Bristol-Myers Bets Nearly $2B on Nektar for an Immunotherapy Boost

Bristol-Myers Bets Nearly $2B on Nektar for an Immunotherapy Boost

When it comes to spending cash on potential combinations for its cancer immunotherapy drugs, Bristol-Myers Squibb (NYSE: BMY) isn’t afraid of the b-word: billions.

The New York-based pharma firm is paying Nektar Therapeutics (NASDAQ: NKTR) of San Francisco $1 billion in cash and buying another $850 million in shares, all to grab partial rights to Nektar’s top immunotherapy drug, NKT-214. The experimental drug is designed to stimulate a patient’s own immune cells to be more efficient cancer killers.

It’s one approach among many that Bristol-Myers and rivals are testing to boost success rates of their so-called checkpoint inhibitors. Checkpoint inhibitors work by blocking a tumor’s ability to hide from the immune system. When used alone, they have shown remarkable results, but only in a minority of patients. Bristol-Myers is in a spirited fight with Merck (NYSE: MRK), Roche, and others to prove their checkpoint inhibitors worthy of approval in a variety of cancers. Bristol just reported that nivolumab (Opdivo) brought in $4.9 billion in revenue last year, making it the firm’s top-selling drug. Merck’s pembrolizumab (Keytruda), its closest rival, tallied $3.8 billion in revenue in 2017.

With NKT-214, Bristol is betting that its own checkpoint inhibitors will hobble the tumor’s defenses while Nektar’s drug revs up the patient’s own immune system. The companies said they plan to study combinations of NKT-214 and nivolumab, or those two plus Bristol’s ipilumumab (Yervoy), in more than 20 indications. If those studies are successful and the combinations come to market, however, they will be sold separately. Nektar will retain control over NKT-214’s distribution and pricing, according to Nektar officials, who answered questions through a spokesman.

But they would have to be prescribed together, if that’s what an eventual FDA approval requires. Both would be administered to a patient simultaneously, Nektar officials said.

Bristol is buying 8.3 million Nektar shares at $102.60 a share, 36 percent higher than Nektar’s closing price Tuesday. The deal gives Bristol 4.9 percent of Nektar and rights to 35 percent of global profits from NKT-214. In addition to the $1.85 billion in cash, Bristol could pay Nektar $1.78 billion more, depending on the drugs’ progress.

It’s at least the third time Bristol has hit the $1 billion mark or put it within reach to acquire a possible combination mate. In 2015, it shelled out $800 million with extra milestones on offer for a drug developed by Flexus Biosciences. Last year, it bought startup IFM Therapeutics for $300 million upfront and $1 billion in potential future “biobuck” payouts.

Bristol has been testing NKT-214 in combination with nivolumab against a variety of cancers. That study has enrolled 350 patients, according to the companies. They reported a small slice of data from the ongoing study last fall.

There are more than 1,000 active cancer immunotherapy combination trials. Xconomy explored the downsides to the combination frenzy here, described some of the clinical headaches here, and most recently, noted here the ongoing biological mysteries holding back immunotherapy.

Image of metastatic melanoma cells by the National Cancer Institute

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