Shares of the biopharmaceutical company Nektar Therapeutics (NASDAQ: NKTR) closed 17% lower on Thursday following the announcement of the termination of all trials related to its key cancer drug. The decision followed the failure of multiple studies on the drug.
Nektar and Bristol Myers Squibb (NYSE: BMY) jointly decided to discontinue the global clinical development program for bempegaldesleukin (BEMPEG) in combination with Opdivo (nivolumab). The decision was based on pre-planned analyses of two late-stage clinical studies of these drugs in renal cell carcinoma (RCC) and bladder cancer. Sadly, these studies, along with all other related ongoing studies in the program will be terminated.
Failed Studies
In a Phase 3 PIVOT-09 study, a total of 623 patients with previously untreated advanced RCC participated. The trial failed to show statistical significance compared to the tyrosine kinase inhibitor (TKI) control arm. An interim analysis of overall survival (OS) also did not meet the prespecified points.
Additionally, the Phase 2 PIVOT-10 study, which enrolled 192 patients with cisplatin-ineligible, locally advanced urothelial cancer, failed to demonstrate the efficacy of the combination of drugs.
Last month, Nektar and Bristol Myers terminated two pivotal studies in melanoma following the failure in meeting the target in one of the trials involving the combination therapy.
Official Comments
Jonathan Zalevsky, the chief research and development officer of Nektar, said, “We thank BMS for their collaboration on the studies of bempegaldesleukin. Nektar remains dedicated to the development of therapeutics to treat cancer and auto-immune disease.”
Wall Street’s Take
Following the clinical update, Mizuho Securities analyst Mara Goldstein reiterated a Hold rating on Nektar and reduced the price target to $6 (2.6% downside potential) from $8.
Goldstein said, “Our new $6 PT is composed of a risk-adjusted NPV for NKTR-358, licensed to LLY, the base business/early-stage programs, and our estimation of cash of approximately $500 million at YE22.”
Overall, the stock has a Hold consensus rating based on two Buys, eight Holds, and one Sell. The average Nektar price target of $7.75 implies 25.81% upside potential to current levels. Shares have decreased 67.23% over the past year.
Risk Analysis
According to the new TipRanks Risk Factors tool, Nektar stock is at risk mainly from three factors: Tech and Innovation, Finance and Corporate, and Legal and Regulatory, which contribute 10 risks collectively, out of the total 46 risks identified for the stock.
Despite a low-risk profile compared to the sector average, clinical setbacks, current stock price performance, and analyst ratings on the stock should be considered before making investment decisions.
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