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OUR REASONS DIFFER INVESTING IN NKTR

Prohost Biotech - Monday, August 04, 2014

What’s In the Agenda? Technically-oriented analysts sometimes boost small development-stage stocks on news that are not what we meant to hear when we picked these firms to invest in. Although we appreciate the rallying of stocks for whatever reasons, our choice of firms for investment purpose  is based primarily on their validated far-reaching technologies; their pipeline promising products and the professionalism of their management teams.    

NECTAR THERAPEUTICS

Our choice of Nectar (NKTR) to begin with is that on Friday, Aug. 1, 2014, NKTR added 12.04% to its price because the firm has showed a narrower $0.26 loss per share than analysts Consensus Estimate of $0.36- $0.28 and the year-ago loss of 37 cents.

We welcome boosting the stock for that reason, although our main reason for betting on this firm emanates from its successful validated proprietary oral, small molecule polymer conjugate technology and diversified promising pipeline products.

We remind that on June 4, 2014, the New England Journal of Medicine published data online from two pivotal Phase 3 studies of the firm’s lead drug Movantik for opioid-induced constipation.  The article showed that Both KODIAC-4 and KODIAC-5 studies met their primary endpoint, demonstrating an improvement in treatment effect versus placebo. Results from these studies show that more OIC non-cancer pain patients treated with Movantik at a 25 mg dose had a consistent response of increased spontaneous bowel movements through 12 weeks of treatment compared to placebo.

That was the beginning of the good news On June 12, 2014, excellent news came as the FDA Anesthetic and Analgesic Drug Products Advisory Committee (AADPAC) members voted that the FDA should not require cardiovascular outcomes trials for the peripherally-acting mu-opioid receptor antagonist (PAMORA) class of drugs. This class includes MovantikTM (naloxegol oxalate), for opioid-induced constipation (OIC) for patients with chronic non-cancer pain. Following a clarification of the vote, the majority of the Committee suggested continued post-approval data collection for cardiovascular safety.

That is, indeed, great news.

The AADPAC had reviewed the class of peripherally acting opioid receptor antagonists on June 11-12, 2014. The members assessed the necessity, timing, design and size of cardiovascular outcomes trials to support approval of products in the class, for the proposed indication of OIC in patients taking opioids for chronic non-cancer pain.

We also remind that the Prescription Drug User Fee Act (PDUFA) date set by the FDA for Movantik is September 16, 2014.

Movantik was designed using Nektar's proprietary technology cited above. The drug is part of the exclusive worldwide license agreement announced in September 2009 between AstraZeneca and Nektar.

Opioids’ pain relief is known to occur through binding mu-receptors in the brain, but they also bind mu-receptors in the bowel, causing opioid-induced constipation (OIC). The incidence of OIC is high and there is a significant unmet need for safe, effective treatment options for this side effect.

The market is huge, as an estimated 235 million prescriptions for opioids are written in the US each year, of which 20% are for chronic pain. For patients taking prescription opioids for chronic pain, constipation is one of the most common side effects and one not adequately relieved by laxatives.

In addition to the U.S., AstraZeneca has also submitted regulatory filings for Movantik with health agencies in the European Union and Canada.

As we said before, this drug is not all what’s in Nektars’ pipeline. In addition to several marketed drugs approved for large drug developers thanks to Nektar’s technology, the investigational pipeline is large, deep and diversified. It comprises several clinical trials for pain, for cancer and for other diseases.

Nektar promises a bright future.

The stock closed on Friday at $11.82 and the firm has a market cap. of $1.50 billion.    

FORWARD-LOOKING: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

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