My summary of Nektar's conf call

My summary of Nektar’s conference call. It was rather amazing (to me anyway). Here it is:

Our submission of an NDA for NKTR-181 will occur this month.

NKTR-214 is entering Phase 3 trials and
NKTR-262 is being evaluated in the recently initiated REVEAL study,
NKTR-358 is progressing with our immunology program

In immuno-oncology (IO), we remain focused on developing a full pipeline of new medicines that address the key components of the immune cycle, in order to restore immune surveillance and properly harness the body’s immune system to fight cancer.

Our new BMS collaboration provides a platform of us to develop our lead IO candidate NKTR-214 broadly and rapidly, with over 20 registrational trials in nine tumor types. We believe this will allow us to achieve our goal of establishing NKTR-214 as a backbone of cancer care across multiple indications.

In immunology, we have now advanced NKTR-358 into patients with the initiation of the Phase 1b multiple ascending dose trail being conducted in lupus patients.

Because of NKTR-181’s significant potential, and our current financial strength, our focus is no longer a near-term economics for NKTR-181, but rather to retain as much back-end value as possible. As such, we are evaluating several strategic structural alternatives for the commercialization of NKTR-181. (They had planned to mostly sell N-181 for cash, but they will now keep N-181 or partner it instead of selling it to raise cash, which they no longer need! )

We may establish a separate majority-owned subsidiary, with one or more partners to launch this important molecule. This is consistent with our desire to focus our resources on our immuno-oncology and immunology pipeline, while maximizing the value of N-181 for our shareholders.

Collaboration with Bristol Meyers: We have already begun planning the next steps in the joint development program with BM. The intent of this program is to advance this potential combination regimen in IO to as many patients as possible as quickly as possible.

Thus, we are planning to start our first Phase 3 trials for N-214 with Opdivo in the third quarter of this year. The first two trials will be in first line melanoma and first line renal cell carcinoma. In the second half of 2018, we’ll also design and launch our first registrational trials in lung cancer. We are highly focused on a multi-pronged approach for N-214 plus Opdivo in lung cancer, which envisions multiple registrational trials in different patient populations. Under the framework of this new collaboration, we are planning over 20 registrational enabling trials with BM, that will enroll about 15,000 patients in nine tumor types.

Collaboration with Takeda: We just initiated a new clinical collaboration with Takeda, which includes a Phase 1 study evaluating the combination of NKTR-214 with TAK-659 in patients with non-Hodgkin’s lymphoma. It will start in the second half of this year. We are extremely excited about the possibilities of evaluating N-214 for the first time in a liquid tumor setting.

Financial Status: After the signing of Bristol-Myers collaboration, we are in an exceptionally strong financial position, which allows us to execute on our vision for our portfolio in immuno-oncology. Our pipeline of IO candidates beyond N-214 includes N-262, a TLR-78 agonist and N-255, an IO-15 candidate, which can stimulate both NK cells and memory T-cells.

We ended the first quarter with cash of $334 million, but this did not include the payments from Bristol-Myers Squibb for the strategic collaboration that closed on April 3rd.
At the closing, we received $1.85 billion from BMS, comprised of a $1 billion upfront payment and an $850 million premium equity investment. We still expect to end the year with a cash position of approximately $1.9 billion to $1.925 billion.

Reveal Trial: In April, we dosed the first patient in the REVEAL trial, evaluating a combination of N-262 with N-214. The trial is enrolling up to 400 patients with eight different tumor types.

The first stage will assess the doublet of N-262 and N-214. Following that, the second stage will have the option to evaluate NKTR-262 and NKTR-214 plus Opdivo. We expect to have initial early data sometime in the fourth quarter of this year.

N-262 targets the innate immune system and N-214 targets the adopted immune system. This combination thus engages the same biological pathways that our immune system uses to fight infections.
Except in this case, we use the frequent injection of NKTR-262 into one or two tumor legions to educate the immune system. And NKTR-214 to expand and propagate the educated immune system response throughout the entire body to target all tumor lesions even one is not injected with NKTR-262. We call this an abscopal immune response and we routinely see this in preclinical tumor models using NKTR-262 and NKTR-214.

