What happened

Shares of Nektar Therapeutics (NASDAQ:NKTR) 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 (NYSE:BMY) 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.

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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.

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