Nektar Therapeutics' CEO Discusses Q2 2012 Results - Earnings Transcript

| About: Nektar Therapeutics (NKTR)

Nektar Therapeutics (NASDAQ:NKTR)

Q2 2012 Earnings Call

August 09, 2012 17:00 p.m. E.T


Howard Robin – Chief Executive Officer

John Nicholson – Chief Financial Officer

Robert Medve – Chief Medical Officer

Jennifer Ruddock – Investor Relations


Jonathan Aschoff – Brean Murray, Carret

Bob Hazlett – ROTH Capital

Rashie Jain – JP Morgan

Biren Amin – Jefferies


Good day, ladies and gentlemen, and welcome to the Nektar Therapeutics Second Quarter 2012 Financial Results Conference Call. My name is Erin, and I’ll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session toward the end of today’s conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now turn the presentation over to your host for today’s call, Ms. Jennifer Ruddock. Please proceed, ma’am.

Jennifer Ruddock

Thank you, Erin. Good afternoon and thank you for joining us everyone. With us today are Howard Robin, our President and CEO, John Nicholson, our Chief Financial Officer, Dr. Robert Medve, our Chief Medical Officer and Dr. Steve Doberstein, our Chief Scientific Officer.

On this call, we expect to make forward looking statements regarding our business including but not limited to clinical development plans, the timing of future clinical results and regulatory filings, the economic potential of our collaboration partnerships including potential milestone payments, the therapeutic and market potential of our drug candidates and those of our partners, our financial guidance for 2012, and certain other statements regarding the future of our business.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes that are difficult to predict and many of which are outside of our control. You should refer to important risks and uncertainties that are detailed in our Annual Report on Form 10-Q and Form 8-K filed today, which are available at We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise. A webcast of the conference call will be available for replay on the Investor Relations page at Nektar’s website at

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

Howard Robin

Thank you Jennifer, and thanks to everyone for joining us this afternoon. Nektar continues to make significant progress this year advancing our clinical and preclinical programs and greatly strengthening our financial position. I would like to give you a business update and then hand the call over to John for a review of financials. Last month, we completed a $125 million private placement of Senior Secured Notes that strengthens our balance sheet without any dilution to our shareholders.

These notes, which have no equity or warrants associated with them, are due in July of 2017 and callable by Nektar beginning in July of 2015. Importantly, the notes have no financial performance targets and we retain the freedom to operate our business as we have in the past, including, for example, our ability to enter into collaborative transactions or monetize royalties.

We are very pleased with this transaction which we believe reflects the strength of

Nektar’s proven technology and our late-stage pipeline. The placement of these secured notes builds on the $124 million sale of nonstrategic royalties that we completed in the first quarter of this year. Funds from these two transactions will be used to repay the remaining balance on our convertible debt, which is due in September of this year. This will eliminate the significant dilution associated with convertible debt for Nektar.

After repayment of the convertible debt, we now expect to end 2012 with approximately $300 million in cash and investments, which should give us multiple years of working capital and bring us through many important potential product milestones. Now I’d like to review the significant progress we’ve made with our clinical pipeline in the past quarter. Let me start with an update on naloxegol, a peripherally-acting mu-opioid receptor antagonist being developed by AstraZeneca as a once-daily oral tablet for the chronic treatment of opioid induced constipation or OIC. In 2011, AstraZeneca initiated a global and comprehensive Phase 3 clinical program for naloxegol. The planned registration package will include two pivotal studies to evaluate the efficacy and safety of naloxegol in patients with chronic non-cancer pain, a 6-month extension study, and a long-term safety study. The two pivotal placebo-controlled studies each include an estimated

650 patients with OIC with a primary endpoint based on a 12-week treatment period.

In addition, one of the pivotal studies has a 6-month double-blind extension. Finally, the 52-week long-term safety study is a randomized, open label study design. This comprehensive Phase 3 program is the only one of its scope and size for the treatment of opioid induced constipation. We are very pleased to report today that AstraZeneca and Nektar anticipate announcing high-level results from the two pivotal studies and the extension study in the fourth quarter of this year. AstraZeneca is also planning a full presentation of the efficacy results at a scientific meeting in 2013. Results from the 1,135 patient long-term open label safety study are anticipated in the first quarter of 2013.

