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.

Stephen Dober­stein

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.

Saurabh Sa­ha

“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.

Jonathan Za­levsky

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.”

The mRNA player Moderna is further cementing its presence on the African continent.

Moderna announced on Thursday that it has finalized an agreement with Kenya’s government to partner up and bring an mRNA manufacturing facility to the east African nation. The new facility aims to manufacture up to 500 million doses of vaccines annually. Moderna also said the new facility will have the ability to spike its production capabilities to respond to public health emergencies on the continent or globally.

A Massachusetts federal judge on Wednesday dismissed a class action lawsuit filed by investors against Biogen and several of its current and former executives over the company’s failed Alzheimer’s drug, Aduhelm (aducanumab).

The investors argued that Biogen’s contact with the FDA was unlawful and that the company made 25 false and misleading statements, including statements about the rollout and price of the drug.

The EMA released updated recommendations today for the use of JAK inhibitors (JAKi) after reviewing data from several clinical trials that showed increased incidents of issues in certain patients who have rheumatoid arthritis and other risk factors.

The EMA noted malignancy, major adverse cardiovascular events (MACE), serious infections, venous thromboembolism (VTE) and mortality in some patients.

Thermo Fisher Scientific is putting down more roots in the Bay Area.

The manufacturer opened the doors to a new cell therapy manufacturing facility next to the University of California-San Francisco Medical Center’s Mission Bay campus and on the university’s campus.

UCSF and Thermo Fisher have had a partnership since 2021, with the new site focusing on manufacturing cell therapeutics for certain cancers, including glioblastoma and multiple myeloma. The new site plans to use Thermo Fisher’s expertise in manufacturing services to help UCSF accelerate the development of cell therapies and eventually get them into the clinic, said Dan Herring, the general manager of cell therapy services at Thermo Fisher, in an interview with Endpoints News.

Paul McKenzie took over as CEO of Australian pharma giant CSL this month, following in the footsteps of long-time CSL vet Paul Perreault.

With an eye on mRNA, and quickly commercializing its new, $3.5 million-per-shot gene therapy for hemophilia B, McKenzie and chief medical officer Bill Mezzanotte answered some questions from Endpoints News this afternoon about where McKenzie is going to take the company and what advances may be coming to market from CSL’s pipeline. Below is a lightly edited transcript.