- Bristol Myers Squibb and Nektar Therapeutics are ending an immunotherapy partnership, announcing Thursday they will cease all work pairing Bristol Myers' Opdivo with an experimental Nektar drug following setbacks in kidney and bladder cancer. The announcement comes one month after the combination also failed in melanoma.
- Nektar said it is drafting a new "strategic" plan to conserve cash following termination of the partnership, which could have paid out a further $1.8 billion to the biotech had the drug combination succeeded. The company reported $734 million in cash and short-term investments as of Dec. 31.
- Shares in Nektar fell by a third to trade around $4, dropping the company's market value well below $1 billion. Investor interest could shift now to another experimental drug, partnered with Eli Lilly, that has had promising mid-stage results in eczema.
Bristol Myers paid $1.9 billion in 2018 to gain rights to Nektar's drug, called bempegaldesleukin, at a time when interest was high in drugs designed to stimulate immune-signaling proteins called interleukins. There was particular interest from companies like Bristol Myers, which already sold immunotherapies like Opdivo and aimed to improve their effectiveness or expand their use into new types of cancer.
Hopes of success dimmed when the negative melanoma study results were announced in March. Now, the companies say the combination doesn't work in renal cell carcinoma or urothelial cancer.
In renal cell carcinoma, the Opdivo-bempegaldesleukin combination didn't lead to a better response rate than Cabometyx or other approved drugs, according to reviewers of a Phase 3 trial. At an interim checkpoint, the reviewers also saw no signs the Opdivo-bempegaldesleukin combination was helping patients to live longer.
In urothelial cancer, meanwhile, the combination didn't trigger a sufficient response rate in a Phase 2 trial to justify continued research, according to trial reviewers.
These failures prompted the companies to also discontinue all other trials of the drug combination.
Following the March announcement, Nektar CEO Howard Robin hinted that "substantial" and "difficult" changes would be coming to the company's operations. In a regulatory filing after Thursday's announcement, the company said it will issue a new strategic plan when it publishes its first quarter financial results.
When those results come out, investors could also be interested in what Nektar says about another drug in its pipeline called NKTR-358, which is being tested in a variety of autoimmune disorders in partnership with Eli Lilly.
In an April 14 note to clients, Stifel analyst Benjamin Burnett said Nektar's combination of market capitalization, cash and debt translates to a market value of $330 million. Based on that figure, Burnett speculated that Lilly could choose to acquire Nektar outright because it would owe up to $250 million in fees for the NKTR-358 development program if certain milestones are achieved.