Moment of truth looms for Nektar, Bristol-Myers with a major update to NKTR-214 combo — and the latest snapshot is not promising

Just 8 months after Bristol-Myers paid Nektar $1.85 billion in cash upfront to ally themselves on NKTR-214, an IL-2 drug that uses pegylation tech to try to overcome the severe limitations that hamper the first-gen approaches, researchers are scheduled to add on a significant update to their proof-of-concept Phase I/II study.

On Tuesday, investigators got a peek at some new numbers when Nektar filed a short-term, 6-week update in an abstract for SITC adding 10 patients to the mix receiving a combination of Opdivo and NKTR-214 for first-line melanoma. They counted an extra 5 objective responses among the 38 — which keeps the ORR response rate right at half.

That’s not good, especially considering their stage 1 results were significantly higher — triggering the fervor for this drug — and Opdivo plus Yervoy scored just as high. Days ago Bristol-Myers outlined 4-year overall survival results from CheckMate-067: 53% for Opdivo plus Yervoy combo, 46% for Opdivo alone, and 30% for Yervoy alone.

That’s a high bar. Nektar’s shares took a 10% hit on Tuesday.

The hype over NKTR-214 helped drive Nektar’s share price through the roof, but when researchers unveiled a drop to 50% ORR at ASCO, the share price was routed. As of today, the stock is down 66% from its high this year. And the drug’s rep wasn’t helped when ex-Kerrisdale analyst Aaron Wedlund posted a short attack outlining the reasons why he felt Nektar’s IL-2 approach was a non-starter.

Now all eyes are shifting to one of the biggest catalysts in biotech’s Q4. On Friday, researchers will offer a 3-month update on the 38 patients, and if they can’t do significantly better, this drug will remain under a very dark cloud.

The initial approach with IL-2, which achieved an approval for Proleukin, underscored just how promising the target was. But it’s plagued with problems, ranging from the way it stirs up immunosuppressive Tregs to a dose-limiting tox profile that axed its potential. The drug was recently acquired after garnering annual sales of only $80 million.

What Nektar is doing is masking the alpha receptor site with its pegylated approach to see if they can create a durable drug that still hits gamma/beta sites as needed for a therapeutic impact. But if the drug is still handicapped by IL-2 limitations, and can’t do significantly better than PD-1 alone, it won’t have much of a future in this cancer drug market.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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