known pathways, NKTR-0166 has the potential to modify disease pathogenesis in a number of autoimmune disorders. We're planning for IND submission for one or both programs in 2027.

With that, I'll now turn it over to Sandy to cover the financials.

Thank you, JZ, and good afternoon, everyone. On today's call, I'll review our quarterly and full-year 2025 financials and share our preliminary financial guidance for 2026.

We ended 2025 with $245.8 million in cash and investments and with no debt on our balance sheet. In February, we completed an underwritten public offering for $460 million, resulting in approximately $432 million in net cash proceeds to the company.

We also accessed approximately $44 million of net proceeds to date from our existing $110 million ATM facility in 2026. We now have a strong balance sheet to invest in our pipeline and advance our phase 3 program in rezpeg.

I will now provide a quick review of our 2025 financials. Our revenue was $21.8 million for the fourth quarter and $55.2 million for the full year 2025.

Our R&D expenses were $29.7 million for the fourth quarter and $117.3 million for the full year. Our G&A expenses were $11.2 million for the fourth quarter and $68.7 million for the full year.

Our noncash interest expense for the fourth quarter was $9.8 million and $26.2 million for the full year. Our net loss for the fourth quarter was $36.1 million, or $1.78 basic and diluted net loss per share.

For the full year of 2025, our net loss was $164.1 million, or $9.73 basic and diluted net loss per share. We are providing very preliminary 2026 guidance on today's call.

The guidance ranges are wide as we are still completing the planning and budgeting activities for the rezpeg phase 3 program. We began investing in startup activities for this program last year with production of drug supply and placebo.

As Howard stated earlier, we plan to randomize the first patient in June. We expect an updated 2026 budget at that time and will update our financial guidance as necessary.

With respect to our 2026 P&L guidance, our noncash royalty revenue for the full year of 2026 is expected to be between $40 and $45 million. Based on our current forecast, we anticipate that full-year R&D expense could range between $200 and $250 million, including approximately $5 to $10 million of noncash depreciation and stock-based compensation expense.

We expect G&A expense will decline in 2026 over 2025 to a range of $60 to $65 million. This includes approximately $5 million of noncash depreciation and stock-based compensation expense.

Our full-year noncash interest expense is expected to be between $30 and $35 million. Additionally, we do not expect any significant gain or loss on our equity method investment in 2026.

Lastly, we expect to end 2026 with approximately $400 to $460 million in cash and investments. With that, we'll now open the call for questions.

Operator?

Good afternoon, team. Thank you so much for all the great updates.

Maybe quick question that sort of two-part. One is, given congrats on presenting the RESOLVE-AA study at the AAD conference, hope to understand, JZ, of what type of new data we could see, or is it just more an opportunity to showcase it?

Then part two is maybe help us frame what do you hope to see in this blinded 16-week treatment extension period. What does rezpeg need to show to be highly competitive, both in regards to mean SALT reduction as well as SALT-20?

Thank you, and I'll jump back in the queue.

Thanks, Yasmeen. One of the things that will be presenting later and that's coming up in the future data presentation is remember that the way the study was designed is that it was a 36-week treatment period.

However, patients that had begun to grow hair, but had not yet reached a SALT-20, they were permitted to advance into a 16-week additional extension, which was also a blinded portion of the study where they could receive dosing all the way to week 52. When we presented the data in December, we had already indicated that there were already three patients that had entered into that period as of the time of that December data cut when we presented the results last year that had already reached a SALT-20 after week 36.

Those patients were not even considered in the week 36 numerator because their response happened afterwards. When you kind of been asked what is the tone of the presentation that we'll be making, once we begin our quiet period in April and after we present the top-line results, we'll be sharing the additional effect of treatment with rezpeg and the potential of additional patients to convert to achieving SALT-20 responses as well as deepening their SALT reductions over that additional 16-week treatment period.

I think you're kind of potentially starting to see a bit of a paradigm. We saw in atopic dermatitis, as we extended the duration of dosing to week 52 in maintenance, patients treated with rezpeg continued to develop additional efficacy.

We think there's a potential that that could happen as well in alopecia areata, as we've already seen three patients achieve responses that way. We'll be sharing the totality of that patient population.

