Nektar links up with big partner

Bristol-Myers, S.F. firm team on cancer drug

Global pharmaceutical company Bristol-Myers Squibb will pay San Francisco’s Nektar $1.85 billion to jointly develop Nektar’s experimental cancer drug for tumors, the companies announced Wednesday. Both companies will share in the profits.

As part of the deal, BristolMyers Squibb will pay Nektar $1 billion in cash and buy $850 million — about 8.3 million shares, or 5 percent — of Nektar stock. The transaction is expected to close by June.

The transaction is one of the largest up-front payments for an oncology product in the pharmaceutical industry.

Nektar is also eligible to receive an additional $1.78 billion in payments if it meets development, regulatory and sales milestones.

Nektar’s drug, called NKTR-214, is administered by infusion and stimulates the immune system to attack cancerous tumor cells. It has been tested on a number of solid

cancers including melanoma, kidney, bladder, a common type of lung cancer called non-smallcell lung cancer, and triple negative breast cancer — a type of breast cancer that does not typically respond to common treatments. The drug is in the phase 2 clinical trial stage.

The two companies will split the profits from NKTR-214, with Nektar receiving 65 percent and Bristol-Myers Squibb receiving 35 percent.

In clinical testing, NKTR-214 was administered in combination with Opdivo, another cancer drug made by Bristol-Myers Squibb. Taken together, the therapy marks a significant step forward in the treatment of cancerous tumors because it has been shown to work on a subset of patients whose tumors are classified as PD-L1 negative and hence do not typically respond well to immunotherapy. “The ability to treat many more patients is powerful, NKTR-214 allows that possibility,” said Steve Doberstein, senior vice president for research and development at Nektar. “That’s remarkably valuable from a medical standpoint and from a commercial standpoint.”

Nektar, which was founded in 1990 and went public in 1994, was the best-performing stock in the Bay Area in 2017, according to a Bloomberg index that tracks Bay Area companies.

Shares soared 387 percent following positive results from clinical trials of NKTR-214 and NKTR-181, another drug in Nektar’s pipeline that treats chronic pain and is less addictive than traditional opioids.