Dive Brief:

• Nektar Therapeutics, after weathering a devastating disappointment in cancer research, plans to move into late-stage testing with a drug for hair loss.
• The medicine, rezpegaldesleukin, is being evaluated against a disease called alopecia areata in which a patient’s immune system attacks hair follicles. About 2% of both men and women suffer from the condition and there’s an “urgent need” for more effective therapies, Nektar said. 
• Results from the Rezolve-AA study released Tuesday show that rezpegaldesleukin can help promote hair growth in patients with severe forms of the disease. But the Phase 2b trial failed to reach statistical significance, which Nektar blamed on the inclusion of four patients who should not have been eligible to participate. Without them in the analysis, the drug met the study’s main objective, Nektar said.

Dive Insight:

Investors appeared wary of the results, sending Nektar shares down about 7% early Tuesday. The biotech’s stock now trades under $50, after soaring to record highs in early 2018 on the heels of a cancer drug research deal with Bristol Myers Squibb.

Bristol Myers paid Nektar $1 billion up front and made an $850 million equity investment as part of that 2018 agreement. The companies had hoped to develop a potent combination cancer treatment, but a Phase 3 trial failed in 2022, leading Bristol Myers to scrap the partnership. 

The fallout forced Nektar to lay off 70% of its workers as it regrouped. The company later flirted with a merger with PureTech Health, but ultimately moved on alone and focused on rezpegaldesleukin, which had once been partnered with Eli Lilly. A study released earlier this year found success for the drug in treating eczema, igniting a comeback for Nektar shares, which had fallen below $10.

In its release Tuesday, Nektar emphasized that the exclusion of the four patients had no major effect on the efficacy seen in the treatment arms in the study, while the success measured in the placebo arm was cut almost in half. The difference was entirely due to one patient given placebo who should not have been included from the outset, Nektar said.

The analysis of all participants found that patients given rezpegaldesleukin had either a 28% or 30% reduction in a hair loss measurement called a SALT score, compared with 11% for placebo. With the four patients excluded, those numbers moved to about 30% for each of the treatment arms and 5.7% for the placebo group.

Safety results were similar to previous studies, with almost all issues considered mild or moderate and self-resolving, Nektar said. Only 1.4% of patients dropped out because of side effects and there was no increased risk of significant problems like cardiovascular complications that have cast a shadow on multiple so-called JAK inhibitor drugs approved for the condition.

Overall, the results show potential for rezpegaldesleukin, Jefferies analyst Roger Song wrote in a note to clients. “We believe there will be a market and great need for Rezpeg,” Song wrote. The dearth of available treatments and the drug’s safety profile offer “a strong commercial opportunity,” he said.

Nektar plans to move the drug into Phase 3 research next year.