Nek­tar sells off roy­al­ties on its 2 ap­proved drugs for $150M in cash, re­dou­bling fo­cus on I-O can­di­dates

A lit­tle less than a year ago, an FDA ad­comm unan­i­mous­ly re­ject­ed Nek­tar Ther­a­peu­tics’ opi­oid pro­gram, ef­fec­tive­ly send­ing it to the chop­ping block. Now, look­ing for a quick cash in­fu­sion to fi­nance clin­i­cal tests for two oth­er can­di­dates, Nek­tar will sell off roy­al­ties for its on­ly two ap­proved US med­i­cines.

Roy­al­ties on fu­ture sales of part­ner meds Adyno­vate and Movan­tik will be turned over to Health­care Roy­al­ty Man­age­ment in ex­change for $150 mil­lion in cash, San Fran­cis­co-based Nek­tar an­nounced Tues­day morn­ing. HCR is ex­pect­ed to make the pay­ment by the end of the year, and Nek­tar said it plans to put the funds to­ward clin­i­cal tri­als for its ear­ly- and late-stage im­mune-on­col­o­gy pro­grams tar­get­ing IL-2 and IL-15.

In­vestors were most­ly mut­ed on the news, with Nek­tar $NK­TR shares up as much as 4% in ear­ly Tues­day trad­ing. But by the clos­ing bell, the stock price had fall­en to most­ly flat.

With the deal, HCR is el­i­gi­ble for roy­al­ty pay­ments of up to $210 mil­lion for each drug through 2025; if that fig­ure isn’t met by then, $240 mil­lion for each. Once those num­bers are reached, roy­al­ty rights will be re­turned to Nek­tar.

Adyno­vate is a he­mo­phil­ia A drug on which Nek­tar part­nered with Bax­al­ta, a for­mer Shire com­pa­ny now owned by Take­da. It’s an ex­tend­ed half-life re­com­bi­nant fac­tor VI­II (rFVI­II) treat­ment. Per the terms of Nek­tar’s col­lab­o­ra­tion with Bax­al­ta, Nek­tar had been el­i­gi­ble for roy­al­ties of 4% to 6% on the first $1.2 bil­lion in year­ly sales, fol­lowed by a flat 13% roy­al­ty on every sub­se­quent dol­lar.

Movan­tik, mean­while, was de­vel­oped in tan­dem with As­traZeneca for opi­oid-re­lat­ed con­sti­pa­tion in adults. Nek­tar had pinned the drug as a po­ten­tial block­buster, but sales got off to a slow start af­ter its 2014 ap­proval. Even­tu­al­ly, As­traZeneca sold most of Movan­tik’s glob­al rights to Red­Hill Bio­phar­ma for $67.5 mil­lion back in Feb­ru­ary.

Un­der its deal with As­traZeneca, Nek­tar was to re­ceive es­ca­lat­ing roy­al­ties on the drug start­ing at 20%.

Nek­tar’s cash in­fu­sion will go main­ly to­ward two of its pro­grams: be­m­pe­galdesleukin (or NK­TR-214) and NK­TR-255. The for­mer is the com­pa­ny’s cur­rent lead pipeline pro­gram, a CD122-pref­er­en­tial IL-2 ag­o­nist, and is be­ing stud­ied in sev­er­al Phase III tri­als in com­bi­na­tion with Bris­tol My­ers Squibb’s Op­di­vo. Some of the in­di­ca­tions be­ing looked at in­clude metasta­t­ic melanoma, re­nal cell car­ci­no­ma and mus­cle-in­va­sive blad­der can­cer.

Re­searchers are al­so look­ing at be­m­pe­galdesleukin as a monother­a­py and in com­bi­na­tion with Keytru­da and oth­er in-house pro­grams, though those stud­ies are ear­li­er in the de­vel­op­ment stages.

NK­TR-255 is an IL-15 re­cep­tor ag­o­nist that Nek­tar says is de­signed to ex­pand NK cells. The can­di­date, whol­ly owned by Nek­tar, is in two Phase II stud­ies — one for non-Hodgkin’s lym­phoma and mul­ti­ple myelo­ma in com­bo with Rit­ux­an or Darza­lex, and an­oth­er in head, neck and col­orec­tal can­cer paired with Er­bitux.

