In a change of plans, Nektar spins out its opioid into a new biotech subsidiary as FDA PDUFA date looms
Nektar Therapeutics is spinning off a new biotech company and gifting it with their late-stage pain drug NKTR-181 just three months ahead of a revised PDUFA date. And they’ve recruited a former Merck exec to take the lead — marking a big shift from the licensing deal they had confidently been projecting.
Nektar $NKTR has heavily touted the drug as the first opioid that will be free of the immediate euphoric side effects that have triggered an epidemic of abuse around the country. It’s been tested in thousands of patients with lower back pain or non-cancer pain. Investigators for Nektar say that the drug is quickly expelled — allowing for twice-daily dosing — and has a hard time making it through the blood-brain barrier, to limit the addictive side effects.
Now it’s being handed off to a wholly owned subsidiary, Inheris Biopharma, which is being given control of the commercial launch — if it’s approved. Jay Galeota has been tapped as CEO. He had been president of G&W Laboratories, a job he landed after a long stint at Merck that ended with his role as the BD and strategy chief.
That wasn’t the original plan, though. Two years ago Nektar CEO Howard Robin made it crystal clear to me that he expected to set up a licensing deal or co-marketing pact to handle this drug launch.
“First, you know this is pretty much a primary care market,” Robin told me in the summer of 2017, and Nektar’s not in a position to market to a large primary care audience. “We’re an R&D company at this stage, looking for a partner who can do this. While it is an opioid, it’s novel and different.” A deal “could range from a pure out-licensing agreement with a very significant upfront and very significant back end, or a joint venture and we keep our hand in sales and marketing.”
He didn’t mention setting up a wholly owned subsidiary, the way Ionis did with Akcea. He did burnish the value, though.
“The regulatory authorities understand that this is potentially a solution to the opioid abuse in our country. No other molecule like this is available.”
The absence of any deal underscores that this drug may not be the big one that Nektar likes to promote. And some analysts are distinctly unimpressed. Take Daina Graybosch at SVB Leerink.
Given recent opioid abuse deterrent products have struggled to gain a foothold amongst generic options, we remain skeptical that NKTR-181 will be a massive commercial success, modeling peak revenue at $79M. We agree spinning out this unit is a sensible business decision, given the orthogonal regulatory, commercial, and market access challenges in pain vs oncology.
Joe Stauffer is the new CMO, with responsibility for the preclinical pipeline that Inheris is getting in the semi-spinout. And George Shiebler is the new general counsel.
In a statement, Galeota said the three top execs will now focus on building out the team as they prep a commercial operation in a huge field.