Propel Study: The PROPEL study is not a partnership and is fully run and sponsored by Nektar. We are enrolling patients who have bladder cancer or non-small cell lung cancer with N-214 plus atezolizumab and those patients are patients.

In addition we are combining N-214 plus pembrolizumab in patients who have melanoma, in patients who have non-small cell lung cancer, who have PD-L1 greater than 50%, or small cell lung cancer patients, or again bladder cancer patients. We are actively enrolling those patients. In the second half of this year we will have data to share.

Immunology: Now an update on N-358 in our Eli Lilly collabration. The initial data from our ongoing first-in-human Phase 1 trial of N-358 in healthy volunteers has shown dose-dependent increases in T regulatory cell levels with no increase in conventional T-cells or NK cells. This is comparable to what we saw in our non-human primate models and we are extremely pleased that this mechanism has now been confirmed in humans.

We have now dosed our first patient in the Phase 1b multiple ascending dose trial in patients with lupus. This continues to advance quickly and we expect initial data sometime in the second half of next year. We are very excited about the potential of N-358 as a resolution therapeutic (cure?) to bring a new paradigm to the treatment of autoimmune disease and chronic inflammatory indications.

As you know, Nektar is responsible for all activities up to the end of Phase 1 and then Lilly will take the lead from Phase 2 onwards.

Tying it up: In all cases, we believe to have a strong scientific rationale for the combination that is both specific to the individual combination partners and the tumor selection for the intended use of each combination.

My Conclusion (Saul) – In my end of the month summary I said that I wouldn’t add to my Nektar position any further, but after reading this amazing summary I couldn’t help myself, and went out and bought some more.

But that’s just what I did. You should make your own decision.




Ah, good. I was wondering what you were thinking. I stopped worrying after reading the conference call transcript.
Thank you as always.

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Because of NKTR-181’s significant potential, and our current financial strength, our focus is no longer a near-term economics…

I can see the traders interpreting that as near term pain. That might be the reason for the sell off. My guess is the back 2 quarters this year, we’ll barely remember it.


I am in the pain management industry, but more from an injection perspective. I have seen firsthand the personal emotional and physical devastation that results from opioid use and dependence. The FDA has recognized this fact and severely tightened the availability and prescribability of opioid analgesics. Then along comes NKTR-181 which now achieves a similar pain relief profile, but with less euphoria and probably addictiveness……

I believe this is why the FDA has fast tracked its approval, to get this to market ASAP as another tool in an effort to further blunt the opioid crisis, but simultaneously to provide the level of analgesia afforded by opioids that is unmatched by any other drug class. The TAM for opioids is massive, with far more patients affected by pain than cancer (and many with both), but balanced by what is likely to be a lower reimbursement profile for NKTR-181 compared to NKTRs oncologic offerings (the cancer drugs are always much more expensive).

While I maintain my NKTR investment because I believe they are a leader in developing small molecule therapies to modulate the immune system’s response to malignancy (and as a molecular biologist I see their pegylated IL-2 to be potentially applicable and adjunctive to a majority of cancer chemotherapies), I remain excited that NKTR-181 will be materially accretive to their business and thus to their share price. When I read that NKTR is no longer focused on near term economics of NKTR-181, I read between the lines that they know something more clearly, that this drug has a big runway that they are not going to sell off.



This story is repeated time and time again across the biotechs. It’s a gamble at best. Your investment allocation should be limited to what you would spend on a lottery ticket.



Agree this is the story of modern biotech and that biotechs are usually just gambles. The intersection of science and patient care is woefully complex and more often unpredictable. However, all good gamblers know to weigh the odds in their favor as much as possible.

The one thing that intrigues me about NKTR is that they are not really inventing new drugs. They are not screening indescriminate compounds or reverse designing molecules. Instead, they are basically repacking known and studied biologically active molecules. NKTR-181 is a PEGylated opioid. PEGylation is a process where small polyethylene glycol molecules are bound to another molecule. This changes its surface molecular structure and thus its biological activity. In the case of NKTR-181, this decreases its ability to cross the blood brain barrier, but preserves its opioid effects in the remainder of the body. The underlying opioid class of drugs has been around and studied for decades, its side effects and pharmacokinetics are well known. Likewise, NKTR-214 is PEGylated IL-2 (interleukin 2). IL-2 has been known for decades and its antitumor properties well studied. However, the native molecule is just too toxic and too short lived for effective therapy. PEGylated IL-2 has removed the systemic toxicity and increased the half-life of the molecule. The patient gets a drug bolus and as the PEG groups slowly spontaneously fall off the IL-2 molecule, that provides a sustained low level of native IL-2 that is not toxic and fully active, revving up the body’s natural killer cells against tumors.

