Nektar Therapeutics (NKTR) Earnings Call Transcript

[Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to Vivian Wu from Nectar 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 Robin, our President and Chief Executive Officer; Dr. Mary Tagliaferri, our Chief Medical Officer; Dr. Jonathan Zalevsky, our Chief Research and Development Officer; and Linda Rubinstein, our Chief Financial Officer. 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 rezpegaldesleukin, the timing and execution of clinical trials, expectations for clinical data and regulatory filings, potential strategic partnering activities, financial guidance, and other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, many of which are outside of our control. For discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent Form 10-K and subsequent filings. We undertake no obligation to update these forward-looking statements except as required by law. Live webcasts and replays of this call will be available on the investor relations section of our website at nektar.com. With that, I'll turn the call over to Howard.

Thank you, Vivian. Thank you to everyone for joining us this afternoon. 3Q was a transformative quarter for Nektar as we advanced rezpeg into Phase 3 studies. Building on its compelling Phase 2 results across two key immune derm indications, we initiated a comprehensive Phase 3 plan for rezpeg in both atopic dermatitis and alopecia areata. Our global Phase 3 studies in atopic dermatitis have started, and our Phase 3 study in alopecia areata is on track to start in December, earlier than was originally planned. We said last quarter we anticipate our first top-line data readouts for the atopic dermatitis studies will be in the summer of 2028. In the U.S. alone, over 31 million people are estimated to have eczema. The U.S. market for treatments for this chronic disorder is expected to grow to over $30 billion by 2033. In spite of a number of approved systemic therapies to treat patients with moderate-to-severe atopic dermatitis, only 1 in 4 patients today receive a systemic treatment. Atopic dermatitis is a highly heterogeneous disease, meaning the biology driving the underlying disease state can be complex and can vary significantly from one patient to another. The current approved biologics target 1 single inflammatory pathway, specifically the type 2 inflammatory pathway and mostly through IL-13 cytokine blockade. In order to ensure we have treatments that can address the needs of all patients with atopic dermatitis, it is necessary to have novel mechanisms that target the heterogeneous nature of this disease. Importantly, today we know that at least half of patients on an existing biologic report inadequate control of their atopic dermatitis for this reason. To that end, rezpeg's novel Treg mechanism offers a critically important therapeutic modality for patients and one that is currently missing from the treatment armamentarium. We know from our market research that physicians are looking for different mechanisms of action than those that are already approved. Rather than blocking a single downstream inflammatory pathway, rezpeg's first-in-class T-reg approach selectively expands the immune cells to restore immune balance; in other words, we're addressing the underlying inflammatory drivers rather than simply controlling the symptoms of the disease. J.Z. will talk more about some of the important translational work we have from rezpeg AD, which demonstrates the unique profile we have for rezpeg. In the commercial landscape in atopic dermatitis, we've already seen clear evidence of the demand for a mechanism outside of IL-13. Nemluvio, which is an IL-31 cytokine blocker, gained a label in atopic dermatitis only in combination with topicals. And based on recent U.S. claims data, Nemluvio is capturing at least 10% of new treatment starts about 7 quarters into launch. In fact, since its launch, Dupixent has lost these new-to-brand patients' starts, going from an 81% share of starts in 2024 to 65% today, with more than half of the share that Dupixent has lost going to novel MOAs. Physician willingness to start patients on a novel agent outside of Dupixent reaffirms for us the market research we've conducted for rezpeg, indicating an opportunity for rezpeg in first-line as well as second-line treatments. With the recent setbacks in the OX40 class, we believe there are no agents in mid- to late-stage development that address the underlying heterogeneity of disease in atopic dermatitis in the way that rezpeg addresses it by targeting the full range of inflammatory pathways. This gives rezpeg the ability to address the underlying heterogeneity of disease in atopic dermatitis, a truly unique competitive position. In our research, approximately 90% of surveyed dermatologists indicated that they would consider starting a patient on rezpeg before starting a patient on another biologic or a JAK inhibitor. This underscores the dermatologist community's receptiveness to try novel MOAs as a first-line treatment. With regulatory agency alignment, we're advancing our Phase 3 program to support a broad label, including first-line use in patients new to biologics and JAK inhibitors, as well as second-line use in previously treated patients. In alopecia areata, rezpeg has a unique opportunity to offer a compelling first-line therapy as compared to the existing approved JAK inhibitor class. Oral JAK inhibitors require daily dosing and carry boxed safety warnings and laboratory monitoring requirements. The alopecia areata market, according to Decision Resources Group, is forecasted to reach approximately $5.2 billion by 2033. And Mary will talk more about our Phase 3 programs in atopic dermatitis and alopecia areata in a few moments. And at the recent EADV conference, we presented multiple oral presentations for rezpeg, which Mary will also review in a bit. Beyond our two lead dermatology indications, we believe rezpeg continues to offer broad potential in other autoimmune indications. A Phase 2 study in new-onset type 1 diabetes, sponsored and funded by TrialNet, is ongoing. We currently estimate that we could have data from the first cohort of patients in late 2027. And as I said last quarter, we're planning to initiate a new signal-seeking trial for rezpeg in another immune indication, and Mary will talk more about our specific plans and that opportunity. And with that, I'll turn the call over to Mary.

