What happened

Shares of Nektar Therapeutics (NASDAQ:NKTR) rose more than 13% last month, according to data provided by S&P Global Market Intelligence. The company announced promising results at the American Society of Clinical Oncology (ASCO) annual meeting for a combination therapy involving NKTR-214 and Opdivo from Bristol-Myers Squibb in advanced melanoma.

At the 12.7-month median follow-up, the combination achieved an objective response rate (a reduction in tumor size) of 53% and a complete response rate (no detectable signs of disease) of 34%. That means 13 of the 20 patients who saw an objective response achieved a complete response. The data were from a phase 2 clinical trial, and the phase 3 clinical trial for the combination therapy is now recruiting patients. 

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So what

The numbers from the midstage trial are impressive. Opdivo alone triggered a complete response in 18% of patients in a four-year study. Meanwhile, a combination of Opdivo and Yervoy achieved a complete response in 21% of patients. 

The NKTR-214 and Opdivo combination has only been evaluated for about one year, but analysts are optimistic it can keep up the promising responses, especially considering the complete response has improved over time and that 80% of patients who responded to treatment maintained that response at the 12.7-month milestone. 

Now what

Nektar is now valued at $6 billion, a far cry from the nearly $18 billion market cap it sported in early 2018. The company has lost $2 billion, or 25%, of its market valuation since its February peak. Will a promising showing at ASCO help to turn things around? It certainly can't hurt. NKTR-214 is being evaluated in two late-stage trials, two midstage trials, and three early stage trials -- mostly in combination with other drugs. That makes it the company's most important asset, which means ongoing success could solidify Nektar's future.