Deals

Eli Lilly offers $400M-plus deal to bag an early-stage autoimmune drug from Nektar

With little more than preclinical data and some initial dosing cohort insights available for review, Eli Lilly is making a $400 million-plus play to buy into an early-stage autoimmune drug at Nektar $NKTR that the pharma giant believes has megablockbuster potential.

Dave Ricks, Eli Lilly CEO

Eli Lilly $LLY has agreed to acquire co-development rights on NKTR-358 — which was first dosed in a human in a Phase I study 4 months ago — for $150 million up front plus $250 million in milestones. Lilly will pick up 75% of the Phase II development costs and Nektar will have the opt-in rights on this drug on an indication-by-indication basis.

The drug is designed to activate regulatory T cells by targeting IL-2, an approach Lilly and Nektar believe could put the immune system back on track in fixing autoimmune diseases.

Nektar CEO Howard Robin, who is in no way reluctant to talk up the prospects of the drugs the biotech has in the clinic, cited this drug for its unique qualities in the Q1 call back in April. Here’s what he had to say:

Unlike current immunosuppressant agents, which globally weaken the immune system to only address disease symptoms. NKTR-358 is a first-in-class resolution therapeutic designed to specifically correct the underlying pathology of autoimmune disease. NKTR-358 is the only medicine of its kind in clinical trials. It has the potential to have a profound effect on a number of immune and inflammatory disorders, including lupus, IBD, RA, psoriasis, MS, Type 1 diabetes and even allergy.

With an asset that has this much broad potential in so many indications, we believe the right strategy for NKTR-358 is to seek a co-development and co-promotion partnership with a company that has a strong leadership position in immunology and importantly shares our vision for the broad development of NKTR-358. Our goal is to enter into partnership this year.

Nektar preclinical R&D chief Jonathan Zalevsky, who’s credited as the inventor, added:

Unlike current immunosuppressant agents, which globally weaken the immune system to only address disease symptoms. NKTR-358 is a first-in-class resolution therapeutic designed to specifically correct the underlying pathology of autoimmune disease. NKTR-358 is the only medicine of its kind in clinical trials. It has the potential to have a profound effect on a number of immune and inflammatory disorders, including lupus, IBD, RA, psoriasis, MS, Type 1 diabetes and even allergy.

He went on to say that this is the kind of drug that can be self-administered.

That’s the kind of profile that Lilly — a major player in diabetes — finds attractive. It’s also the kind of big early-stage deal that former CEO John Lechleiter was largely unwilling to pursue. New CEO Dave Ricks, though, has proven eager to add more drugs to the pipeline after a string of new drug approvals capped by a big setback with the FDA’s rejection of baricitinib.

Nektar’s Robin has been wheeling and dealing over the last few months. The company’s IL-2 research has spawned immuno-oncology programs as well as a Takeda partnership in March. That followed a combo deal with Bristol-Myers Squibb last fall. And after adding Phase III data on its abuse-resistant opioid NKTR-181 just days ago, Robin revived talk of a Big Pharma partnership there as well. Nektar, though, also just ran into a setback after European experts snubbed its pitch for an early OK on its cancer drug Onzeald (NKTR-102).


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