Importantly, AstraZeneca remains on track for mid-2013 global regulatory filings for naloxegol. There are an estimated 100 million chronic pain patients worldwide that are treated with opioids and up to 50% of these long-term pain patients develop constipation. AstraZeneca estimates that there are five key markets that account for over 90% of patients taking opioids for chronic pain – these are the U.S., Canada, France, Germany and the UK. Primary care practitioners and pain management specialists make up the majority of prescribers in these key markets. AstraZeneca, with its global presence, is an ideal development and commercial partner for naloxegol.

Under our agreement with AstraZeneca, Nektar is entitled to receive $95 million upon acceptance of regulatory filings in the US and EU. We will receive an additional $140 million in regulatory and launch milestone payments when naloxegol is approved and launched in the US and EU. Nektar is also entitled to significant escalating double-digit royalties on product sales of naloxegol and up to $375 million in additional sales milestones at certain commercial sales levels. As a reminder, AstraZeneca is responsible for all cost of development and commercialization of naloxegol. We are very excited about the advancement of this program and look forward to the studies completing this year.

I’d now like to update you on the significant progress we’ve made with NKTR-181, our novel mu-opioid agonist molecule, the first opioid analgesic of its kind. As a new molecule, NKTR-181 has been specifically engineered with a number of important properties inherent to the molecule. First, NKTR-181 has been designed to enter the CNS slowly, thereby avoiding the dopamine rush of traditional opioids that is associated with euphoria and can lead to abuse and addiction. This slower rate of entry should also reduce other serious CNS mediated side effects seen with traditional opioids, such as sedation and respiratory depression.

The abuse and diversion of opioids is a serious public health issue and solutions to this problem are desperately needed. In May, we received Fast Track designation from the FDA for the NKTR-181 development program for the treatment of moderate to severe chronic pain. This designation underscores the unique potential that NKTR-181 has to address the urgent medical need for pain therapies with less abuse potential and fewer side effects.

As an NCE, NKTR-181’s potential differentiating properties are inherent to its new molecular structure and are not a result of a physical barrier or formulation. The Phase 2 trial of NKTR-181 for the treatment of chronic pain is now underway. The study utilizes a placebo-controlled design to assess the efficacy, safety and tolerability of NKTR-181 in 200 opioid-naïve patients with moderate to severe chronic pain from osteoarthritis of the knee. This Phase 2 study utilizes an enriched enrollment study design that is a standard design used in the development of opioid compounds.

We will also be conducting a human abuse liability study, which will compare the likeability of NKTR-181 to commonly abused opioids in approximately 20 recreational drug users. We expect to complete the Phase 2 development program for NKTR-181 by the middle of next year.

Our next novel opioid molecule, NKTR-192, has a distinct profile from NKTR-

181 – it is also designed to have reduced abuse liability and fewer CNS mediated side effects but is short-acting and designed for the treatment of acute pain. We have successfully completed our first Phase 1 single ascending dose pharmacokinetic study for NKTR-192, which confirmed that the PK profile of NKTR-192 is well-suited for the treatment of acute pain.

Next month, we will start a second Phase 1 study to evaluate single ascending doses of NKTR-192 on both PK and pharmacodynamic endpoints. This second study should be completed by the end of the year. With NKTR-181 and NKTR-192 in our pipeline, Nektar can address both the chronic and acute pain markets. In the US alone, there are over 148 million opioid prescriptions written annually for patients with chronic pain, and over 100 million prescriptions written annually for acute pain conditions. We are extremely excited about the advancement of these important new pain candidates and we look forward to sharing more on NKTR-181 and NKTR-192 as they move through clinical development.