Thank you, Howard, and good afternoon, everyone. As stated earlier, we had a significant presence at the EADV conference with three separate oral sessions for rezpeg. We had two presentations for RESOLVE AD. One was a very important translational biomarker sub-study conducted at Mount Sinai, and the other presented 52-week monthly and quarterly maintenance dosing data. For alopecia areata, we presented off-treatment data demonstrating strong retention of hair regrowth and additional hair regrowth for patients who received 52 weeks of rezpeg treatment and were followed for 6 months off treatment. On the heels of this strong EADV presence for rezpeg, we are enrolling patients into our Phase 3 Zenith AD program. Our global Phase 3 Zenith AD program includes three pivotal studies with 510 patients 12 years or older in each study. All three of these studies have been initiated. The first Zenith AD-1 study is evaluating rezpeg monotherapy in patients who are oral JAK inhibitor and biologic naive. For Zenith AD-2, we've recently made a change to adapt this study to evaluate rezpeg in combination with topical corticosteroids and enroll both naive and experienced patients. This change incorporates recent input from regulatory authorities and is intended to support a label for rezpeg that extends beyond monotherapy to combination use with topical corticosteroids. Zenith AD-3 is enrolling patients who are JAK inhibitor and biologic experienced. With these three studies enrolling a total of approximately 1,500 patients, we now have a registrational program designed to support the broadest possible label for rezpeg at commercial launch, spanning adults and adolescents, biologic and JAK inhibitor naive and experienced patients, and monotherapy treatment as well as combination use with topical corticosteroids. The program positions rezpeg for usage across the full spectrum of patients with moderate-to-severe atopic dermatitis. As Howard stated, we still expect our initial top-line data in the summer of 2028 from the Zenith AD studies with a goal of filing a BLA by the end of 2029. All three Zenith AD studies include a 24-week induction period with patients receiving rezpeg at 24 micrograms per kilogram every 2 weeks or placebo. Our primary registrational endpoint is an Investigator's Global Assessment, or IGA, at week 24. EASI-75 is a key secondary registrational endpoint and will also serve as a co-primary endpoint with IGA in significant territories outside the United States. Other important endpoints which are multiplicity protected in the trials include itch and patient-reported outcomes, as well as control of comorbid asthma, which affects approximately 25% of patients with moderate-to-severe AD. After 24 weeks, patients who achieve an EASI-75 or IGA 0 or 1 response will enter a 28-week maintenance period, evaluating less frequent monthly and quarterly dosing. During induction in the Phase 2b RESOLVE-AD trial, rezpeg demonstrated a rapid onset of activity with early improvements in skin clearance and itch and strong efficacy across key clinical endpoints. The longer-term results that were presented again at EADV provided further evidence of rezpeg's potential to deliver durable and deepening disease control. Importantly, both monthly and quarterly maintenance dosing demonstrated sustained responses across key measures of disease activity, including EASI responses, clear or almost clear skin as measured by IGA, and clinically meaningful itch relief in patients who had not achieved these thresholds during induction, with more patients reaching complete skin clearance over time. As Howard mentioned, we will report the 52-week off-treatment follow-up data from RESOLVE AD in the first quarter of 2027. As a reminder, we ran an induction treatment and a maintenance treatment in RESOLVE AD. You'll recall that patients who completed the maintenance treatment on RESOLVE had high durability of responses and continuing deepening of responses for endpoints like EASI-75, EASI-90, and EASI-100. Patients who completed the maintenance treatment of 52 weeks entered an off-treatment follow-up period where we continued to evaluate the maintenance of their responses. For these patients who completed 52 weeks on treatment and entered the off-treatment evaluation period, we assessed their maintenance of disease clearance, including EASI and other metrics of disease that are patient-reported, such as itch and quality of life. After completion of the 52-week on-treatment maintenance portion of the trial, the follow-up off-treatment assessments were done at weeks 4, 13, 26, 39, and 52. A total of 125 patients in RESOLVE AD completed the maintenance treatment period. Of those, 110 patients were in the rezpeg maintenance treatment arm and 15 were in placebo. The placebo patients were included in the off-treatment period to continue to maintain the blind for patients in the study. Of note, there was no option for additional treatment or enrollment into a long-term extension study following the 52-week off-treatment period. This differs from all the placebo withdrawal studies for the currently approved agents. In RESOLVE AD, patients received no injections during the off-treatment period, unlike placebo withdrawal designs that continue a sham injection. To our knowledge, only one other trial has included an off-treatment follow-up that was not a placebo withdrawal design, the Phase 2 ROCA OX40 study. Their on-treatment period was only 36 weeks and their follow-up off-treatment period was only 20 weeks without sham placebo injections. So, what sort of bar are we looking for here? As we've done when we reported our maintenance data, we like to look at Dupixent as a good benchmark. When you look at Dupixent, they completed a 9-month follow-up off-treatment analysis looking at maintenance of the EASI-75 response. Now, this study was a