All of the patients will have completed week 52 that entered into that extension period, and that will be the nature of the results. In terms of what we'd like to see for what would be competitive, rezpeg has already demonstrated quite a different profile from a JAK inhibitor.

When you consider all of the upsides of growing hair, but then balanced by the downsides, as both Howard and I mentioned in our presentation, there are really significant safety issues and risks that make taking a JAK inhibitor chronically very challenging. Particularly, it's a class of drug that's difficult for dermatologists to use owing to the laboratory monitoring and the additional work and risk that the patients have.

Then when patients have to stop taking a JAK inhibitor for any reason, pretty much everyone loses all the hair that they might have grown when they were on the JAK inhibitor. We'd like to see an efficacy profile that reaches low-dose Olumiant.

I think we have a very good shot of getting to that level. Then we'd like to deliver all of the other things that rezpeg has already shown, which is a completely differentiated safety profile, a much more convenient dosing frequency relative to a once-a-day pill, and really an opportunity to provide a much better biologic that can be used chronically in this chronic indication.

Thank you for the question, Yasmine.

Thank you.

Hi. Thank you for taking the questions, and congrats on the progress.

Regarding the phase 3 program in atopic dermatitis that's expected to initiate next quarter, would you expect the ACQ-5 data to make its way into a potential label from those trials? If so, I'm wondering how enabling you would expect that to be from a commercial standpoint relative to dual labeling both in atopic derm and asthma.

Then, sorry if I missed it, I'm curious also what percentage of bio-experienced patients you plan to enroll in your atopic dermatitis trial that's upcoming. Is there a defined target there?

Sure. Mary, would you like to answer that?

Sure. Hi.

We are including the ACQ-5 in the phase 3 program, and we will look at this at baseline and through induction, and then we'll also look at the ACQ-5 through maintenance. We are going to power for and we will control for multiplicity for the ACQ-5, and we will make every effort to include that into the label.

That is certainly a part of our plan. With respect to bio-experienced patients, we are anticipating roughly 25% of the patients in our phase 3 program will be bio-experienced and then 75% of patients will be biologic and JAK inhibitor naive.

Very helpful. Thank you.

Thank you.

Oh, hi, team. This is Cheng on the call for Jay.

Thanks for taking the questions, and congrats on the progress. Just on the AD part, I'm just wondering, for the phase 3 trial and also for future commercial launch, what are the formulation, or device, for rezpeg you're thinking right now?

Also I'm wondering if there are any protocol guidance or implementation on ISR mitigation strategy for your phase 3 or you think that's necessary. Thank you.

Go ahead, Mary. I'll cover the question about the formulation, and then I'll turn it over to Mary.

Rezpeg is a very low-volume administered agent, most patients receive 1 milliliter to 2 mils max depending on their body weights. Then our plan is to run phase 3 in the same way that we ran the phase 2, where the drug was presented as a vial and then at study site, it's drawn up and administered to the patient by staff at the study centers.

Our plan for the commercial launch is to launch rezpeg in an autoinjector coupled with an autoinjector device. For that, we'll be switching to what's called weight-banded dosing, we won't need to use weight-based dosing because patients will be dosed according to their body weight.

Then we know that'll have a lot of opportunities and also advantages. This will be a very straightforward self-administered product, very similar to all the biologics that are used in single-use pen devices.

Then, regarding some of the way we will run the phase 3, I'll turn that over to Mary.

Hi. First, I think it's a good idea to just review the ISR cases that we've seen across our program.

And 99% of the ISRs were mild to moderate in severity, with the vast majority being mild, and only 1% are severe. We do see a very, very, very low dropout rate due to ISRs.

The reason for that is these ISRs are not like what were experienced when taltz was launched. We do not commonly see pain.

We do not commonly see pruritus. The vast majority of patients, 96% of them, are just having erythema, or redness.

Likewise, these patients are not having ISRs every time they receive an injection. In fact, we see really the vast majority of patients are really only having two or fewer during the course of treatment.

In terms of how these are managed, patients use cold compresses with ice, and if need be, they can also use a topical corticosteroid. Since the vast majority of patients don't have pruritus, for the most part patients are not needing to use a topical corticosteroid.

We did have Dr. Jonathan Silverberg on in our last presentation of the maintenance data, and he certainly underscored that the trade-off is an easy choice for patients.