Now let’s talk about etirinotecan pegol, or NKTR-102, our targeted topoisomerase inhibitor being developed as a single agent in several tumor settings. Recruiting is going very well in Nektar’s ongoing Phase 3 BEACON study of etirinotecan pegol in patients with metastatic breast cancer. BEACON is an open label, randomized head-to-head trial, which will enroll approximately 840 patients comparing single-agent NKTR-102 to an agent of physician’s choice with a primary endpoint of overall survival. To date, we have initiated over 80 clinical sites in the U.S., Canada, and Europe. We are planning approximately 160 sites worldwide.

Enrollment in the BEACON study is expected to be completed in 2013 with data expected in 2014. We believe etirinotecan pegol could provide physicians and patients with an important and much needed new therapeutic weapon in fighting breast cancer. Cross-resistance is a key problem with existing therapies. As the only targeted topo I inhibitor being developed in breast cancer, etirinotecan pegol offers a different mechanism of action from microtubule inhibitors, which are the most commonly used drugs to treat these patients. If the BEACON study is successful, NKTR-102 will have the opportunity to become a worldwide standard of care in advanced breast cancer. In platinum-resistant ovarian cancer, our Phase 2 expansion study is ongoing. We expect that the study will conclude towards the end of 2012. Following its conclusion, we will analyze the final data and meet with the FDA and the EMA to discuss our regulatory options and possible next steps for the development of NKTR-102 in ovarian cancer.

This week, we announced our first investigator-sponsored study with NKTR-102 in patients with avastin-resistant high-grade glioma. The Phase 2 single-arm study is being conducted by Dr. Lawrence Recht at Stanford Cancer Institute and will enroll up to 20 patients with glioma. Dr. Recht is Professor of Neurology and Neuroscience at Stanford and is a world-renowned specialist in cancers of the brain. We are excited about Dr. Recht’s interest in our technology, and NKTR-102’s potential to help a patient population that currently has little to no treatment options.

In addition to the small molecules we just discussed, a key element of Nektar’s success in building our pipeline is our ability to enable protein and peptide therapeutics, such as BAX 855 and OMONTYS. BAX 855 is a PEGylated long-acting form of ADVATE that is partnered globally with Baxter for the treatment of hemophilia A. BAX 855 is currently in a Phase 1/2 clinical study which is expected to complete this year. Baxter is targeting the start of Phase 3 by the end of 2012. We are very excited about this program. Baxter is a world leader in the treatment of hemophilia, and ADVATE, their Factor VIII molecule is approved in 53 countries with sales in excess of $2 billion annually. In preclinical studies, BAX-855 achieved a profile that supports its potential to be dosed less frequently than ADVATE.

Analysts estimate an annual market potential of $3-4 billion for long-acting Factor VIII products. Under our agreement with Baxter, Nektar will receive significant royalties on net sales of BAX 855. We are very pleased to be partnered with Baxter on this important development program for their ADVATE franchise. OMONTYS, marketed by Affymax and Takeda, is another successful example of the application of Nektar’s technology platform. In fact, OMONTYS is the 8th product approved that was enabled by Nektar polymer conjugate technology. Affymax and Takeda launched Omontys in April and they recently announced two supply agreements – one with Fresenius, one of the world's leading dialysis providers and another with U.S. Renal Care, representing one of the top 10 providers in the U.S.. Analyst estimates for OMONTYS range as high as $700 million in the US dialysis market alone. Our agreement with Affymax includes mid-single digit royalties on global sales of OMONTYS, as well as manufacturing revenues.

Now moving on to another important partnered program, Amikacin Inhale, which is being developed to treat gram negative pneumonias in patients on ventilators in the ICU. Devices for the Phase 3 study of Amikacin Inhale have been manufactured and are undergoing final stability studies. Bayer has selected its CRO and has started Phase 3 activities. They expect to initiate dosing in early 2013. The Phase 3 program for Amikacin inhale will be conducted under an SPA, which will enroll approximately 1,200 patients with a primary endpoint of clinical test of cure. Amikacin inhale represents considerable potential economic value for Nektar. Gram negative bacteria make up 70% of all ICU pneumonias and are associated with very high rates of morbidity and mortality.

