Bristol-Myers lassos the next big thing in I/O, grabs '214 rights in a record $3.6B deal with Nektar
After figuring for days in a swirling mix of rumors about a possible buyout, Nektar Therapeutics $NKTR is putting an end to the buzz with a record, multibillion-dollar partnership deal with Bristol-Myers Squibb for a minority share of its early-stage immuno-oncology drug NKTR-214.
Looking for a major new commercial opportunity to follow up on its two big I/O leaders — Opdivo and Yervoy — Bristol-Myers has forged a broad deal that will give the big biotech an exclusive development period to pursue a broad new combo development program covering 20 indications involving 9 tumors, matching ‘214 with Opdivo and Yervoy.

Bristol-Myers $BMY is paying Nektar $1.85 billion in cash — including $850 million for an equity stake — in exchange for a 35% revenue split on ‘214. There’s another $1.78 billion in milestones, of which $1.43 billion is for near-term development and regulatory milestones. That brings the total at stake to $3.63 billion.
That’s a new record for the dealmaking charts, with numbers that clearly indicate that Bristol-Myers — already partnered with Nektar on one small Opdivo pact — was not the only interested partner to hunt rights for this drug.
The deal gives Bristol-Myers a period of exclusivity on these indications and tumors that extends to a commercial launch or several years after the effective date of the deal. And while the company has 14 months to get them underway, the first trials are already being ramped up with a shot at registrational data that could start rolling in in about 18 to 24 months, according to the Nektar team.
They’re planning an R&D juggernaut, one that will require 15,000 patients and a deep-pocket player like Bristol-Myers, which is all in on I/O as Merck and rivals look to overcome their frontrunner status.
“For years we’ve known how important that pathway was but no one was able to safely access that,” says Stephen Doberstein, head of R&D for Nektar. “This was a singular achievement, a real tour de force of protein engineering.”
And perhaps most importantly for Bristol-Myers and Nektar, it’s an achievement Doberstein and others believe will not be easily mimicked by anyone else looking to achieve the same result.
“There’s a really special synergy between NKTR-214 and the way it basically changes the immune system and how that synergizes with the mechanism of action of Opdivo,” adds Jonathan Zalevsky, Nektar’s chief scientific officer.

“We now have three therapies in immuno-oncology with validated mechanisms in IO which have shown clinical benefit,” says Saurabh Saha, senior vice president and global head of translational medicine at Bristol-Myers: PD-1 (Opdivo), CTLA-4 (Yervoy) and now ‘214. “The T cell is the warhead against cancer cells,” he adds. And scientists in both groups are eager to continue a broad program that doesn’t just spur a CD4/CD8 T cell attack on the cancer cells, but also raises the level of PD-L1 expression on T cells, getting them to reach more patients more effectively.
Bristol-Myers isn’t just handing over a blockbuster upfront. The I/O leader is also paying 67.5% to 78% of the clinical trial costs involved in the combo studies. And the pact leaves Nektar with sole pricing power, part of a package that leans heavily in its favor.
The therapy — an in-house project at Nektar which has a unique target in the IL-2 pathway — is designed to bind to the CD122 receptor on the surface of CD-8 and CD-4 positive immune cells to whip up an attack on various cancers.
That profile fit Bristol-Myers perfectly when Nektar earlier struck a not uncommon 50/50 deal to use their drug in combination with Opdivo (nivolumab), matching a therapy aimed at driving an immune response with a popular checkpoint blockbuster that helps take the brakes off the assault.

But Nektar attracted the industry spotlight at SITC last November with a medley of early-stage data points that underscored ‘214’s wide-ranging potential. And then Bloomberg stirred the pot a few days ago with a report quoting sources claiming that Nektar — a hotly buzzed about M&A target — was scouting deals, including a potential sale.
With that kind of steamy speculation in a hothouse environment for biotech acquisitions, Nektar’s shares have more than tripled in the last 4 months. Those M&A rumors were initially dampened by today’s news of a mega-partnership instead of a buyout. And disappointed investors quickly drove down Nektar’s shares more than 3% early Wednesday morning, with the stock jumping into the green by mid-morning as some upbeat assessments of the deal began to circulate.
At SITC, Nektar’s investigators noted some highlights on ‘214, including:
•In treatment-naïve first-line patients with stage IV melanoma, researchers tracked responses in 7 of 11 patients (63%), with 2 complete responses — no visible signs of the disease — and 5 partial responses. Not all of these numbers are precise. It’s important to note though that one of the CRs and one of the PRs were unconfirmed — emphasizing just how early these results were.
•Among 13 kidney cancer patients with one or more baseline scans, responses were observed in 6 (46%), with 1 complete response and 5 partials.
•For a small group of 4 patients with advanced PD-L1/negative non-small cell lung cancer, the investigators tracked a response in 3 (75%), with 1 complete and 2 partials.
“Single-agent nivolumab is known for all these indications, with a 34% response for melanoma,” Mary Tagliaferri, a top researcher at Nektar, told me last November. A combination could prove to be significantly better.
That is particularly important for Bristol-Myers, which earned $5 billion from Opdivo sales last year. While on track to become a megablockbuster, new PD-1/L1 checkpoints are coming along that threaten to overwhelm and commoditize the first bunch of pioneers, often with little clear data to distinguish one from another. That leaves the frontrunners looking for new and better ways to distinguish their drugs with combinations involving early-stage efforts like this.
For Bristol-Myers, the Nektar program offers a clear path to maintaining a leadership role in I/O.
Hammering away at these mechanisms, the biomarkers involved and the way these combinations work, says Saha, is crucial to the longterm success of these drugs for patients.
Adds Saha: “This is the only way we’re going to be able to conquer cancer.”