These patients are having severe itch, and with rezpeg having that very rapid itch relief and resolution of atopic dermatitis, with the trade-off being an erythematous ISR that overall the risk-benefit highly favors rezpeg as a treatment for atopic dermatitis.

Great. Thank you very much.

Great. Congrats for the progress, and then thanks for taking the question.

My question is related, I think the last data cut for the alopecia areata, you have three patients reach for 20 and then another seven patients reach for 30. Just curious, what are the dosing for those three and the seven patients?

Then given if they're deepening the response, seems you're getting towards high-dose Olumiant, based on your market research and then your advisor, will this efficacy reaching high-dose Olumiant will change the potential clinical adoption compared to the low-dose? Thank you.

Thanks.

Thank you for your question, Roger. I just want to reiterate that this study is blinded, right?

When we share the results coming up very soon in April, we'll unblind and we'll present all of the results for all of the patients that made it through to the extension period. That'll be an update for us very, very soon.

Then in terms of the TPP, one of the really important elements is that this is a biologic and it brings a completely different profile. Our objective was always to achieve the TPP of low-dose JAK inhibitor Olumiant, and we believe we've already met that with the data that we have.

We believe the 52 weeks is the correct duration of extensions. For example, in the phase 3 that we plan, we know we'd be treating longer than 36 weeks.

We know that there's an opportunity with the additional treatment duration, to potentially elicit even more efficacy of effect. We think there's just this really white slate kind of an opportunity because the first time a biologic moves into an autoimmune indication, it could have a very profound effect on prescribing patterns from physicians, as many doctors are much more comfortable prescribing a safer biologic as opposed to a more difficult to manage and potentially more challenging agent like a JAK inhibitor.

It's something we're very, very excited about, and it's a data update that we're really looking forward to coming up. It's a TPP that we think could be a really big opportunity for rezpeg in the future.

Got it. Thank you.

Yes, good afternoon, team. Thanks for taking our questions, and congrats on the progress.

Another alopecia question, sorry if I missed this. What incremental data relative to the December update you would get at the conference?

If you could comment on any plans for releasing the off-therapy data for the responders that you had? Know you had efficacy responses still climbing as part of 16-week extension, wasn't sure at what point you'd look at the off-therapy data.

Then just a little high-level question for Howard, if I may. The EASI-100 responder rate, how important do you think of that as a differentiator?

I don't know if many agents get there. I also ask that in context of the initial framing of a large growing AD market, which could have multiple entrants around the time you get on market in 2029.

I understand the near-term launch landscape has certainly narrowed, but just thinking longer term.

I'll answer the last part of the question first and then turn it over to JZ and Mary. I think EASI-100 hasn't been looked at very closely, and it hasn't been reported very much because very few people attain the levels that we've been able to attain.

If you look at the maintenance data where we have achieved 30% or so EASI-100 scores, again, I think that's very important, and it leads to effectively complete clearance of the disease in these patients over time. While it hasn't been talked about much and people talk about EASI-75 and EASI-90, that's because it's really difficult to achieve EASI-100, and we've done it.

That I think that says a lot about the potential for the T-reg mechanism in general. I'll turn the rest of the question over to JZ and Mary.

Sure. Thanks, Howard.

Mayank, you asked many, many questions in one question, 12 parts. Let me just try make sure I catch them all.

In terms of the AAD presentation, it's coming up in just a couple of weeks, you can see all of the data that's presented, and it'll be presented in the medical conference, right, by a physician. In terms of the rest of the study, we do have a catalyst later this year, which will be the 24-week off-drug period of evaluation from the alopecia areata study.

That is not going to be data that we touch on either at AAD or in the April data presentation, which just focuses on the end of treatment at week 52. In the second part of this year, in the later part, in the fourth quarter, we'll present the results of the 24-week off-drug period.

Those will be just future catalysts to look forward to for rezpeg in alopecia areata. Thank you for your question.

Thank you.

Hi. Good afternoon.

Thanks very much for taking the question. Let me ask one about the type 1 diabetes study.

I'm wondering if you could just share a little bit more about that trial. I know there's growing interest in development here.

I'm wondering how you see rezpeg potentially differentiating from other approaches in the clinic. Should that 2027 data include C-peptide preservation data?