Current IV standard of care therapies are limited by their inability to reach effective concentrations in infected lungs. By targeting the lungs directly with antibiotic, Amikacin Inhale could emerge as a very important treatment for these deadly pneumonias. Upon commercialization, Nektar will receive a flat 30% royalty in the US and an average ex-US royalty of approximately 20% on all product sales.

Finally, before I hand the call to John, let me remind you that in addition to our clinical programs, we have several preclinical candidates in late-stage research, including NKTR-171 for neuropathic pain and NKTR-214 for cancer immunotherapy. We plan to announce our next IND candidate by the end of this year.

Nektar is in an enviable position scientifically, clinically, and financially. We have built an incredibly diverse pipeline over the last five years. We have two programs in Phase 3 – naloxegol and NKTR-102, two programs preparing for Phase 3 – BAX 855 and amikacin inhale, and two pain programs – NKTR-181 and NKTR-192 in Phase 2 and Phase 1, respectively.

These programs capitalize on different aspects of our technology platform across multiple therapeutic areas, spreading development risk and clearly demonstrating the breadth and depth of opportunities available to us with both small and large molecules. Further, our scientific strategy, to address proven human disease targets with well-understood mechanisms of action, should increase probability of success while still allowing us to address significant unmet needs.

There are very few technologies in the pharmaceutical industry that are capable of generating such a diverse, innovative, and valuable pipeline. I am exceptionally proud of the team at Nektar and I am exceptionally proud of the company we are building.

With that, I will now turn the call over to John.

John Nicholson

Thank you, Howard, and good afternoon, everyone. At the end of the second quarter, cash and investments were $477.1 million. Following the end of Q2, in July, we completed the placement of $125 million of senior secured notes. This transaction, along with the $124 million monetization of non-strategic royalties completed in Q1, will be used towards the repayment of the remaining convertible debt in September of this year.

We expect to end 2012 with approximately $300 million in cash and investments.

Our financial guidance for 2012 remains unchanged. We expect our cash used in operations, including capital expenditures, to be between $130 million and $140 million.

Revenue for 2012 is expected to be between $75 million and $85 million.

Our R&D expense guidance is still between $152 million and $157 million, with approximately $19 million of this as non-cash expenses, such as stock-based compensation and depreciation. 2012 G&A is still anticipated to be between $44 million and $46 million. Included in our 2012 G&A expense are $11 million of non-cash items, such as amortized free rent on our San Francisco facility, stock-based compensation expense, and depreciation.

Total revenue in Q2 2012 was $23.7 million versus $17.3 million in the second quarter of 2011. Total revenue was $41.6 million in the first half of 2012 compared to $28.6 million in the first half of 2011. Revenue increased as a result of higher product sales, royalties, and collaboration revenue.

Total operating costs and expenses in the second quarter of 2012 were $50.7 million versus $51.6 million in the same quarter a year ago. For the first half of 2012, total operating costs and expenses were $106.6 million as compared to $96.8 million for the same period in 2011.

Total operating costs and expenses increased primarily because of increased cost of goods related to higher product sales as well as higher development expenses. R&D expenses in the second quarter of 2012 were $33.2 million as compared to $32.3 million in the second quarter of 2011. In Q2 2012, research and development expenses included $4 million of non-cash expense, primarily stock-based compensation and depreciation. R&D expenses for the first half of 2012 were $68.3 million as compared to $62.4 million in the first half of 2011.

R&D expenses in the first half of 2012 included the ongoing costs of the NKTR-102 BEACON Phase 3 study, the production of devices for the Phase 3 study of Amikacin Inhale, the Phase 1 study for NKTR-181, preparations for the Phase 2 study for NKTR-181, and the Phase 1 study for NKTR-192.

For the second quarter of 2012, G&A expense was $10.3 million compared to $11.2 million in the same period of 2011. In Q2 2012, G&A expense included $2.3 million of non-cash expense, primarily stock based compensation, depreciation, and amortized free rent. G&A expense was $20.7 million for the first half of 2012 compared to $22.9 million for the first half of 2011.

