Nektar Therapeutics (NKTR -3.43%) stock surged by more than 20% in the week to Friday morning. The move wasn't so much caused by anything specific to Nektar's drug development program. Instead, investors bought into the stock because of the disappointing phase 3 results reported by another drug company, Sanofi.
What happened this week
Nektar's lead drug is rezpegaldesleukin, a treatment for skin conditions alopecia areata and atopic dermatitis. The company is making promising progress with the drug and received a fast track designation from the U.S. Food and Drug Administration (FDA) for it in the treatment of atopic dermatitis in February. That good news was followed by another FDA fast track designation for it in severe to very severe alopecia areata at the end of July.
However, as is often the case in the pharmaceutical industry, other companies are developing rival programs, one of which is Sanofi's amlitelimab for atopic dermatitis. It's not that amlitelimab failed to meet its primary and secondary endpoints, but rather that the efficacy data wasn't strong enough when compared to that of Sanofi's existing treatment for the same condition, Dupixent -- a drug that goes off patent in 2031.
What's next for Nektar Therapeutics
The disappointing results from Sanofi appear to clear the way for Nektar's rezpegaldesleukin to become a potentially commercially viable treatment.
Image source: Getty Images.
That said, Nektar hasn't released phase 2 top-line data for rezpegaldesleukin in alopecia areata yet -- it's due at the end of the year -- let alone initiated phase 3 in either atopic dermatitis or alopecia areata. There's still a long way to go, and this week's news reveals nothing about the efficacy or commercial viability of Nektar's lead program beyond the fact that a potential competitor's position is weaker. Given all that, the move may be an overreaction.