Thus, I think of NKTR as a drug delivery company, redesigning and modifying existing and known drugs and biologic agents, to provide better and safer pharmacokinetics and efficacy.


With respect to gambling, I am more comfortable with a biotech company not having to reinvent the wheel, but rather just expanding applications for the wheel already invented. Yes, still a gamble, much as any company, but perhaps with an understanding that tilts the odds.

Two cents…



I think of NKTR as a drug delivery company

You hit the nail on the head, Jack. Probably one of the reasons I missed the boat prior to its November run-up. I have always viewed it in the same basket as LGNDs captisol delvery and HALOs enzymatic delivery platform. I am pretty confident that 30-some years ago they were a ethylene glycol chemistry company somewhere in AL with no biology expertise at all.

You have to give them credit for reinventing themselves.


When I read that NKTR is no longer focused on near term economics of NKTR-181, I read between the lines that they know something more clearly, that this drug has a big runway that they are not going to sell off.

That’s exactly what they said actually:

Because of NKTR-181’s significant potential, and our current financial strength, our focus is no longer a near-term economics for NKTR-181, but rather to retain as much back-end value as possible.

That’s exactly what I would want them to do.



for all the excitement over a new less addicting painkiller, I have heard this lots of times before, when it did no turn out to be true. Apparently drug studies concentrate on people who want pain relief but in the real world many people want them for different reasons. An addict is not likely to sign up for a double blind study, or stay in it if there is less “kick” to the drug he gets…

No position in Nektar, nothing specific, I no longer buy any biotech or drug socks.


I read the shift in their plans for 181 more to be simply that the Bristol Meyers partnership gave them more than enough money to finish developing 214 and 262 to commercial viability. Seemed before the huge cash infusion from BMY that the plan for 181 was simply to sell it off or license it to get some cash to finish developing their I-O drugs.

There could be some of both though: that they don’t need an intermediate-term cash infusion from 181 AND that they now view the 181 market as having more potential than they might have before. Third slightly different take might just be that the level of cash from the BMY partnership will now allow them to handle all development and marketing both for 181 and for their I-O portfolio.

Cash just gives so much more optionality…almost makes me regret selling a smidgen of Shopify at about 137 when they had their Feb. 2018 secondary…except that gave me cash for my portfolio and flexibility.


RoyGeeBiv wrote" This story is repeated time and time again across the biotechs. It’s a gamble at best. Your investment allocation should be limited to what you would spend on a lottery ticket."


Roy, I became very interested in this stock in late September of last year after reading about the way clinical trials were going for 181. At the time I did not fully understand the impact of 214 and other molecules. The ability of 181 to impact opioid abuse and the fact that the FDA fast tract it made it seem like reasonable investment to me. Not a gamble. It is my recollection that Chris and I posted about this company about the same time in November.

The many excellent contributors on this board and NPI explored the possibilities of 214, 181 and the pipeline. When one enters into an investment with good information and relentlessly pursues the evolving story of a company and their prospects it is not a gamble.

I entered with a full position for me in early November ( cost basis of about $28) - I used the money from my sale of Kite. When it reached my target price of $88 I sold enough to recoup my original investment. Sold some more in the low $100’s to fund more Square. Still have a sizable stake.

I agree if you just go on tips and do not use the best resources you can then biotech is very risky.

So far in the past 12 months I have invested in three biotech’s: JUNO, KITE and NKTR. Gains of 150%, 300% and approx. 300%. The NKTR 300% was on top of the KITE gain.

I do not consider myself a gambler rather a very blessed investor.

I am not considering selling more until after the catalyst of 181 approval (if it happens) and phase II results on 214. I envision a stake for quite some time unless a significantly better opportunity comes along.