Nek­tar got off to a rough start in 2020 when its opi­oid pro­gram was re­buffed by an FDA ad­comm 27-0 in Jan­u­ary. The for­mer pro­gram, dubbed NK­TR-181, had been billed by the com­pa­ny as a less-ad­dic­tive op­tion to oxy­codone, but reg­u­la­tors as well as ad­comm mem­bers not­ed the de­clin­ing use of opi­oids by physi­cians across the coun­try.

The agency was al­so con­cerned over the fact that the ex­per­i­men­tal drug could still be phys­i­cal­ly ma­nip­u­lat­ed, af­ter which it could be sub­ject to abuse. CEO Howard Robin had laid out a glow­ing sales pitch for the pro­gram in 2017, on­ly to change his plans and spin it out in­to a new sub­sidiary in 2019.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

UP­DAT­ED: Boehringer nabs FDA's first in­ter­change­abil­i­ty des­ig­na­tion for its Hu­mi­ra com­peti­tor — but will it mat­ter?

The FDA late Friday awarded Boehringer Ingelheim the first interchangeability designation for its Humira biosimilar Cyltezo, meaning that when it launches in July 2023, pharmacists will be able to automatically substitute the Boehringer’s version for AbbVie’s mega-blockbuster without a doctor’s input.

The designation will likely give Boehringer, which first won approval for Cyltezo in 2017, the leg up on a crowded field of Humira competitors.

Bio­gen hit by ALS set­back with PhI­II fail­ure for tofersen — but fol­lows a fa­mil­iar strat­e­gy high­light­ing the pos­i­tive

Patients and analysts waiting to hear Sunday how Biogen’s SOD1-ALS drug tofersen fared in Phase III didn’t have to wait long for the top-line result they were all waiting for. The drug failed the primary endpoint on significantly improving the functional and neurologic decline of patients over 28 weeks as well as the extension period for continued observation.

In fact, there was very little difference in response.

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Two drug­mak­ers hit with PDU­FA date de­lays from FDA amid back­log of in­spec­tions

As the FDA is weighed down with more and more pandemic responsibilities, the agency is beginning to miss PDUFA dates with more frequency too. Two different companies on Monday said they received notices that the FDA has not completed their drug reviews on time.

The review of an NDA for Avadel Pharmaceuticals’ candidate treatment for narcolepsy is not coming this month, the company said, and the review of UCB’s BLA for bimekizumab, used to treat moderate to severe plaque psoriasis, will miss its target date as well.

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Reshma Kewalramani, Vertex CEO (YouTube)

Ver­tex gets much-need­ed win with ‘ex­tra­or­di­nary’ first pa­tient re­sults on po­ten­tial di­a­betes cure

Vertex said Monday that the first patient dosed with its cell therapy for type 1 diabetes saw their need for insulin injections vanish almost entirely, a key early step in the decades-long effort to develop a curative treatment for the chronic disease.

The patient, who had suffered five potentially life-threatening hypoglycemic — or low blood sugar — episodes in the year before the therapy, was injected with synthetic insulin-producing cells. After 90 days, the patient’s new cells produced insulin steadily and ramped up their insulin production after a meal like normal cells do, as measured by a standard biomarker for insulin production.

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Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Scott Struthers, Crinetics CEO

Cri­net­ics spins out ra­dio­phar­ma ef­forts in­to a new com­pa­ny, high­light­ing the grow­ing field­'s al­lure

Largely known for its nonpeptide small molecule research, Crinetics has been keeping its radiopharma work comparatively under wraps. But that changed Monday afternoon as the California biotech spun out a new company focused solely on the burgeoning field.

Crinetics launched Radionetics after the closing bell Monday, the company announced, seeding the new entity with $30 million raised from 5AM Ventures and Frazier Healthcare Partners. Radionetics will start with its own radiopharma-centric platform and a pipeline of 10 programs aimed at solid tumors.

Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.