placebo withdrawal design, but they reported that approximately 50% of the patients maintained their EASI-75 at 9 months off treatment. If we see this level of maintenance of EASI-75 at 12 months off treatment or better, that would be an interesting finding. Why? Because it opens up the possibility to move EASI-75 responders to quarterly dosing after 52 weeks of induction and maintenance treatment. Additionally, as further differentiation, such results could create the potential for patients achieving a deep and sustained response across multiple disease measures to transition to dosing as infrequently as every 6 months following 52 weeks of induction and maintenance therapy. Now turning to alopecia areata. We recently presented new off-treatment results for the first time at EADV that provide further evidence of rezpeg's mechanistic potential to deliver durable and deepening responses. In April, we presented data that showed treatment with rezpeg through week 52 resulted in higher SALT 20 responses. At EADV, we showed that these patients sustained their responses for months after their treatment ended. This is especially important in alopecia areata, where loss of hair regrowth following discontinuation of a JAK inhibitor is a major concern for both patients and physicians alike. This durability of response supports evaluating less frequent maintenance dosing after 1 year of twice-monthly rezpeg treatment for patients who achieve SALT 20 or better. For example, 7% of patients who were treated for 52 weeks achieved a SALT 10 at the end of treatment, and 6 months later off rezpeg, 19% of patients had achieved a SALT 10. These data demonstrate real promise for patients. Importantly, we have now shown multiple times that treatment with rezpeg demonstrated durable responses across atopic dermatitis and alopecia areata. Together, this reinforces rezpeg's potential to deliver sustained disease control with infrequent dosing, a potentially important differentiator in the treatment of chronic inflammatory diseases. Our Phase 3 Zenith AA study will start next month. This single global registrational study will enroll approximately 850 patients, ages 12 and up, with severe-to-very-severe alopecia areata. Patients will receive rezpeg at 24 micrograms per kilogram every 2 weeks or placebo through week 52. The primary endpoint will be SALT 20 or less at week 52. The study will include both patients who are naive to systemic treatments and patients who have previously received a systemic agent after an appropriate washout. It will also enroll patients with a current alopecia areata episode of up to 8 years. Following 52 weeks of treatment, patients will enter a long-term extension. Those patients who achieve a good response during the 52 weeks of treatment will receive monthly or quarterly maintenance dosing. We currently expect data from Zenith AA in 2029. With Zenith AA, the overall Zenith program will enroll approximately 2,400 patients 12 years and older across the atopic dermatitis and alopecia areata studies, enabling a substantial safety database to support registration approval. Separately, we are also planning an investigator-sponsored study that will be conducted at Mount Sinai in patients with alopecia areata, which will include moderate alopecia areata patients as well as severe and very severe patients. The population of moderate patients is a large opportunity, and we believe generating data in this patient population is critical as we think of the overall positioning of rezpeg across the entire alopecia areata patient population. This investigator-sponsored trial will start in the first half of next year. As Howard mentioned, we are also planning to explore new indications with rezpeg. The first study we are planning is a proof-of-concept study in about 30 patients with vitiligo. Vitiligo represents a compelling potential expansion opportunity for rezpeg with a significant unmet need, a large under-penetrated market, and strong mechanistic rationale for T-reg-based therapy. Today, there are approximately 1.9 million Americans with vitiligo, yet only 15% seek treatment. Similar to the competitive landscape in alopecia areata, the only approved agents or those in late-stage development are JAK inhibitors. All these agents, whether oral or topical, come with significant safety concerns and lab monitoring burden. Moreover, most patients lose near-complete repigmentation within a year of stopping treatment with JAK inhibitors, presenting an unmet need for differentiated treatment options that can lead to durable responses and less frequent dosing. Importantly, vitiligo biology provides a strong rationale for rezpeg. Vitiligo is an autoimmune derm disease in which cytotoxic CD8-positive T cells attack and destroy melanocytes. This phenomenon results in impaired Tregs characterized by loss of IL-10 and TGF-beta-1 regulation, which results in loss of pigmentation. In a minute, J.Z. will talk more about the biomarker sub-study from RESOLVE AD that was presented at EADV. Critical to vitiligo, that study showed that treatment with rezpeg led to serum IL-10 and TGF-beta-1 elevations as early as week 2, which were positively correlated with clinical effect at week 16. By restoring both Treg number and function in patients with vitiligo, rezpeg has the potential to generate meaningful clinical responses in this indication. This study, which will start in the next few months, will generate proof-of-concept data in late 2027 or early 2028. Building on this, we continue to explore additional indications where rezpeg's novel Treg approach has clinical application, including asthma, where rezpeg has already demonstrated strong reduction in ACQ-5 scores in patients with atopic dermatitis and comorbid asthma. We look forward to sharing more as these programs develop. With that, I will turn the call over to J.Z. J.Z.?

