Nektar Therapeutics surges on cancer treatment deal with Bristol-Myers

Nektar Therapeutics

One of the biggest winners on Friday’s markets was a relatively small biotech stock. Nektar Therapeutics (NASDAQ: NKTR) surged by almost 25% after it signed a major cancer treatment deal with a well know healthcare giant, Bristol-Myers (NASDAQ: BMY).

While its common for small-cap biotech stocks to partner with bigger companies to help develop new drug candidates, Nektar is actually closer to a mid-cap with a $5 billion market cap, which makes it that much more surprising when it surged so much on the news.

The news sent shares of Nektar surging to a new six-month high. The two companies will be working to test a number of drugs in treating five separate types of cancer. Previously, Nektar had an agreement with Bristol to just test for three types of cancer, so investors and analysts are right to consider this announcement a vote of confidence from the healthcare giant towards Nektar.

“We are pleased to move forward with this new set of registrational trials for bempeg, including the addition of an important Phase 3 study in adjuvant melanoma which builds on the existing metastatic melanoma study and our Breakthrough Therapy Designation,” said Nektar’s CEO Howard Robin. “We now have a comprehensive plan to target multiple indications and have the opportunity to continue to collaborate on development with other companies in indications outside of those in the BMS and Nektar joint development program.”

Previously, Bristol-Myers and Nektar had agreed to test each of their respective drugs, Opdivo and bempegaldesleuikin, in treating patients with kidney cancer, bladder cancer, and melanoma. However, this new agreement would add a third drug to the mix, Axitinib, to see how these three-drugs respond in patients.

Nektar has 16 drug candidates that are either in early-stage clinical testing, late-stage, or have already filed for a New Drug Application from the Food and Drug Administration. The company also has partnerships with other major pharmaceutical giants such as Pfizer, Eli Lilly, and Biogen. Nektar’s top drug candidate, a chronic lower back pain drug NKTR-181, is developed entirely by itself and has already been submitted for regulatory approval.

Shares of Nektar Therapeutics shot up by as much as 25% on Friday in response to the news. Out of the 14 or so Wall Street analysts covering the stock, there’s an almost even split between those neutral on the company and those optimistic about the firm’s chances. Eight analysts according to the Wall Street Journal have a “neutral” rating on Nektar, while just 6 have a “buy” rating. Time will tell how the company ends up faring, but at the moment, prospects for Nektar Therapeutics seem pretty good going into this year.

Nektar Therapeutics Company Profile

Nektar Therapeutics is a San Francisco-based emerging biotechnology company specializing in PEGylation technology. Its portfolio includes PEGylated biologics in immuno-oncology, chronic pain, hemophilia, breast cancer, and autoimmune disease. The company partners with several large pharmaceutical and biotechnology companies to co-develop therapies in a range of indications, which includes a collaboration with Bristol-Myers Squibb to develop bempegaldesleukin, the firm’s leading immuno-oncology candidate, in combination with Bristol’s Opdivo. – Warrior Trading News