Then if I can squeeze one more in, just more broadly, as you think about advancing rezpeg into additional indications, you mentioned quite a few in your prepared remarks, JZ, how do you think about prioritizing those for which ones might be the first to potentially advance into the clinic? Thanks very much.

All right. Thanks, Sam.

In the type 1 diabetes, it was very interesting because TrialNet was actually looking for a regulatory T cell-targeting approach. It was very exciting because there was a lot of sort of mutual drive for bringing that forward.

Then it was also very competitive process working with them because they have many things that they can choose from. We were very, very excited that they selected rezpeg to run the study.

Now, one of the underlying scientific themes is that it's a well-known sort of theory about the role of regulatory T cells in this disease and the sort of how thymic antigens end up being bad for driving the autoreactivity against the islet cells and that a loss of T-reg control, really really exacerbates. There was a goal in order to elevate T-regs in these patients in order to slow the progression of the disease and ideally, overcome it all together.

The first step in sort of achieving this long mission is this therapeutic intervention study. This trial is really run in very much in the same way that the first teplizumab studies were run.

A big difference is that we're giving a six-month treatment as opposed to just a short burst, just a few weeks, as how teplizumab is dosed. Then the goal is, of course, to really slow down the rate of decline.

There will be an opportunity for early data next year. It's a little early to say the full extent of what that would be, Sam.

However, yes, mixed-meal tolerance tests, right, with C-peptide is obviously one of the key endpoints in the study, along with HbA1c levels and also insulin usage. Those are the key activities that are being tracked in the patients.

It's a well-designed study with probably the most highly qualified team of people to do that kind of study in the TrialNet consortium. Then in terms of the other indications, it is still something that we're deciding on, which indications and which ways to go, but I think that we've seen so many examples of data from our own program that would really make some indications quite attractive.

I think it's quite clear that this mechanism, in both skin diseases and in diseases that have a Th2 drive, has quite a lot of potential. Seeing the results that we saw in patients with comorbid asthma was very exciting.

That makes that a very, very interesting indication. There are a number of allergic indications as well that are also potentials.

This is something that we'll give more updates on in the future in the coming months. Thank you.

We just may want to add too just in terms of the differentiation in type 1 diabetes, Tzield is not an easy drug to give. It's administered as a 14-day course of IV infusions with a step-up dosing schedule.

Patients can commonly have cytokine release syndrome. Then, you do have to give a number of other medications, an antipyretic, an antihistamine, maybe an antiemetic.

Then clinicians have to monitor for leukopenia, rash, and even elevated liver enzymes. In contrast, an outpatient dosing regimen with rezpeg where there's not routine monitoring and you don't see cytokine release syndrome, I think also affords a highly differentiated and more favorable, both safety profile as well as drug that's administered outpatient as opposed to as a IV infusion in an infusion center or even hospital.

Hey, Howard and team. Congrats on the progress.

Can you guys hear me okay?

Yes, we can. Yep.

Oh okay,

sounds good. I two questions.

I know you going to present the extension data from the AA study in April, but if it's allowed, could you tell us how many patient complete the extension phase? Also, when the patient finished the extension, do they have choice to continue on the drug or everybody goes to the off-treatment period?

That's question one. Question two is could you give us a quick update on the Lilly trial?

Thanks.

JZ, why don't you take the first part? Go

ahead. Okay.

Sorry, Howard. Really quickly.

As we announced in December, there were 23 patients that were ongoing in the 16-week extension. If you remember, Arthur, we had a waterfall plot, and they were the green dot patients on that chart.

The data update that's coming in April will be when everybody completed the 52-week treatment. Those 23 people, as well as anyone that had completed it prior.

Then for this trial, all treatment stops for all patients at either week 36 or week 52 for the people that went into the extension. Afterwards, everyone is followed for 24 weeks off-drug.

Then for the second question, I'll turn it over to you, Howard.

Thanks, Arthur. Look, I obviously can't comment in detail on this type of litigation.

This trial was scheduled for last year. It's in federal court, because of the government shutdown last year, it was moved to this year because the courts were shut down.

This trial is scheduled for September 8th, jury trial in federal court in San Francisco. We're fully committed to pursuing this, and we certainly think we were harmed, and let's see how this plays out in court.

Hope that's as much of an answer as I can give you at this point, but thanks for the question.

Awesome. Thanks for picking my question.

Great. Thanks for taking our questions.

