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Can Nektar Therapeutics Bounce Back from its Massive Tumble?

21 Jan Can Nektar Therapeutics Bounce Back from its Massive Tumble?

Nektar Therapeutics (NASDAQ: NKTR), a biopharmaceutical Company engaged in developing candidates for oncology, auto-immune and chronic pain, has announced the withdrawal of its application for oxycodegol (formerly NKTR-181), as it received adverse advisory committee decision from both Anesthetic and Analgesic Drug Products Advisory Committee, and Drug Safety and Risk Management Advisory Committee. The Company has decided to cease further development and withdrawn it’s NDA for the drug sending, which was filed by the Company and accepted by the FDA in July 2018.

The FDA was expected to announce its decision on oxycodegol in August 2019, however it’s scientific and policy guidelines pertaining to opioid resulted in the postponement of the advisory committee meetings. The Company had earlier announced that it had used appropriate, well-established safety, efficacy and human abuse potential study designs, which had previously led FDA to approve other opioid-based analgesics. Nektar had expressed concerns about the approval of oxycodegol, owing to regulatory uncertainty over approval of opioid-based drugs.

The Company will have cost savings of approximately $75-$125 million in 2020 due to the discontinuation of development of oxycodegol and related commercialization and post-approval studies costs. Nektar now intend to refocus on its oncology and auto-immune platform consisting NKTR-358 (Collaboration with Eli Lilly) in autoimmune diseases and NKTR-255 (Collaboration with Gilead Sciences GLD). The Company recently expanded its collaboration with Bristol-Myers BMY to study bempegaldesleukin, its lead immune-oncology candidate, in treatment of adjuvant melanoma and muscle-invasive bladder cancer.

Nektar Therapeutics (NASDAQ: NKTR)

Market Cap: $3.96B; Current Share Price: 22.48 USDChart
Data by YCharts

Lower Back Pain affects over 80 percent of adults at some point in their lives, making it the leading cause of missed work days. This pain can be further categorized into short term or acute back pain, which lasts for a short period of time and resolves on its own. Subacute low back pain lasts between 4 to 12 weeks, while chronic back pain lasts for over 12 weeks and is usually the persists even after an injury or underlying cause is treated. Lower Back Pain can also be caused due to disc degeneration, ruptured or herniated discs, Sciatica, Radiculopathy, sprains and strains to name a few. Men and women are equally at risk of developing this condition, with factors such as age, weight gain, genetics, fitness levels and occupational risk factors determining the intensity and frequency.

The current treatment options for lower back pain include prescriptions for Nonsteroidal anti-inflammatory drugs (NSAIDS), Analgesic medications  such as OTC acetaminophen and aspirin, Anticonvulsants, Antidepressants and Topical analgesics.

Chronic Pain is the leading cause for seeking medical aid in the U.S.A study undertaken by the Centres for disease control and prevention (CDC) in conjunction with NIH and other entities titled “Morbidity and Mortality Weekly Report (MMWR)” in the year 2016, estimates that 20.4% percent of the adults population in the U.S suffered from chronic pain, while 8 percent had high-impact chronic pain limiting at least one important activity in their daily life. Untreated or undertreated chronic pain contributes to $560 billion each year in direct medical costs, lost productivity, and disability programs in the U.S alone.

The global analgesic market is poised to amass $26.4 billion by 2022, growing at a CAGR of 7.1% during 2015 – 2022, according to a report titled “Analgesics Market by Type (Non-opioids, Opioids) and Route of Administration (Oral, Intravenous, Rectal, Transdermal, Topical) – Global Opportunity Analysis and Industry Forecast, 2015 – 2022” published by alliedmarketresearch.

The Analgesic market is broadly divided into Opioid and Non-Opioid therapeutics. Opioid based medicine has given rise to an addiction endemic with prescription drug overdose becoming one of the leading causes of preventable deaths in the U.S in turn prompting the government to declare a public health emergency in 2017.

An increase in the geriatric population along with a rise in life-style related ailments and chronic diseases will drive the growth in the non-opioid market, along with a favourable government and regulatory environment, increased spending on research and development and fast track approvals for breakthroughs.

Nektar’s areas of focus are cancer, auto-immune disease and chronic pain, where the company seeks to make an impact with its novel Polymer chemistry platform. The company’s lead drug candidate for treatment of Lupus is an Anti-CD40L named Dapirolizumab Pegol which it is developing in partnerhip with Biogen (NASDAQ: BIIB) and UCB,Inc.

CD40L is a protein found in B and T cells that help regulate the immune system. Anti-CD40L has the ability to block CD40L and reduce the disease activity in those affected. It is currently undergoing Phase II clinical trials to test its efficacy and safety in patients with moderately to severely active systemic lupus erythematosus.

Image Source: Company

Nektar is the go-to company for clinical collaborations, co-development and licensing agreements with top-notch Biotechnology and pharmaceutical companies such as AstraZeneca (NYSE: AZN), Bristol-Myers Squibb (NYSE: BMY), Amgen (NASDAQ: AMGN), Shire, Halozyme (NASDAQ: HALO), Roche (OTCQX: RHHBY), Pfizer NYSE: PEE), Lilly (NYSE: LLY) and Takeda (NYSE: TAK) to name a few, which are leveraging the company’s propreitary platform to develop next-generation therapeutics.

In addition the company has a pipeline of over 10 new drug candidates such as NKTR-214 in combination with OPDIVO (nivolumab) for Melanoma, Renal Cell Carcinoma, Immuno-Oncology and Urothelial Cancer (in partnership with Bristol- Myers Squibb), PEGPH20 for pancreatic cancer ( in partnership with Halozyme), NKTR-214 in combination with TECENTRIQ (atezolizumab) or KEYTRUDA (pembrolizumab), NKTR-358 for Auto Immune disease (in partnership with Lilly), NKTR-262 in combination with NKTR-214, NKTR 214 in combination with TAK-659 ( in collaboration with Takeda) and NKTR-255 for haematological malignancies.

Image Source: Company

The company also has licensing agreement with AstraZeneca for Movantik in lieu of which it will receive escalating royalties on sales and milestone payments. It also has collaboration with Baxalta a subsidiary of Shire plc, for development of ADYNOVATE™ indicated for treatment of Hemophilia A in exchange for royalties and milestone payments.

Risk Assessment

  • Opioid Addiction is a growing epidemic which has reached an endemic proportion in the U.S. Prescription drug overdose is one of the leading causes of preventable deaths in the U.S, prompting the government to declare a public health emergency in 2017. There is stringent regulatory control and negative perception towards opioid based drugs, which makes it an extremely challenging environment for drug development for any company.
  • The Company has a diverse pipeline with candidates targeting the treatment of areas of high unmet medical needs such as oncology and autoimmune disease. Despite the rejection of oxycodegol (NKTR-181), it still has candidates such as NKTR 214, NKTR-358 and Bempegaldesleukin to look forward to.
  • The Company has built numerous strategic partnerships with valuable players such as Bristol – Myers Squibb, Biogen, Pfizer, Eli Lilly which are extremely valuable as they not only serve as a validation of its technology but also provides leverage against competition.
  • The Company is expecting savings to the tune of approximately $75-$125 million in 2020 due to the discontinuation of development of oxycodegol and related commercialization and post-approval studies costs. These funds could be better utilized for advancing other candidates in its pipeline.
  • Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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