Thank you, Mary. I'd like to spend a few minutes talking about the biology of rezpeg and specifically the biomarker data we presented at EADV, which provide important new insights into how rezpeg works and help us better understand the clinical responses we've observed. As Howard mentioned, atopic dermatitis is a complex heterogeneous disease involving multiple inflammatory pathways. However, the currently approved biologics target only one inflammatory pathway, specifically the type 2 inflammatory pathway, through IL-13 cytokine blockade. Rezpeg, on the other hand, is designed to selectively expand the immune cells to help restore balance across multiple pathways. And to better characterize this novel Treg mechanism, we worked with investigators at Mount Sinai to conduct a biomarker analysis in 100 patients from the RESOLVE-AD study. The sub-study analyzed gene and protein expression, blood samples, and non-invasive skin tape strips, comparing rezpeg at the doses selected for Phase 3 with placebo. The results showed that as early as week 2, there were significant increases in FOXP3 and IL-2RA, two important markers of regulatory T cell activity. At the same time, we saw changes consistent with normalization across multiple inflammatory pathways involved in atopic dermatitis, including TH1, TH2, and TH17 inflammatory pathways, as well as JAK-STAT signaling. These effects were evident in both the skin and circulation, providing further evidence of the breadth of rezpeg's mechanism. Importantly, we were also able to establish a relationship between these early molecular changes and the subsequent clinical improvements. Changes in several blood biomarkers at week 2, including increases in IL-10 and TGF-beta-1 expression and reductions in the inflammatory marker TARC, were significantly correlated with greater improvement in EASI scores at week 16. These correlations were statistically significant in rezpeg-treated patients and were not observed in the placebo group. The rezpeg-treated patients in this sub-study also achieved a mean 64% reduction in EASI at week 16, consistent with the results in the broader study population. We also observed changes in the molecular signature associated with cardiovascular disease, atherosclerosis, and alopecia areata, strengthening our belief in rezpeg's potential as a pipeline in a product. These findings provide important validation of rezpeg's differentiated mechanism. They show that rezpeg induces early regulatory T-cell-associated activity and influences a broad range of inflammatory pathways with molecular changes that are linked to later clinical improvement. Beyond rezpeg, we are continuing preclinical work for our TNFR2 program, which includes NKTR-0166, our bispecific program that combines NKTR-0165, our TNFR2 agonist antibody, with a second validated immune target that we have not yet disclosed. This program extends the same core stratum that underpins rezpeg, developing therapies that restore immune regulation rather than simply suppressing a single inflammatory signal. And with that, I will turn the call over to Linda to review our financial results. Linda?

