- Nektar Therapeutics is laying off 70% of its workers, announcing Monday a reorganization plan that will enable it to fund operations through 2025 and focus on an inflammatory disease drug in Phase 2 testing. The company will also stop work on a cancer drug it had, until recently, been developing with Bristol Myers Squibb.
- Nektar's chief medical officer, Dimitry Nuyten, will leave the company as part of the restructuring plan. Chief commercial officer John Northcott, who had been preparing to launch the Bristol Myers-partnered drug, is stepping down as well, Nektar said.
- Nektar is one of around 40 drugmakers that have restructured since last fall amid a wider industry downturn. The reorganization plan aims to avoid a new fundraising while Nektar's share price is at its lowest point in nearly a decade, and to keep its investors from seeing further losses.
Bristol Myers paid Nektar $1.9 billion in 2018 for rights to an experimental cancer medicine known as bempegaldesleukin, a deal that drove the smaller drugmaker's strategy for more than three years. But the medicine's failure in multiple clinical trials, and Bristol Myers' decision to end the alliance, forced Nektar to refocus, as the nearly $1.8 billion in partnership payments the biotech had been counting on will no longer materialize.
The restructuring plan it's come up with will reduce its workforce from 735 to 225 employees, trimming $120 million in expenses from its yearly budget. In a press release, Nektar said the size of the layoffs "aligns" with the research and development work for bempegaldesleukin, as well as planned commercialization and distribution activities.
The company also will shut down a research facility in India and sublease space in its facilities in California.
Between those cost cuts and around $704 million in cash on hand at the end of March, Nektar executives believe they can fund the company through 2025. At that point, Nektar expects to have data on two pipeline projects that are crucial to its future.
The first is an experimental drug for lupus and eczema that Nektar is developing with Eli Lilly. Nektar could net $50 million from Lilly when Phase 3 trials begin, executives said on a conference call. Accordingly, Brian Kotzin, Nektar's head of immunology, is filling the role of chief medical officer.
The second is a cancer drug Nektar is testing in alongside other treatments in a wide range of diseases, including lymphoma and colorectal tumors. Nektar may also test that drug in combination with cell therapies to help boost their potency.
Founded in 1990, Nektar discovered the digestive drug Movantik and the hemophilia treatment Adynovate, which were licensed to AstraZeneca and Baxalta respectively. The company sold the royalty rights to both of those products in 2020 for $150 million.
Nektar has also sold off a drug delivery technology that helps create longer-lasting doses of biological drugs and is in approved treatments like the anti-inflammatory medicine Cimzia. The biotech still isn't profitable, however, having lost $524 million on $102 million revenue in 2021.
Nektar's shares fell more than 6% in early trading Tuesday, changing hands at $4.42 apiece.