Biotech stocks were making headlines once again as we started the week. Fresh fears about a potential coronavirus variant are slowly returning, with one Chinese area going back into lockdowns once again. While your usual coterie of vaccine stocks were up on the news, Monday’s worst-performing stock also happened to be a biotech firm, although shares were plunging for a different reason.
Nektar Therapeutics (NASDAQ: NKTR) was down on heavy trading yesterday as traders reacted to dismal clinical results. The company’s lead candidate, a cancer drug called bempegaldesleukin, flopped in a crucial late-stage melanoma trial. The treatment failed both of its main endpoints in terms of progression-free survival and objective response rate. This was the case even when used in combination with another promising cancer drug, Bristol Myers’ (NYSE: BMY) Opdivo.
The trial involved 783 patients who either received Opdivo alone or Opdivo alongside Nektar’s drug candidate once every three weeks via injection. It turned out there was no statistically significant benefit to taking the combo treatment as opposed to Opdivo alone.
The drug is still undergoing two more cancer trials, including ones for kidney and bladder cancer. However, many experts felt the melanoma trial had the best chances for success. With this trial now clearly a failure, many have given up on the possibility of these other trials staging a comeback.
Wall Street was quick to downgrade Nektar on the news. This includes Bank of America, who downgraded the biotech from a neutral rating to an “underperform” with a share price of just $6. Stifel analyst Benjamin Burnet issued a similar downgrade, admitting he was wrong to expect a positive result from the trial.
“We were wrong to forecast success in the pivotal study…this result introduces significant risk to other bempeg development program,” said Burnet following the news.
It was bad news for Bristol Myers as well. The pharmaceutical giant is currently involved in several other cancer trials. This included another separate melanoma trial, which Bristol Myers ended up discontinuing due to these poor results with Nektar Therapeutics.
The news becomes an even bitter pill to swallow when a competing cancer drug, Merck’s (NYSE: MRK) Keytruda, actually saw a significant improvement in patients with melanoma. Recent results from a phase 3 trial met its primary endpoints, further separating Merck’s cancer breakthrough from Bristol Myers’.
Shares of Nektar Therapeutics were down over 60.9% over the course of Monday. Bristol Myers wasn’t really down much on the news, given that it’s a much larger biotech company than Nektar.
Other biotech stocks on the move included Moderna (NASDAQ: MRNA) and BioNTech (NASDAQ: BNTX). Both were up around 15.3% and 12.5% after rumors of a new coronavirus variant, deltacron, appeared in China. Tens of millions of people across the country are now facing restrictions once again, including the Jilin province and the Shenzhen tech hub.
Nektar Therapeutics Company Profile
Nektar Therapeutics is a biopharmaceutical company. It has wholly-owned research and development pipeline of investigational medicines in oncology, immunology, and virology as well as a portfolio of approved partnered medicines. The company has additional operations facilities in Huntsville, Alabama, and Hyderabad, India. – Warrior Trading News