Thank you, J.Z., and good afternoon, everyone. On today's call, I'll review our quarterly financials for the third quarter of 2026 and updates to our 2026 financial guidance. We ended the third quarter of 2026 with approximately $953 million in cash and investments with no debt on our balance sheet. We now expect to end 2026 with more than $840 million in cash and investments, which is at or above the top end of the range of $815 million to $840 million provided on our Q2 call. Turning to the income statement, our third quarter 2026 non-cash royalty revenue totaled $8.5 million. We now expect non-cash royalty revenue will be approximately $38 million for the year. Our R&D expenses were approximately $44 million for the third quarter of 2026. We expect an increase in the fourth quarter due to rezpeg AD enrollment, AA clinical startup, and supporting CMC activities. We now anticipate full-year R&D expense to range between $185 million and $200 million, which includes approximately $5 million to $10 million of non-cash depreciation and stock-based compensation expense. Our G&A expenses were approximately $25 million for the third quarter. We expect G&A expenses for the full year 2026 to be approximately $65 million, which is within the range given previously. And this includes approximately $5 million of non-cash depreciation and stock-based compensation expense. Non-cash interest expense for the third quarter was approximately $6 million. We now expect non-cash interest expense will be approximately $28 million for the year. Our net loss for the third quarter was approximately $56 million, or $1.63 basic and diluted net loss per share. And, as I stated earlier, we expect to end 2026 with more than $840 million in cash and investments. Our financial position is strong, enabling us to execute our robust and exciting rezpeg Zenith AD and Zenith AA programs. With that, I'll hand it over to the operator for questions. Thank you.

