Bristol-Myers Squibb (BMY) and Nektar Therapeutics (NKTR) Announce Global Development & Commercialization Collaboration for Nektar’s Product NKTR-214
The Collaboration is to evaluate the full-potential of NKTR-214 plus Obdivo (nivolumab) across numerous tumors, based on promising early data from ongoing Phase 1/2 PIVOT clinical study.
Establishes a broad joint clinical development plan combining NKTR-214 with Opdivo and Opdivo plus Yervoy (ipilmumab) in registration-enabling trials in more than 20 indications across 9 tumors.
Nektar to Cash $1.85 billion upfront payment; $1.0 billion in cash and the purchase of ~8.28 million shares of Nektar stock at $102.60 per share.
Companies to share global profits on NKTR-214, with Nektar receiving 65% and Bristol-Myers Squibb 35%.
Nektar to book revenue for worldwide sales of NKTR-214 and retains the ability to develop NKTR-214 with other anti-cancer agents.
Bristol-Myers Squibb obtains exclusive rights in 20 indications across 9 tumors included in the joint clinical development plan for a specified time period. Bristol-Myers Squibb (BMY) and Nektar Therapeutics (NKTR) announced commercialization collaboration for Nektar’s immuno-oncology program, NKTR-214. Under the collaboration, the companies will jointly develop and commercialize NKTR-214 in combination with Bristol-Myers Squibb’s Opdivo (nivolumab) and also Opdivo plus Yervoy (ipilimumab) in over more than 20 indications across 9 tumor types, as well as potential combinations with other anti-cancer agents from either of the respective companies and/or third parties.
NKTR-214, a CD122-biased agonist, is an investigational immuno-stimulatory therapy designed to selectively expand cancer-fighting T cells and natural killer (NK) cells directly in the tumor micro-environment and increase PD-1 expression on those immune cells.
Giovanni Caforio, M.D., Chairman and CEO, Bristol-Myers Squibb called NKTR-214, an investigational therapy designed with a unique approach to harnessing the full potential of the interleukin-2 pathway offering an additional validated immuno-oncology mechanism that has demonstrated a clinical benefit in patients, and holds significant potential to expand the benefits that these immuno-oncology agents can bring to patients with cancer.
Bristol-Myers Squibb and Nektar have agreed to a joint clinical development plan to evaluate NKTR-214 with Opdivo and Opdivo plus Yervoy in registration-enabling clinical trials in more than 20 indications in 9 tumor types including melanoma, renal cell carcinoma, non-small cell lung cancer, bladder and triple negative breast cancer. Pivotal studies in renal cell carcinoma and melanoma are expected to be initiated in mid-2018.
The Transaction Terms
– Bristol-Myers Squibb will make an upfront cash payment of $1.0 billion and an equity investment of $850 million (8,284,600 shares of NKTR at $102 at $102.60 per share).
– Bristol-Myers Squibb has agreed to certain lock-up, standstill and voting provisions on its share ownership for a period of five years subject to certain specified exceptions.
– Nektar is also eligible to receive an additional $1.78 billion in milestones, of which $1.43 billion are development and regulatory milestones and the remainder are sales milestones.
– Nektar will book revenue for worldwide sales of NKTR-214 and the companies will split global profits for NKTR-214 with Nektar receiving 65% and Bristol-Myers Squibb35%.
– Bristol-Myers Squibb will retain 100% of product revenues for its own medicines. The parties also will share development costs relative to their ownership interest of medicines included in the trials.
For trials in the joint clinical development plan that include NKTR-214 with Opdivo only, the parties will share development costs with 67.5% allocated to Bristol-Myers Squibb and 32.5% allocated to Nektar.
For the trials that include NKTR-214 with Opdivo and Yervoy, the parties will share development costs with 78% allocated to Bristol-Myers Squibb and 22% allocated to Nektar.
Both Bristol-Myers Squibb and Nektar have agreed for a specified period of time to not commence development with overlapping mechanisms of action in the same indications as those included in the joint clinical development plan. The parties are otherwise free to develop NKTR-214 with their own pipeline assets and/or any other third party compounds.
Both parties have agreed to initiate registration-enabling studies in the joint clinical development plan within 14 months of the effective date of the agreement, subject to allowable delays.
Both parties will jointly commercialize NKTR-214 on a global basis. Bristol-Myers Squibb will lead global commercialization activities for NKTR-214 combinations with Bristol-Myers Squibb medicines and Nektar will co-commercialize such combinations in the US, major EU markets and Japan. Nektar will lead global commercialization activities for NKTR-214 combinations with either Nektar medicines and/or other third-party medicines.
For Bristol-Myers Squibb, the transactions are expected to be dilutive in 2018 and 2019 to the company’s non-GAAP EPS by $0.02 and $0.10, respectively.
Nektar and Bristol-Myers Squibb currently expect to complete the transaction during the second quarter of 2018, subject to the expiration or termination of applicable waiting periods under all applicable US antitrust laws and the satisfaction of other usual and customary closing conditions. Further details of the agreement can be found in Nektar’s Form 8-K filed today with the Securities and Exchange Commission. Sidley Austin LLP is acting as legal counsel to Nektar for the strategic collaboration agreement and equity investment.
