What happened
Shares of Nektar Therapeutics (NKTR -4.35%), a biopharmaceutical company developing new cancer drugs, are getting crushed today after the company reported a disappointing clinical trial failure. The stock was down 56% as of 11:28 a.m. ET on Monday.
So what
Nektar has several commercial-stage drugs, but the revenue they generate isn't nearly enough to allow this company to make ends meet. The biotech lost a stunning $446 million in 2021.
A clinical trial failure for its lead candidate, bempegaldesleukin (or bempeg), was a big disappointment today because it's the only new drug candidate the company has in late-stage clinical trials. In 2018, Bristol Myers Squibb (BMY -8.51%) paid dearly to partner with Nektar because bempegaldesleukin appeared to improve the efficacy of Bristol's lead cancer therapy, Opdivo.
Image source: Getty Images.
Bristol Myers Squibb's investment already looked like a mistake back in 2018 when response rates among cancer patients treated with Opdivo plus bempeg started declining. Today, the mistake was further confirmed by top-line results from the Pivot trial. Adding bempeg to Opdivo didn't reduce melanoma patients' risk of disease progression or death compared to Opdivo on its own.
Now what
During the three-year period ended Dec. 31, 2021, Nektar poured more than $1.2 billion into research and development. Sadly, the company doesn't have a lot to show for it.
The next most-advanced new drug candidate in Nektar's pipeline is called NKTR-358 and it's still in phase 2 trials. It's similar to bempeg, but is being tested as a treatment for autoimmune disorders. In the last half of 2022, Nektar is expected to wrap up a phase 2 trial with lupus patients and NKTR-358.
The company could have better luck with autoimmune disorders than it's had with cancer, but this isn't a risk worth taking for individual biotech investors. It's probably best to let this falling knife hit the ground.