As a reminder, to ask a question, please press star 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 again. In the interest of time, we do ask that you please limit yourself to one question at this time. Please stand by while we compile our Q&A roster. And our first question will come from Yasmeen Rahimi from Piper Sandler. Your line is open.

Good afternoon, team. Congrats on all of the updates. I'm really excited to hear about your interest in vitiligo and moving forward, but would love to get a little bit more color on what work is needed to complete in order to kick off the studies in the upcoming months. Would you envision a placebo-controlled study, an open-label study? And also maybe give us some insight on how do you think about dose selection in vitiligo? Sorry, this was like more than one question. My apologies.

Hi, that's a really good question. I will defer to Mary on going through some of the detail on that. I would say that it's an interesting indication because as J.Z. did say, it's very much T-cell mediated, it's a T-cell mediated disease, so I think it's really a perfect opportunity for us to show the potential for rezpeg in broad applications in autoimmune disease. So, Mary, maybe you could answer some of the questions about study design.

Yes. Hi, Yasmeen. So this is a proof-of-concept study. You know, we want to establish whether the strong biologic and mechanistic rationale we see for rezpeg in vitiligo that we've seen in our immune derm diseases translates into vitiligo. And as you know, probably, there are companies that have done an open-label single-arm study and then moved into a Phase 3 program. And so, we do feel that there's a lot of potential in that. We feel that there's an opportunity to do this because, like alopecia areata, there is a very low placebo effect on these endpoints like facial VASI 75 or even mean percent change from baseline and facial VASI. So we do believe that there is an opportunity to very efficiently conduct a trial in an open-label population. We are still working on the final design concept, just had a call this morning with Dr. David Rosemarin, who we're working very closely with on this study design, and we will be able to launch this study next year. So stay tuned as Howard and J.Z. and I have said, you know, there's such strong mechanistic rationale going into this indication. And also given that this is primarily a TH1-dominated disease, and we saw, you know, the good data in alopecia areata, we believe that there's great read-through into vitiligo from, you know, what we've already collected in these inflammatory skin diseases. And, you know, as we mentioned, this is really an under-penetrated market with only 15% of patients getting treated. So we're very excited to quickly move forward into this new indication. So thank you.

Thank you. And our next question will come from Julian Harrison from US Bancorp, BTIG. Your line is open.

Hi, thanks for taking the questions. As we look ahead to the RESOLVE AD off-treatment data next quarter, can you walk us through the rationale for why Q2 weeks instead of 36 weeks on treatment may set rezpeg up for better odds of sustained responses off treatment? And then are there any important differences in statistics versus the Phase 1b atopic dermatitis trial, we should keep in mind? Can you also talk to us about how you'd be handling rescue therapy and missing data there?

Yep. Hi. Hi. So, we're really excited to, you know, look at these data. You know, we've given you some guidance, you know, that we had about 125 patients that had the dosing. I do believe that, you know, what we've learned from our maintenance period in the Phase 2b was we saw, you know, very robust maintenance of EASI-75. And as you'll remember, we followed patients who, you know, just received Q12W dosing or once a quarter. And those patients who came off of 16 weeks of Q2W doses of 24 micrograms per kilogram, half of them went on to receive just three doses of rezpeg. And what we saw is, you know, 83% of those patients were able to maintain their EASI-75. So I think we have nice data from the Phase 2b as you were mentioning that show this durability with just three doses of rezpeg, and we did even see patients having deepening of responses. That, coupled with the data that we saw from alopecia areata, where we dosed patients for 52 weeks and then stopped treatment and followed those patients who had SALT 20 for an additional 6 months, we did also see really good durability with those patients. And so I would say the maintenance portion and the data that came out of the Phase 2b, coupled with what we saw from the Phase 2b and alopecia areata, both strongly support that we will be able to see patients having durability of treatment with 52 weeks off of a rezpeg dose. And the next part of the study, you know, we're going to be able to look at, well, what happened to patients, you know, for 13, 26, 39, and 52 weeks off treatment? We believe that this will help guide us, you know, in particular after 52 weeks, what type of dosing do these patients, you know, need in a long-term extension? You know, is a quarterly dosing optimal, or for those patients who have very deep responses, could they even go on to, you know, a Q6M dosing regimen? So we look forward to sharing those data with you in the first quarter of next year.

Thank you. And our next question will come from Jay Olsen from Oppenheimer. Your line is open.

