What happened
Shares of Nektar Therapeutics (NKTR -5.99%) rose nearly 20% today after the company announced a new development plan with Bristol-Myers Squibb (BMY 0.48%).
The collaboration will advance bempegaldesleukin (bempeg) from Nektar Therapeutics and Opdivo from Bristol-Myers Squibb in multiple new registrational trials. The combination therapy is already being investigated in first-line metastatic melanoma, first-line cisplatin-ineligible metastatic urothelial cancer, and first-line metastatic renal cell carcinoma (RCC).
As of 11:50 a.m. EST on Friday, the pharma stock had settled to a 17.8% gain.
Image source: Getty Images.
So what
The new development agreement represents a significant expansion from current efforts. The duo will advance the combination therapy in two registrational trials in adjuvant melanoma and muscle-invasive bladder cancer. Nektar and Bristol-Myers will also initiate phase 1/2 dose escalation studies in first-line RCC. The collaborators will split all costs.
Additionally, Bristol-Myers will fund a phase 1/2 dose optimization study exploring the combination therapy's potential in first-line non-small-cell lung cancer (NSCLC).
Nektar will be eligible to receive up to $125 million total once the first patients are dosed in the adjuvant melanoma trial ($25 million), muscle-invasive bladder cancer trial ($25 million), and NSCLC trial ($75 million).
Now what
The near-term milestone payments won't move the needle for Nektar Therapeutics, which ended September with $81 million in cash and $1.4 billion in short-term investments. But the new development agreement clearly shows that Bristol-Myers Squibb sees value in bempeg. Now investors will need to await the initial results from clinical trials.
