Among the companies in our universe, several upcoming data releases are expected in June. Nektar Therapeutics (Nasdaq: NKTR) will report Phase 2b data for REZPEG in atopic dermatitis (AD). Ventyx Biosciences (Nasdaq: VTYX) is anticipated to present Phase 2a data for VTX3232 in Parkinson’s disease (PD). Finally, Compass Pathways (Nasdaq: CMPS) will report Phase 3 data for psilocybin in treatment-resistant depression (TRD), which has implications for Cybin’s (Nasdaq: CYBN) CYB003 in major depressive disorder (MDD). These three events offer a range of options for biotech investors, from high-stakes (Nektar) to low-stakes (Ventyx), and something in between (Cybin).
Betting The Company
When we first started writing about Nektar in September 2023, we focused on it as a negative enterprise value (EV) name with an intriguing litigation angle involving Eli Lilly. At that time, Nektar had over $400 million in cash and a market cap of $115 million. The company had recently reported its re-analysis of REZPEG’s Phase 1b AD data and had yet to initiate its own Phase 2b study. Today, the company has $220 million in cash (end of 1Q2025) and carries an approximate market cap of $148 million. The negative EV narrative is no longer pertinent, if it ever was. Later this month, when the company releases top-line data from its Phase 2b AD study, it will have less than 18 months of cash runway remaining. The Eli Lilly litigation, not surprisingly, is moving at a snail’s pace, and in our opinion, is highly correlated with the AD study outcome. The value of the company’s pipeline, predominantly REZPEG for alopecia areata, is again closely linked to the AD outcome. It may seem hyperbolic, but Nektar is betting the company on REZPEG and the outcome of the Phase 2b AD study this month.
Essential Reading
We could write pages about the possible range of outcomes from Nektar’s upcoming study, but fortunately, someone else has done that work for us. Therefore, we recommend that investors considering playing the Nektar AD data take the time to read the analysis by Adam May, which has been widely shared on X. He has subsequently published another lengthy commentary on X, outlining the downside (or is it upside?) of a Nektar miss. Both pieces are essential reading. Although Adam has effectively summarized the Nektar opportunity heading into the AD data, we would like to emphasize a few key points for our readers regarding the data Nektar will share shortly.
Dupi-Killer?
The efficacy benchmark that investors hope REZPEG can meet or exceed is Sanofi’s Dupixent. It is also a benchmark that Nektar management hasn’t avoided as an objective for REZPEG in their 400-patient Phase 2b study. On its Q1 earnings call, Nektar’s Chief R&D Officer stated, “Dupixent is a very important benchmark. It is the leading standard of care in this space. So we’d like to be, at minimum, in the range of the efficacy that you see with Dupixent. And then, of course, we’d like to do even better, improve on that and replicate our results of Phase 1.” This is an ambitious statement because, arguably, REZPEG could fall short of Dupixent-like efficacy, but still have a sound rationale for advancing into Phase 3, given its unique mechanism of action. Nonetheless, it is encouraging to hear Nektar leadership acknowledging the efficacy benchmark that it and investors ideally want REZPEG to achieve.
The primary endpoint for Nektar’s Phase 2b is the change in baseline Eczema Area and Severity Index (EASI) compared to placebo at week 16. In its Phase 1b study, Nektar reported that REZPEG achieved an 83% reduction in EASI from baseline, compared to a 47% reduction for placebo, resulting in a statistically significant 36% improvement in EASI scores for REZPEG over placebo. These EASI reductions, albeit from a small study, are highly competitive. For comparison, in Phase 3, Dupixent demonstrated a 72% reduction in EASI scores from baseline, compared to a 38% reduction for placebo, resulting in a statistically significant 34% improvement in EASI scores for Dupixent over placebo.
The reduction in baseline EASI is a commonly used endpoint for non-registrational AD studies; however, in Phase 3, Nektar will need to employ a different primary endpoint. Therefore, investors should closely monitor the secondary endpoints, particularly EASI75 (percentage of patients achieving a 75% reduction in EASI scores), which is often used as a primary or co-primary endpoint in Phase 3 AD studies. In Phase 3, Dupixent demonstrated a statistically significant 33% improvement in EASI75 compared to placebo. Nektar’s Phase 1b EASI75 data are less compelling, with REZPEG showing a non-statistically significant 21% improvement versus placebo. It is important to note that Nektar’s Phase 1b study utilized a 12-week endpoint, whereas the ongoing Phase 2b employs a 16-week endpoint, which is also the standard length endpoint among its peers. Nektar’s management has asserted that extending the induction period by 4 weeks, allowing for more REZPEG dosing, should enhance efficacy. Regardless, beyond the primary endpoint of baseline EASI reduction, Nektar needs to improve upon the 21% EASI75 improvement observed in Phase 1b. It is clear that when Nektar’s R&D Chief said, “….So we’d like to be, at minimum, in the range of the efficacy that you see with Dupixent. And then, of course, we’d like to even better improve on that and replicate our results of Phase 1.”, he was speaking specifically about baseline EASI, but let’s hope that the same holds for EASI75.