Maybe just one on some of the macro developments in the last couple weeks. Galderma kind of talked about increasing confidence in the atopic dermatitis space.

I guess, part one, I'm curious if that alters your market sizing guidance that was provided during J.P. Morgan.

Then also, kind of data update from Pfizer with its trispicific asset in atopic dermatitis. Not a lot of numerical data, but kind of curious about your take on that.

Thanks.

JZ, you want to answer that one?

Sure. Yeah.

Maybe I'll start off on the Pfizer one, and then, Mary, you can touch on the Galderma update. Pfizer did present limited data in a press release covering a couple of molecules that were multispecific molecules that were inhibiting either IL-4, 13, and TSLP or 4, 13, and IL-33.

They showed some very encouraging, placebo-adjusted efficacy data. It's a very interesting question because sort of combining known mechanisms into multispecific agents, whether bi- or tri-specific, is one way of achieving combination kind of strategy.

It's also a way of kind of bringing in all the known mechanisms into one thing. It has a potential to be helpful, that it is also kind of an incremental approach focusing on known and validated agents.

We think there's an opportunity with a mechanism like rezpeg as a T-reg-targeting mechanism to provide the patient a much more holistic and potentially comprehensive kind of efficacy because really what a T-reg is aiming to do is to fix the underlying pathology of the disease. Not take away pathways that are disease drivers per se, but to fix what caused those pathways to be disease driving in the first place.

That's why we think we've been observing in atopic dermatitis with ongoing dosing, such a growing level of efficacy, a deep maintenance, and the potential for patients to really do better. It's very interesting.

Most medicines you take, they tend to do worse for you over time, but in our studies with rezpeg, we see the patients do better over time. We think there's a lot of opportunity there.

We also are very excited that rezpeg is much further ahead, right? When you think about the programs that are initiating phase 3, rezpeg is at a very competitive position, and it's a novel MOA, and it has the opportunity to provide very differentiated opportunity for patients.

Mary, I'll turn it over to you for the Galderma question.

Mary, before you jump in, let me just add to one thing JZ said. Look, it's a great question.

I just think it's important to understand the size of this market. Market, as I said earlier, is expected to be by the mid-30s, $35 billion, and 10% only about 10% of patients who have atopic dermatitis are taking a biologic.

The potential for market growth is enormous. There's lots of room for various mechanism of actions here.

I don't think that becomes a real hurdle. I do think JZ is absolutely correct that we, as a T-reg agonist, are taking a very, very different approach than IL-13, IL-4, whatever blockade.

Let's see how it all plays out, but we're dealing with a market that's very, very large, and I think there's room for a number of different opportunities here. Mary, you want to go ahead?

No, I would just say that when we look at the ARCADIA phase 3 data for nemolizumab, remember those trials were in combination with topical corticosteroids. Patients really don't like to slather themselves with topical corticosteroids.

By the time they start a biologic, it's because they've already, for a very long time have been using topicals and they haven't controlled their disease. When you look at those phase 3 programs, the EASI-75 ranges between 42% and 44% for nemolizumab in combination with the topical corticosteroid.

I'd just point everybody to look again at our presentation from February, where we showed those placebo patients who were the placebo patients from the induction and crossed over for both 16 weeks of treatment and 24 weeks of treatment, where the EASI-75 was higher than what we saw with nemo plus topical corticosteroids. It was 53% at week 16 and 58% at week 24.

I just think, even, we saw very rapid itch relief, and then when you look head-to-head at EASI-75, rezpeg seems to provide a deeper response than nemolizumab plus a topical corticosteroid. From perspective that Howard said, of course, this is a huge market, and there's lots of opportunities for multiple agents.

I think when you stack up our data compared to nemo plus a topical corticosteroid, we have very, very compelling data which would really show that a physician would like to select an agent with a deeper EASI-75 for the benefit of their patients. Thanks for the question.

Thank you. I want to thank everyone today for joining us and for your continued support.

We really greatly appreciate it. I want to thank our employees who continue tirelessly on behalf of patients.

Together, we've transformed our scientific hypothesis into real and potentially meaningful therapeutic options for patients. We look forward to initiating our phase 3 studies in atopic dermatitis in June and sharing our 52-week alopecia areata data in April.

Stay tuned. Thanks, everybody.