Interest expense for the first half of 2012 was $12.3 million and included $7.3 million of non-cash interest expense related to the monetization of the non-strategic UCB Cimzia and Roche Mircera royalties. We expect interest expense for the rest of 2012 to be approximately $11.0 million in the third quarter and $10.0 million in the fourth quarter, which includes $5.5 million of non-cash interest expense in the third and fourth quarter related to the royalty monetization.

Let me remind you again that we plan to end the year with approximately $300 million in cash and investments. With that, I will now open the call to questions. Operator?

Question-and-Answer Session

Operator (Operator Instructions). Your first question comes from the line of Jonathan Aschoff from Brean, Murray. Please proceed.

Jonathan Aschoff - Brean Murray, Carret

Hi, guys. Can you hear me?

Howard Robin

Yes. just for everybody on the call, we've just been informed by the conference call provider that there was some technical difficulty during the call, and we did notice some technical difficulty during the call. If you notice at one point I had to stop because we were having some difficulty with the conference call procedures. So right now we're trying a different system and we can hear you, so please if you've been listening on the call, everybody on the call feel free to ask as many questions as you'd like and we'll try to clarify for you. So go ahead, Jonathan. I can hear you now, yes.

Jonathan Aschoff - Brean Murray, Carret

Okay, thanks, so regarding abuse-resistant competitors, have abusers found ways to better abuse that later version of OxyContin that was approved in 2010? And is the potential Pfizer competitor, you know, as an immediate release only, is that just unabusable in that a non-oral route of administration is difficult?

Howard Robin

If you can hear me, I'm going to let Rob answer that question, Rob?

Robert Medve

Jonathan, it's Rob. Thanks for the question. And two parts for the answer, one around the reformulated OxyContin. All of these things generally fall into the same categories. There's certain physical barriers to accessing the active pharmaceutical ingredient, or the API. The API itself, the issue is that these are essentially immediately in the brain once they're in the blood, and that's why people try to manipulate these formulas so they can get them in faster. So the answer is yes, people have apparently found ways to get around the Pfizer product formulation and that product is an immediate-release oxycodone in its formulation similarly to lend itself to manipulation. One would know that the compound is the active API and people would figure out a way of injecting the free compound so it could be relatively quick as an immediate release.

Jonathan Aschoff - Brean Murray, Carret

Okay, and could you guys please highlight some key primary, secondary endpoints that may have been strongly encouraged by FDA for NKTR-118?

Howard Robin

Yes, look, I'll let Rob comment on that specifically, but I think, as I mentioned, I hope you heard this during the call, that we put together what we believe is the most comprehensive program, and a depth and breadth that has been done for drugs such as this one to treat opioid-induced constipation, and we believe that we have the most extensive program available. And I'd like to let Rob comment on your question regarding key endpoints.

Robert Medve

I mean, these are two very different development programs relistor and naloxegol. The breadth and depth of the phase 3 program for naloxegol far exceeds what had been done in support of Relistor. The naloxegol program is robust, it's proactive, and it incorporates feedback from the FDA and the EMA on appropriate endpoints. Now, there are many more differences than there are similarities between the programs, but the key differences are really around the endpoints and the dosing. Importantly, naloxegol incorporates 12 weeks of daily dosing as an endpoint in development trials, where the relistor program was four weeks followed by PRN dosing. So there's marked differences in the primary endpoints, the time to event endpoints where naloxegol is the full 12-week responder analysis. And it's really important to note that the 12-week responder analysis was specifically recommended by the FDA as being necessary to support a chronic once-daily indication. Another important difference is around the nature of the safety data being collected, and the naloxegol program has a randomized and controlled safety database with 1135 patient exposure. But as I mentioned, they're very, very different programs, and AstraZeneca put together a very robust program that really seeks to proactively address potential issues. So we're very pleased.

Jonathan Aschoff - Brean Murray, Carret

How about specific ways of monitoring opioid withdrawal?