Repeating Ourselves
Nektar is a polarizing name. The stock is indicating that the skeptics outnumber the optimists. Who can blame investors? Nektar has hurt many people over the past five years. Nevertheless, we stand by the statement we made on our last Nektar note, “For those with a stomach for binary clinical readouts, this is a high-risk/high-reward scenario with asymmetric upside potential. Positive data from this Phase 2b study could multiply the stock, and although negative data undoubtedly has a downside, investors will have some insulation…”
Lacking Clinical Intrigue, But….
In contrast to the high-stakes clinical drama about to unfold for Nektar, Ventyx’s upcoming Phase 2a PD data with VTX3232 lacks the same level of clinical intrigue. This open-label, ten-patient study is exploratory, examining the effect of VTX3232 on various PD-relevant biomarkers and neuroimaging. Unlike a randomized controlled trial, this type of open-label, biomarker-focused study typically generates data that the company finds provocative enough to justify advancing the asset. Although Ventyx’s PD data may lack significant clinical intrigue, there is arguably business development intrigue, especially following Sanofi’s acquisition of Vigil Biosciences (Nasdaq: VIGL) last month.
Parallels
In June of last year, Sanofi made a $40 million investment in Vigil for the right of first negotiation for VG-3927, the company’s small-molecule TREM2 agonist for Alzheimer’s disease. Vigil had completed Phase 1 with VG-3927 and was preparing to start Phase 2 before agreeing to Sanofi’s $470 million offer last month.
In September of last year, Sanofi made a $27 million investment in Ventyx for the right of first negotiation on VTX3232, Ventyx’s small-molecule NLRP3 inhibitor. VTX3232 has completed Phase 1 with VTX3232 and is preparing to release top-line Phase 2a data in PD shortly.
Obesity Complication
One potential complication for a Sanofi deal could be Ventyx’s ongoing Phase 2 study with VTX3232 in obesity, which is scheduled to report data later this year. Sanofi doesn’t seem to have any interest in obesity; according to their last pipeline update, they have no active programs in this area. Ventyx’s study is examining more than just weight loss, including various inflammatory and cardiometabolic biomarkers, which arguably could align with Sanofi’s R&D focus. Still, it is clear that Sanofi’s interest in VTX3232 centers on PD and perhaps other neuroinflammatory indications, a point acknowledged by Ventyx’s CEO, Raju Mohan, in the past. This raises the question of whether Ventyx, Sanofi, or both might prefer to wait for the obesity data later this year before deciding how to proceed with VTX3232.
Worth The Wait?
Compass Pathways (Nasdaq: CMPS) is scheduled to report top-line data from its first Phase 3 study with COMP360, its psilocybin-based product, for the treatment of treatment-resistant depression (TRD) later this month. When initiated in 2022, Compass had guided that the Phase 3 results should be available by mid-2024. A year delayed, investors are hoping these data are worth the wait.
Compass’s psychedelic peers will also be watching the Phase 3 results closely. Most notably, Cybin (Nasdaq: CYBN), whose deuterated psilocybin analog, CYB003, is following closely behind Compass with its own Phase 3 study, scheduled to report top-line data in major depressive disorder (MDD) next year. Although CYB003 has distinct properties, such as a quicker onset and shorter duration (reduced trip time), it works mechanistically, 5HT2A agonism, in the same manner as COMP360. Success in Phase 3 with COMP360 in TRD should bolster Cybin investors’ confidence in CYB003, and vice versa; if COMP360 were to fail, it may cast doubt on CYB003.
Defining Success
Compass’s first Phase 3 trial is evaluating a single 25 mg dose of COMP360 versus placebo in 255 patients with TRD. This month, the company is set to report the primary endpoint data, the change in the Montgomery–Åsberg Depression Rating Scale (MADRS), at six weeks. The company has indicated that a two-to-three-point improvement in MADRS for COMP360 over placebo is meaningful; however, we believe investors are seeking a larger treatment effect. In their earlier 233-patient Phase 2b study, which tested two doses of COMP360 (25 mg and 10 mg) against a subtherapeutic dose of COMP360 in the control arm (1 mg), the 25 mg dose demonstrated a statistically significant 6.6-point improvement in MADRS at week 3 (primary endpoint) compared to the control. The shorter endpoint and active control arm in the Phase 2b study are subtle but potentially meaningful differences compared to the ongoing Phase 3, which may impact whether the Phase 2b MADRS results are replicated in Phase 3. Nonetheless, we believe investors are expecting (hoping) for results that flirt with the MADRS improvement seen in Phase 2b rather than the more cautious, two-to-three-point improvement suggested by the company. We suspect Cybin and its investors are hoping for the same.