Oh, hey, congrats on all the progress across so many different clinical development programs, and thanks for taking the question. Since your work at EADV linked early increases in IL-10 and TGF-beta-1 changes to subsequent clinical improvement, are you also looking at whether those same early biological changes might predict sustained responses after treatment withdrawal? And if so, would those findings strengthen the case that rezpeg is potentially disease modifying by restoring immune regulation rather than reducing temporary suppression of inflammation? And then if I could, as a follow-up, can you just talk about any update on your type 1 diabetes program and when we should expect to see clinical data? Thank you.

I'm happy to take the first question. And so that is indeed, as you like telegraphed it, you know, a suite of activities that we're doing. Because in this study, the cohort's large enough, right, that we have the ability to parse the patients and look for different features of the responses. And we are indeed looking at both the skin as well as the serum for any hallmarks associated with those kind of stratifications of the responses. We're doing that first in the 16-week induction data, and we presented, you know, just a portion of the data. There's much more data than we have, and was presented by Meredith in that EADV presentation. But importantly, we also collected tape strips through 52 weeks in that study, as well as serum samples. And this is indeed, you宁 know, a significant area of our translational focus, because we do believe that we're able to see features of the kind of normalization, as well as the immune changes that could be consistent with really the rebalancing mechanism of rezpeg. So this is going to be definitely the subject of additional work that we're doing. And Mary, maybe I'll turn the type 1 diabetes question over to you.

Yep. Thanks, J.Z. Yes, and thanks, Jay. Yes, so I know TrialNet has probably about two-thirds of their clinical sites that they plan to enroll to up and running, and the first cohort will be 18 patients, 12 on rezpeg and 6 on placebo. And so they're anticipating having the data from that first cohort, the 6-month data, either at the end of 2027 or the beginning of 2028. So we're really excited and looking forward to seeing those data as well. Thank you. Great, thank you. Congrats again. Thank you.

And our next question will come from Cha Cha Yang from Jefferies. Your line is open.

Hi, team. This is Cha-Cha on for Roger. Thank you again for this very informative call and thank you for taking my question. I also have a question on the vitiligo selection program. If you could tell us more about how you are choosing patients and which patients you're choosing to prioritize, whether that's active disease patients or patients with stable disease where the goal might be primarily repigmentation. And then in relation to that, if you could tell us about the percentage of patients for each and the commercial opportunity for targeting certain subgroups of patients that you're going after. Thanks.

Yes, hi Cha-Cha. So we are going to enroll patients with active disease, and these are patients with non-segmental vitiligo. And we were just mentioning that this is a fairly large market, very similar. We're looking at this market very similar to alopecia areata. We are working with our advisors, like I said, just actually speaking to David Rosemarin this morning about some of the specifics of the study design. And as we get our trial up and running, we will let you know in more details about the total patient population and, you know, the exact design of the study and our anticipated date for having data. So thank you.

Thank you. And our next question will come from Tara Bancroft from TD Cowan. Your line is open.

Hi, good afternoon. I was hoping maybe you could give us an update on how you're seeing enrollment progressing in the biologic-naive versus experienced Phase 3 studies. I'm trying to see if you're seeing any particular headwinds or tailwinds in either, and if you're expecting that the trials are going to complete enrollment in a similar timeframe, just as we're thinking ahead about the cadence of data. Thank you.

Yes, thank you for asking the question. So, you know, we are, you know, just getting started. And I would say, you know, right now, not a huge difference between enrollment between the naive and the experienced patients and all of our enrollment projections for all three of the AD trials, we believe, you know, are all going to coalesce and finalize and have our top-line data by the summer of 2028. So that means, you know, all the patients will be enrolled to these trials around January of 2028.

Thank you. And our next question will come from Samantha Semenko from Citi. Your line is open.

Hi, good afternoon. Thanks very much for taking the question. Just on the Zenith AD-2 study, can you talk a little bit about the regulatory feedback that you received that led to the change in the protocol? What drives this feedback from regulators? And can you say which regulatory agency initiated the feedback? Thank you.