Nektar outlines $1B market opportunity for REZPEG in alopecia areata as Phase III plans advance

Earnings Call Insights: Nektar Therapeutics (NKTR) Q3 2025

MANAGEMENT VIEW

* CEO Howard W. Robin welcomed Dr. Mary Tagliaferri back as Chief Medical Officer, noting her previous role in the successful Phase II program in atopic dermatitis and her return as the company prepares for Phase III initiation next year. Robin stated, “This quarter and year-to-date, we've remained laser-focused on pursuing regulatory T cell science across our pipeline and preparing to advance our lead program, rezpegaldesleukin, also known as REZPEG, into Phase III development.”
* Robin highlighted that REZPEG’s mechanism, focused on Treg stimulation, is “highly differentiated” and has produced meaningful clinical data, citing recent recognition from the Nobel Committee, which included REZPEG’s Phase Ib data in its background documents for the recent Nobel Prize in Physiology or Medicine.
* Robin reported “compelling results from the 16-week induction period of the 400-patient RESOLVE-AD study of REZPEG in moderate to severe atopic dermatitis,” with further data to be presented at the 2025 ACAAI meeting focused on patients with both atopic dermatitis and asthma. He emphasized that REZPEG may address comorbidities not resolved by current IL-13 or OX40 pathway blockers.
* The company is preparing for a Phase III program in atopic dermatitis, with an end of Phase II meeting with the FDA planned before year-end, and expects to present top line results from the Phase IIb RESOLVE-AA study in alopecia areata in December. Robin stated, “REZPEG could be introduced as the first biologic in the setting of alopecia areata, representing an additional $1 billion market opportunity.”
* CFO Sandra Gardiner reported, “We ended the third quarter of 2025 with $270.2 million in cash and investments and with no debt on our balance sheet.” Gardiner also stated, “We now expect to end the year with approximately $240 million in cash and investments, up from our prior guidance of $100 million to $185 million... Based upon our higher year-end cash balance, we are extending our cash runway guidance into the second quarter of 2027.”

OUTLOOK

* Management expects to present 52-week maintenance and escape arm data from the RESOLVE-AD study in atopic dermatitis in Q1 and top line results from the 36-week RESOLVE-AA study in alopecia areata in December. REZPEG is positioned to enter Phase III in atopic dermatitis following the FDA meeting, with the goal to initiate the program next year.
* The company plans to advance its lead pipeline antibody, a TNFR2 agonist, into the clinic next year.
* Gardiner raised year-end cash and investment guidance to $240 million and extended the cash runway into Q2 2027, compared to previous guidance of $100 million to $185 million and runway into Q1 2027.

FINANCIAL RESULTS

* Cash and investments at the end of Q3 were $270.2 million, bolstered by a July secondary offering and additional ATM facility proceeds.
* Noncash royalty revenue for Q3 was $11.5 million, with full-year expectations unchanged at approximately $40 million.
* R&D expense was $27.3 million and G&A expense was $16.1 million for Q3. Full-year guidance for R&D remains between $125 million and $130 million; G&A guidance is $70 million to $75 million.
* Net loss for Q3 was $35.5 million or $1.87 basic and diluted net loss per share.

Q&A

* Dominic (Piper Sandler) asked about upcoming ACAAI data in atopic dermatitis with asthma. Robin clarified there are no plans for an asthma indication but emphasized the “important component of differentiating REZPEG” for comorbid patients. Zalevsky explained the study’s ACQ-5 analysis allows assessment of REZPEG’s effect on asthma symptoms in atopic dermatitis patients.
* Julian Harrison (BTIG) inquired about remittive potential and differentiators. Robin stated, “this mechanism, Treg mechanism, has received a lot of attention, especially in the Novo Prize in physiology or medicine.” Zalevsky emphasized the value of a safe, sustained treatment effect, noting the lack of black box warnings for REZPEG compared to JAK inhibitors.
* Cheng Li (Oppenheimer) asked about timing for Phase III in alopecia areata and partnership strategy. Robin indicated Phase III could start next year, pending December data, and highlighted physician reluctance to prescribe JAK inhibitors for alopecia due to safety.
* Cha Cha Yang (Jefferies) asked about benchmarks for REZPEG in alopecia and IL-2 studies. Zalevsky indicated the company’s larger study size and differentiated Treg mechanism, stating REZPEG “substantially exceeds anything that low-dose IL-2 has been able to present.”
* Mayank Mamtani (B. Riley) asked about off-treatment responder rates and auto-injector development. Zalevsky noted the ongoing nature of the study, with a 24-week off-drug observation to assess durability, and confirmed the auto-injector would be available at launch.
* Yu He (H.C. Wainwright) explored REZPEG’s advantages over JAK inhibitors in alopecia. Zalevsky pointed to REZPEG’s safety, lack of black box warning, potential for maintenance of hair regrowth, and first biologic status.
* Tsan-Yu Hsieh (William Blair) questioned placebo rate management in Phase III and manufacturing readiness. Robin stated the company has secured manufacturing through Gannet BioChem and contract partners, while Tagliaferri detailed rigorous criteria to minimize placebo response in trials.

SENTIMENT ANALYSIS

* Analysts focused on differentiation, market potential, safety profile, and regulatory milestones, with a generally positive and constructive tone, probing for data validation and market readiness.
* Management maintained a confident and forward-looking tone in prepared remarks and responses, repeatedly emphasizing differentiation, strong data, and financial position. Robin stated, “I think it's going to have very good prospects,” reflecting optimism.
* Compared to the previous quarter, the sentiment remained confident, but with greater emphasis on market opportunity, cash position, and regulatory preparation, as well as anticipation for near-term data catalysts.

QUARTER-OVER-QUARTER COMPARISON

* Management’s guidance on cash and investments improved significantly, from $180-185 million at year-end (Q2) to $240 million (Q3), with the cash runway extended.
* Strategic focus shifted from trial design and Phase III readiness in Q2 to imminent Phase III initiation and data catalysts in Q3.
* Analysts in both quarters concentrated on regulatory engagement, competitive benchmarks, and trial design, but Q3 saw increased attention to differentiation in comorbid conditions and market opportunity in alopecia areata.
* Management tone remained confident both quarters but was more specific about financial and clinical timelines in Q3.

RISKS AND CONCERNS

* The company noted the need for novel mechanisms in atopic dermatitis and alopecia areata, limited treatment options, and physician reluctance to use JAK inhibitors due to safety.
* No new business risks or litigation updates were highlighted during the quarter.
* Management described strategies for minimizing placebo response and securing manufacturing capacity for REZPEG.

FINAL TAKEAWAY

Nektar Therapeutics emphasized its readiness for pivotal advancements, with a robust financial position, imminent key data readouts for REZPEG in alopecia areata, and significant market opportunity as the first biologic in this indication. Management reiterated confidence in REZPEG’s differentiated mechanism, strong safety profile, and the company’s capacity to advance into Phase III programs in both atopic dermatitis and alopecia areata, supported by extended cash runway and preparations for regulatory engagement.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/nktr/earnings/transcripts]

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