Shares of Nektar Therapeutics (NASDAQ:NKTR) dropped nearly 11% today after the company reported that the U.S. Food and Drug Administration (FDA) was delaying a previously scheduled advisory committee meeting for NKTR-181. The development was quietly reported in an 8-K filed with the U.S. Securities and Exchange Committee and didn't have an accompanying press release, which may have made the news easy to miss and the drop appear to have come out of nowhere.
That said, the decision to delay the advisory committee meeting had nothing to do with Nektar Therapeutics or any factor unique to NKTR-181. Rather, the FDA is postponing all such meetings for drug candidates that are opioid analgesics as it reevaluates how it deals with opioid drugs.
As of 3:13 p.m. EDT, the stock had settled to a 7.3% loss.
An advisory committee meeting allows experts from across the scientific community to help regulators weigh the pros and cons of an experimental drug that's up for review. It's one of the last regulatory meetings that takes place before a drug candidate earns (or is denied) marketing approval from the FDA. Case in point: The advisory committee meeting for NKTR-181 was scheduled on August 21 -- just eight days before regulators were due to make their final decision on the drug.
Those dates have now been pushed back indefinitely. While that's not ideal, investors can't be too surprised, given the ongoing opioid crisis and recent reports detailing the awful and complicated reality of the whole mess.
To be fair, NKTR-181 was designed to selectively target opioid receptors in the nervous system. That allows the drug candidate to provide pain relief without causing euphoria, which the company says should reduce the potential for abuse and addiction. Whether or not the drug candidate gets swept up in new FDA guidelines for opioids -- if regulators create new guidelines at all -- can't be known at this time.
Despite the nuance required to accurately assess today's development, investors are more concerned with how the delay will impact a reeling pipeline at Nektar Therapeutics. The company has already struggled to communicate its new strategy to investors and show tangible signs of progress with its latest pivot. Pushing back the possible market launch of NKTR-181 doesn't help one bit.