On Dec. 3, 2013, I wrote an article dealing with Nektar Therapeutics (NKTR). A link for that article is here. In the interim the stock has moved up by about 10%, and on Jan. 14, CEO Howard Robin made a presentation at the 32nd annual JPMorgan Healthcare conference in San Francisco. As an update to my earlier article, the following are the key takeaways from the JPMorgan conference. This conference is considered one of the more important events where healthcare companies have a wide exposure to key individuals who follow the industry. This link outlines the pertinent information.
Naloxegol, the partnered drug with AstraZeneca (AZN) for opioid-induced constipation (OIC), has been accepted by the FDA and now has an assigned U.S. PDUFA date of Sept. 16, 2014. Both companies will participate in the FDA advisory panel meeting scheduled for March 10 and 11.This meeting is being held to discuss safety issue with drugs that have been submitted for FDA approval. They will have extensive data that covers 52 weeks of randomized safety studies involving 534 patients treated with Naloxegol and 270 patients on usual care. What this panel is concerned with is adverse events dealing with cardiovascular events that they have seen in other drugs pending final review. In the case of Naloxegol, there were no imbalance and serious adverse events, including cardiovascular events. This is a key issue for Naloxegol getting FDA approval and labeling issues that "might" be the case for other drugs that could get approval in the current time frame of final reviews by the FDA.
Naloxegol has been moved to the Anesthetic/Analgesic committee for review. This decision was made by the FDA and not by the companies. It is my opinion that this was a good decision by the FDA due to the mode of action offered by Naloxegol. The drug works by blocking the action of opioids on the mu-opioid receptors. It makes sense that the analgesic professionals will understand that opioid therapy and its side effects are issues that a drug like Naloxegol will address for those patients suffering pain and the ensuing constipation related to their taking an opioid.
It is my understanding that though the review committee for the advisory panel is new, the actual NDA will remain in the GI division where it was filed. It is my opinion that this movement (no pun intended) gives Naloxegol a better position going into the final approval process, when it has been (hopefully) recommended by professionals who best understand the issues for those patients needing new options. Approval of Naloxegol will be a pivotal point in the history of Nektar. On a worldwide basis, the use of opioids for pain is huge, and this results in about 69 million who will suffer from constipation. Nektar will receive several milestone payments from AstraZeneca, and then escalating double-digit royalties. Efficacy data and the lack of major adverse events for Naloxegol places this drug in an excellent position as we await the FDA panel meeting in March and the PDUFA meeting in September.
The next major piece of news coming out in the JPMorgan conference was the announcement that an Independent Data Monitoring Committee (IDMC) had reviewed the interim efficacy data for (NKTR-102), Nektar's drug for treating patients with metastatic breast cancer. After the (IDMC) had reviewed data based on 50% of the events necessary to achieve the primary endpoint of survival, they recommended that the trial be continued. This is very important and one only has to note that recently several drugs trials have been stopped for ineffective efficacy and adverse event issues.
There is no firm rule as for the time that is involved in getting patients into a respective drug trial. It was important that Nektar was able to enroll their trail very expeditiously and now has clearance to proceed based on a critical milestone of interim review of both efficacy and safety issues. With this event it will give Nektar a firmer position in negotiating a partnership with NKTR-102.
One of the key factors for investing in smaller biotechs is the hard reality that the larger drug companies have to resort more and more to either buying or partnering with smaller biotechs that have viable candidates for approval. I'm not suggesting that Nektar will be taken over by a larger firm. A major catalyst for them is their ability to add value to other drug companies where their "blockbuster drugs" are coming off-patent. Enhancing proven drugs like the partnership with Baxter's hemophilia drug Advate and now their internal development drugs that are fully controlled by Nektar, in my opinion places them in a unique and enviable position in the drug industry.
The next point that came out of the JPMorgan conference was the outline and plan for moving NKTR-181 into Phase III testing. It appears that they have had extensive discussions with the FDA and key experts in the field of pain management. This interaction has given what I think is a clear outline for addressing the lack of rebound in the placebo arm in the just completed Phase II trial. It was clear from this earlier trial the efficacy for NKTR-181 was a strong positive for the drug, but the allowances and protocol for the placebo arm wasn't the best avenue for getting clear and unbiased data for those suffering with pain. The mere fact that in the upcoming trial they will eliminate any background drugs that a patient might be taking is critical.
However, with the size of this trial, I think the fact that Nektar will have the ability to see an interim futility analysis based on 200 patients is smart. In my opinion, good decisions have been made with NKTR-181. Having the ability to participate in this growing market for addressing pain without the issue of opioid abuse would be a nice victory for Nektar's drug development program.
For the first time in their presentations they included the fact that they have partnership deals with Regado Biosciences (RGDO) and OphthoTech (OPHT). Previously they have not been discussed due to both being private companies. This issue changed when both issued IPOs in 2013 and are now publicly traded stocks. Each of these companies has a product in Phase III testing, and each addresses a major market in drug therapies.
The last bit of good news from the conference was the announcement that Nektar has moved NKTR-171 into clinical trials. This drug is a sodium channel blocker and designed to eliminate the major issues with such drugs. The main issues being severe sedation and CNS side effects. This market is about $5 billion and if NKTR-171 is found to be the solution for these aforementioned adverse events, this would be a huge win for Nektar. The CEO indicated that data from this Phase I trial should be available later this year.
The CEO announced that they were stopping the Phase I trial for NKTR-192. This was another drug addressing the pain market; however, even though the trial data showed some positive efficacy benefits, they also noted there were some elevated liver enzymes shown in some of the trial patients. Based on this, they are moving the drug back into clinical trials. This was a wise decision as the FDA doesn't look very positively on drugs showing liver issues.
Nektar ended 2013 with $262 million in cash on hand. The important events in the near term and for all of 2014 are as follows:
- FDA panel meeting in March for Levadex, the migraine drug with Allergan, has the FDA decision coming by mid-year
- Naloxegol PDUFA date in the United States and EU approval
- Baxter's NDA filing for BAX 855 for their hemophilia drug
- NKTR-171 Phase I data by year-end.
On Saturday, Jan. 18, Nektar released data on the extension of NKTR-102 for additional cancer indications. This data is based on a Phase I trial and involves only a few patients. However, this initial data bodes well for expanding the Nektar drug for other, harder to treat cancers and for those patients who have failed previous treatment drugs.
On Tuesday, Jan. 21, Nektar announced they would be issuing secondary stock in the amount of 8,500,000 shares, with an over allotment for an additional 1,275,000 shares. JPMorgan and Jefferies will be handling this offering. As expected, this has caused the stock to retreat from the previous day's closing price. However, these funds will give Nektar monies for the expanding and ongoing FDA trials for their drug candidates. In the short term, this is always a drag on the stock price. However, if one believes in the science behind this company, then one's investment should be based on the long-term for holding shares in the company. I took the opportunity by adding to my holdings.