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Here's Why Nektar Therapeutics Is Soaring Today

By Maxx Chatsko – Updated Jun 3, 2019 at 12:10PM

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Promising data suggest the company might be able to raise the bar in melanoma treatments.

What happened

Shares of Nektar Therapeutics (NKTR 5.58%) rose more than 13% today after it announced an update for one of its most promising clinical programs at the 2019 American Society of Clinical Oncology (ASCO) meeting. A combination therapy comprising NKTR-214 and Opdivo from Bristol-Myers Squibb (BMY -0.25%) demonstrated a complete response (CR) rate of 34% for individuals with Stage IV melanoma. 

That's up markedly from a CR rate of just 11% at ASCO last year. It also puts the combination therapy on pace to set the standard in melanoma treatments. Opdivo alone demonstrated a CR rate of 18% in a four-year study, while a combination therapy comprising Opdivo and Yervoy, both from Bristol-Myers Squibb, achieved a CR rate of 21% in the same setting. It's still very early, but analysts are excited about the potential, especially now that Nektar Therapeutics is more focused on immunotherapy

As of 11:45 a.m. EDT, the stock had settled to a 12.5% gain.

A businessman striking a pose pointing up.

Image source: Getty Images.

So what

The updated data are from a small, single-arm phase 2 trial involving just 38 patients. Of the total patient population, 53% achieved an objective response (read: any response to treatment), 42% achieved a 100% reduction in target lesions, and 34% achieved a CR. Eighty percent of patients who saw an objective response had continuing responses at the 12.7-month median follow-up date. The data were too immature to calculate median progression-free survival.

Now what

Simply put, the data reported to date are promising, given the lack of robust treatment options for late-stage melanoma. But analysts and investors will be watching for the response rates to hold up during a planned phase 3 trial seeking to enroll more than 700 patients. Nektar Therapeutics and Bristol-Myers Squibb are cautiously optimistic, but there might be just as much room for caution as optimism at this stage.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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