Nektar Therapeutics: Often Forgotten, But Worth A Look

Stephen Simpson
20.42K Followers

A few weeks into 2012, it looks like investors are much more eager to take on some risk in their portfolios and biotechs are coming back into favor. With that in mind, it makes sense to check out some of the promising biotechs that languished a bit in 2011. Although Nektar Therapeutics (NASDAQ: NKTR) hasn't had much bad news in a while, in the world of biotech "no news" can be almost just as bad and it seems that the market has perhaps forgotten this name a bit.

Changing Course

Nektar has long been in the business of partnering with larger pharmaceutical companies and licensing its proprietary PEGylation technology. PEGylation basically introduces polyethylene glycol into a compound and alters its performance in the body - most notably by slowing the process of clearing in from the body. Companies including Amgen (NASDAQ: AMGN), Pfizer (NYSE: PFE), and Merck (NYSE: MRK) have licensed this technology for major drugs like Neulasta and PEG-INTRON, but Nektar gets only relatively small royalties for this technology.

Realizing the limits of how far technology licenses can take the company, management has been working on a pipeline for proprietary products for several years now and two of them - NKTR-102 and NKTR-181 are particularly worth noticing.

Two Interesting Proprietary (For Now) Programs

NKTR-102 is a modified version of irinotecan - a cancer drug that Pfizer marketed as Camptosar (in the unmodified form). A toposomerase 1 inhibitor-polymer conjugate, NKTR-102 has shown encouraging signs of efficacy in ovarian, breast, and colorectal cancer. A phase 3 study in breast cancer (BEACON) is already underway and a phase 3 study in ovarian cancer could begin in 2012 as well. If BEACON can reach its goal of 30% (or better) improvement in overall survival, NKTR-102 could definitely be a $1 billion/year drug.

So

This article was written by

20.42K Followers
Stephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).

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