In another example of the white-knuckle here-we-go nature of the drug business, Bristol-Myers Squibb announced this morning that they’re doing a huge deal with Nektar Therapeutics for their immune stimulant drug candidate, NKTR-214. Well, actually, they’re not getting the drug, because the development deal is non-exclusive. And they’re not buying Nektar outright, although there had been plenty of rumors about them doing just that. Instead, they’re paying a billion up front and buying $850 million of Nektar stock (at about a 36% premium) for the chance to try out NKTR-214 along with their existing immunotherapy drugs, Yervoy and Opdivo (nivolumab). There are nearly two billion dollars in milestone payments that could trigger if things work out, and the revenues for the drug will still go mostly to Nektar.
That, as the article linked says, is a steep price (quite possibly the steepest in the history of the industry for a deal like this) and a big gamble. NKTR-124 is an agonist of the CD122 protein (IL2RB), which stimulates proliferation of T-cells and NK cells. That makes it a perfectly rational thing to add to existing treatments, but this isn’t always a rational business (or at least it isn’t until we have lots of expensive hindsight). Nektar got a lot of attention back in the summer when they presented data on the combination of their compound along with Opdivo. The results did look impressive, but they were also on a literal handful of patients. Then in November, more data came out in slightly larger trials, which also looked very promising. Bristol-Myers Squibb is planning to expand that to perhaps twenty indications, in what looks to be a very large and expensive clinical effort.
But you know, Takeda had already signed a rather similar deal with Nektar back in May, before things got so expensive. To stop Nektar from turning around and signing another one with Merck (BMY’s bitter rival in the immuno-oncology field) this agreement has a lockout provision, but those don’t last forever. The hope is that the combination will allow the immunotherapy to work even in patients who are not expressing the PD-L1 protein, which would significantly expand the market (and make prescribing these antibodies a significantly easier decision). One of the significant points about the November data was a response seen in 3 out of 4 non-small-cell lung cancer patients (stage IV) who did not express PD-L1.
So this could be very good news – or it could be that in longer, larger trials the benefits aren’t so clear. NKTR-214 is new enough that we really don’t have outcomes data yet – seeing responses in patients like this is a good thing, and you’d hope that that translates to overall survival, but there’s really only one way to find out, and that’s to run the trials and see how people survive. Bristol-Myers Squibb is paying a lot of money just to get to trying that part out. It looks like that’s the price to try to differentiate yourself from an incredibly competitive and increasingly crowded field. There’s a lot of breath being held in this area these days. . .