Shares of Nektar Therapeutics NKTR have been up almost 306% this year so far, substantially outperforming the industry’s increase of 3.9% during the period. Let’s analyze the factors that led to this massive rally.
Nektar’s rapid progress on a robust pipeline this year including several study initiations and strategic collaborations, has pushed up its share price consistently.
The company’s PEGylation technology has facilitated development of its several approved products in the United States and the EU through partnerships with healthcare companies namely, AstraZeneca's AZN Movantik, UCB's Cimzia and Amgen's AMGN Neulasta, among others.
Notably, a randomized phase III confirmatory study (ATTAIN) began on the company’s lead candidate, Onzeald, late last year. The trial compares Onzeald with a single-agent chemotherapy of physician’s choice in the patients with advanced breast cancer, having brain metastases shortly. Positive results from the program could support a regulatory filing in the United States.
Apart from Onzeald, Nektar is working on developing other candidates. In September, the company announced initiation of phase I/II PROPEL study to evaluate the efficacy and safety of NKTR-214 in combination with Roche's Tecentriq (atezolizumab) and Merck's MRK Keytruda (pembrolizumab).
A phase I/II study, evaluating NKTR-214 as a potential combination treatment regimen with Bristol-Myers Squibb’s Opdivo, is also underway. The candidate is being examined across five tumor types (melanoma, kidney, colorectal, bladder and non-small cell lung cancer) and eight potential indications.
Notably in May, the company entered into a research collaboration with Takeda Pharmaceuticals to explore the combination of NKTR-214 with five oncology compounds from Takeda’s cancer portfolio.
Another candidate, NKTR-181, is being examined in a phase III study for treatment of chronic pain. In July, the company reported positive top-line results from an oral human abuse potential (HAP) study, evaluating NKTR-181, to assess the opioid abuse potential compared with oxycodone. The company is planning to submit a new drug application (NDA) for the candidate by April 2018.
Meanwhile, in March, the company initiated a phase I clinical study, evaluating NKTR-358, to treat a wide range of auto-immune diseases and inflammatory disorders.
Subsequently, in July, Nektar entered into a co-development deal with Elly Lilly and Company for NKTR-358. Pursuant to the agreement, the company will be responsible for completing the ongoing phase I study on the candidate. Both companies will share phase II development costs with Lilly capturing the lion share (75%) of the total costs.
Successful development and commercialization of these candidates will boost the company’s top line, considering the lucrative markets they are targeting.
Nektar carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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