Nektar, stung by new investor lawsuit over IL-2 drug, secures $150M for Keytruda combo pivotal trial
Nektar Therapeutics’ IL-2 drug hasn’t always lived up to expectations in the four and a half years since it scored a prominent ally in Bristol Myers Squibb — a pact that eventually ballooned to $3.6 billion.
The early data snapshots for a combo of bempegaldesleukin, or NKTR-214, with Opdivo, in particular, rattled investors, and the biotech’s explanation, pinning the blame on manufacturing, did little to salvage their stock price. In fact, just yesterday, two shareholders sued the board of directors for hyping trial results and then selling $171 million worth of stock at an inflated price.
But it hasn’t stopped new partners from seeing the potential in this particular I/O add-on to the mainstay checkpoint inhibitors.
Merck has jumped in for an expanded collaboration to test Keytruda with bempeg in a registrational trial for squamous cell carcinoma of the head and neck, adding to a slate of ongoing Phase III programs Nektar has with Bristol Myers. And they won’t be running the trial on their own dime; Abingworth and Blackstone have promised, through their SFJ Pharmaceuticals subsidiary, to bankroll the study with a commitment of up to $150 million.
In return, Nektar would pay success-based annual milestone payments over seven to eight years — but only if bempeg is approved for the specified indications.
The head and neck cancer study — which follows a dose optimization study exploring Keytruda plus bempeg across a suite of cancers including melanoma, non-small cell lung cancer and urothelial carcinoma — is expected to wrap up in 2024.
“Earlier studies of BEMPEG in combination with immune checkpoint inhibitors, also known as ICIs, evaluated in patients with immune-sensitive cancers have shown the potential to increase and deepen treatment responses as compared to historical rates for ICIs alone,” Jonathan Zalevsky, chief R&D officer at Nektar, said in a statement.
Merck’s PD-1, he added, is the leading checkpoint inhibitor in the setting of advanced head and neck cancer.
The Nektar team led by Zalevsky and Brian Kotzin, who recently replaced Wei Lin as head of development, is tasked with planning and carrying out the trial starting later this year, which will target 500 patients with metastatic or unresectable recurrent SCCHN whose tumors express PD-L1.
With pivotal Opdivo/bempeg data looming for cancers of the skin, kidney and bladder, they are banking on a pipeline rebound after Nektar chopped an opioid program and sold off royalties to their two marketed drugs to focus on the I/O branch.
Back in 2019 CEO Howard Robin assured investors that the “softening up” of responses observed in the early trials had to do with a suboptimal batch of drug material. And he promised it won’t happen again.
Analysts aren’t ready to buy in just yet, especially given the fierce competition from all the new players that have shown up on the IL-2 scene.
As SVB Leerink analyst Daina Graybosch wrote in a recent note:
Presentations at recent scientific conferences highlight the promise of Nektar’s early pipeline, but investors have made up their mind on the promise of bempegaldesleukin and we expect the stock to remain stubbornly flat until randomized data — slipping another quarter to 2022.
Billed as a CD122-preferential IL-2 pathway agonist, bempeg is designed to unleash the cancer-killing signal while keeping toxicity low enough for outpatient administration.