Robert Medve

Yes, there are very specific ways to measure that. We incorporate -- there are instruments that specifically designed to capture potential opioid withdrawal symptoms, both subjective symptoms of withdrawal and objective symptoms of withdrawal. So when I mentioned the program being robust and proactive, I'm referencing that we're proactively looking for things that one would presume to be potential issues, and that includes issues around withdrawal.

Howard Robin

Jonathan, this is Howard. I think, look, it's very difficult to understand what the current status of Relistor is. There's not a lot of information forthcoming specifically on what the FDA's concerns are. But I would say this, I wouldn't look at the naloxegol clinical development program and the Relistor clinical development program in the same way at all. Very, very different programs, very different endpoints, and we took a lot of advice from the FDA. So I'll leave it at that.

Jonathan Aschoff - Brean Murray, Carret

Okay, and then, lastly, just a simple yes or no, I guess. Is Astra seeking any other slower-acting versions of 118 that, you know, predominantly seek to foster a daily rather than any kind of PRN use?

Robert Medve

Well, the NKTR-118 is being developed as daily chronic therapy and not PRN, so I am not sure I followed your question.

Jonathan Aschoff - Brean Murray, Carret

Okay, but nothing that works even slower than that is in your plan? Is that true? Like a slower onset?

Robert Medve

No, I mean, we're developing naloxegol as a once-daily oral formulation, and I can't speak for AstraZeneca's plans for potential -- follow along the line extension products?

Jonathan Aschoff - Brean Murray, Carret

Okay, thanks a lot.


And your next question comes from the line of Bob Hazlett from ROTH Capital. Please proceed.

Bert Hazlett - ROTH Capital

Thanks. I, too, am having serious difficulties hearing you folks. So if I ask something that's been touched on, my apologies. Really two separate things. Just one more on the 118 program. I believe Rob, you mentioned the differences between Relistor and the 118 program. Really the time-to-event analysis versus your 12-week responder analysis, I think I got that. We talked about the opioid withdrawals. What other differences can you specifically point out between the two -- the programs that would influence FDA? And again, my apologies if I've asked this again, but again the breakup in the phone line is very difficult to manage.

Robert Medve

No, we apologize for the technical difficulties. The programs are very, very different in scope, as you might imagine. The program for naloxegol is built in support of a full NDA filing; it's not an sNDA fate[ph] filing obviously. So there's a lot more data being generated around that, following pain data, opioid use, all sorts of (inaudible). The secondary endpoints are actually listed on for the pivotal and the safety trial, so you can certainly find a comprehensive listing of them there. But we believe this program is very proactive in addressing what one would think of as the typical pieces of information you'd really want to know around are opioid-use patterns changing during the trial or are pain scores changing during the trial? What are the safety data? it's very important to have a controlled safety database so you're not just having everybody on drug and not knowing how to interpret anything that you might observe. So as I mentioned, there's many more differences than there are similarities between the programs, and strategically the naloxegol program is designed to be a sole global regulatory filing and not just a trial in support of an sNDA.

Bert Hazlett - ROTH Capital

Thank you. That's helpful, and the reception seems to be a bit clearer now. So thank you for that as well. Just two more quick ones. In terms of the Bayer program and the single-use device, have you set down specifically that you have enough product or enough devices, single-use devices, to initiate Phase III? And when should we expect milestones from that program? I think there are some still upcoming, if I'm not mistaken, in terms of developments?

Howard Robin

Yes. Well, we do have enough devices manufactured. They are in final stability testing, and as I said, you may not have heard it during the call, Bayer has now hired a CRO and is planning and starting up Phase III activities in terms of site recruitment, et cetera. So we do have sufficient quantities. I think there is a $10 million milestone on the start of Phase III, and we do expect that to start early in 2013. But the important answer is yes, we do have the devices manufactured. They are on final stability testing and Bayer has hired a CRO and is starting up Phase III activities.

Bert Hazlett - ROTH Capital

Thanks, and again that's clear. And just one more quick one. In terms of the potential next in the clinic, I'm seeing a lot of focus on NKTR-171 in terms of the additional pain programs. Is that a likely candidate for the next in the clinic and peripherally-restricted sodium channel blocker?

Howard Robin

Well, look, I said that NKTR-171 for peripheral pain, as you properly describe, and NKTR-214, which is a cancer immunotherapy, are the two next programs that are vying for the next IND filing, which we said we would have by the end of the year. And I can't comment on which one of those two it will be, but clearly NKTR-171 is very, very important, and I would expect that we put a lot of emphasis on it.

Bert Hazlett - ROTH Capital

Thanks for your time. I appreciate it.

Howard Robin

Thank you.


And your next question comes from the line of Rashie Jain from JPMorgan. Please proceed.

Rashid Jain - JPMorgan

Hi, guys. This is Rashid on behalf of Cory Kasimov from JPMorgan. Thanks for taking my questions. I have two. First, how much detail will be topline for the Phase 3 results for naloxegol? If you could provide us more granularity in terms of what endpoints and et cetera that we can expect. And second, with respect to filings for 102 expansion in ovarian cancer, are you reporting similar regulatory options in US and EU? Thanks a lot.

Howard Robin

Okay, let me do the first question. I'll have Rob answer in more detail. But as we've said, and I hope you heard this during the call, that Nektar and AstraZeneca plan to provide topline results from the NKTR-118 Phase III pivotal program in the fourth quarter of this year. So I'll let Rob comment on what that topline result could look like in terms of data.

Robert Medve

Yes, and I didn't completely hear your question, so I hope I'm answering the right question. But when we say talk about high-level data, generally we're talking about topline around primary and key secondary endpoints. There will be two pivotal trials, as noted, and also the six-month extension, which is primarily a safety trial. So we'll have safety and efficacy data is what we're expecting.

Rashid Jain - JPMorgan

Okay, great.

Howard Robin

And could you -- we had a little difficulty hearing you as well. What was the answer to your second question? What was your second question?

Rashid Jain - JPMorgan

Yes, so respective filings for 102 in ovarian cancer? So are you proposing similar regulatory options in the US and EU both?

Howard Robin

Yes, we are absolutely looking at what -- where we can go with NKTR-102 in ovarian cancer in the EU as well, and we think there are a number of good options.

Rashid Jain - JPMorgan

Okay, thanks.


(Operator Instructions) Your next question comes from the line of Biren Amin from Jefferies. Please proceed.

Biren Amin - Jefferies

Yes, hi, guys. Thanks for taking my question. I have one question on naloxegol. Given the dropout would be considered nonresponders in the primary efficacy responders analysis, what measures, if any, are being utilized to minimize dropouts in both Phase III trials? And are your assumptions for dropouts in the Phase III program similar to the discontinuation rates that have been observed in the Phase II trial? Thanks.

Robert Medve

Well, much of that I can't speak to. Those are AstraZeneca questions. We do, in these trials, typically handle dropouts the way we do in clinical trials. So people can drop out for lack of efficacy. They can also drop out for adverse events, both are relevant to interest -- relative to interesting endpoints, of course. The way we deal with those is in line with what's typically done in a statistical analysis plan. So I'm not sure I'm directly answering your question. There is not a specific measure to try to encourage patients to continue dosing. That could potentially muddy your results if you try to do something like that. Am I getting to your question, Biren?

Biren Amin - Jefferies

Yes, that's fine. That's a fair answer. Thanks.


And I would now like to turn the call over to Howard Robin for closing remarks.

Howard Robin

Well, thank you. I’m glad you were able to bear with us today. And I am sorry about this technological problem. We’re going to make sure that the webcast replay has a full audio check and that it's crystal clear and the transcript is accurate. So please go to our website if you want to listen to this again. We’ll make sure it’s crystal clear for you. And feel free if there are any other questions, do contact Jennifer Ruddock, we’ll make sure that we set up the appropriate meetings.

And again I apologize for the bad audio. But I’m very, very happy with the progress the company is making and I think we’re in excellent position both scientifically, clinically and financially. And it’s turning out to be so far very, very good year for Nektar. So thanks for sticking with us. I appreciate it. We will see you all at the UBS Conference in New York. Thanks a lot. Bye-bye.


Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: Thank you!