Nektar Conference Call with Analysts & Investors
Nektar is hosting a conference call and webcast presentation today, February 14, 2018 at 8:00 a.m. Eastern Time to discuss the transaction. The call can be accessed by dialing (877) 881-2183 (U.S.) or (970) 315-0453 (international), and entering passcode 2289559. To access the live webcast, or the subsequent archived recording, visit the Investor Events section of the Nektar website at: http://ir.nektar.com/events-and-presentations/events.
The webcast will be available for replay on Nektar’s website for two weeks following the call.
Prohost Observations
Improving on the current immuno-oncology (I-O) products, including checkpoint inhibitors, such as Bristol-Myers Opdivo and Yervoy is the most important task oncology companies are obliged to do at this time. This task is recognized can be accomplished only through the use of combination therapy. In this news, we can feel Bristol-Myers enthusiasm from the amount of the upfront payments to Nektar ($1.5 Billion) and the other terms of the agreement, including buying Nektar’s shares at $102 a share.
The news is great just to learn that Nektar’s NK-214 product has positive results when combined with checkpoint inhibitors.
Investors selling the stock at the good news are doing a favor to those who like to own value stocks.
Prohost 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. Also, investing in stocks includes certain risks. It is important that you consult with your own financial adviser before making an investment decision.
News & Comments
February 14, 2018
Nektar Therapeutics: The Best Example of the “Sell Good News” Reckless Habit
Bristol-Myers Squibb (BMY) and Nektar Therapeutics (NKTR) Announce Global Development & Commercialization Collaboration for Nektar’s Product NKTR-214
The Collaboration is to evaluate the full-potential of NKTR-214 plus Obdivo (nivolumab) across numerous tumors, based on promising early data from ongoing Phase 1/2 PIVOT clinical study.
Establishes a broad joint clinical development plan combining NKTR-214 with Opdivo and Opdivo plus Yervoy (ipilmumab) in registration-enabling trials in more than 20 indications across 9 tumors.
Nektar to Cash $1.85 billion upfront payment; $1.0 billion in cash and the purchase of ~8.28 million shares of Nektar stock at $102.60 per share.
Companies to share global profits on NKTR-214, with Nektar receiving 65% and Bristol-Myers Squibb 35%.
Nektar to book revenue for worldwide sales of NKTR-214 and retains the ability to develop NKTR-214 with other anti-cancer agents.
Bristol-Myers Squibb obtains exclusive rights in 20 indications across 9 tumors included in the joint clinical development plan for a specified time period. Bristol-Myers Squibb (BMY) and Nektar Therapeutics (NKTR) announced commercialization collaboration for Nektar’s immuno-oncology program, NKTR-214. Under the collaboration, the companies will jointly develop and commercialize NKTR-214 in combination with Bristol-Myers Squibb’s Opdivo (nivolumab) and also Opdivo plus Yervoy (ipilimumab) in over more than 20 indications across 9 tumor types, as well as potential combinations with other anti-cancer agents from either of the respective companies and/or third parties.
NKTR-214, a CD122-biased agonist, is an investigational immuno-stimulatory therapy designed to selectively expand cancer-fighting T cells and natural killer (NK) cells directly in the tumor micro-environment and increase PD-1 expression on those immune cells.
Giovanni Caforio, M.D., Chairman and CEO, Bristol-Myers Squibb called NKTR-214, an investigational therapy designed with a unique approach to harnessing the full potential of the interleukin-2 pathway offering an additional validated immuno-oncology mechanism that has demonstrated a clinical benefit in patients, and holds significant potential to expand the benefits that these immuno-oncology agents can bring to patients with cancer.
Bristol-Myers Squibb and Nektar have agreed to a joint clinical development plan to evaluate NKTR-214 with Opdivo and Opdivo plus Yervoy in registration-enabling clinical trials in more than 20 indications in 9 tumor types including melanoma, renal cell carcinoma, non-small cell lung cancer, bladder and triple negative breast cancer. Pivotal studies in renal cell carcinoma and melanoma are expected to be initiated in mid-2018.
The Transaction Terms
– Bristol-Myers Squibb will make an upfront cash payment of $1.0 billion and an equity investment of $850 million (8,284,600 shares of NKTR at $102 at $102.60 per share).
– Bristol-Myers Squibb has agreed to certain lock-up, standstill and voting provisions on its share ownership for a period of five years subject to certain specified exceptions.
– Nektar is also eligible to receive an additional $1.78 billion in milestones, of which $1.43 billion are development and regulatory milestones and the remainder are sales milestones.
– Nektar will book revenue for worldwide sales of NKTR-214 and the companies will split global profits for NKTR-214 with Nektar receiving 65% and Bristol-Myers Squibb35%.
– Bristol-Myers Squibb will retain 100% of product revenues for its own medicines. The parties also will share development costs relative to their ownership interest of medicines included in the trials.
For trials in the joint clinical development plan that include NKTR-214 with Opdivo only, the parties will share development costs with 67.5% allocated to Bristol-Myers Squibb and 32.5% allocated to Nektar.
For the trials that include NKTR-214 with Opdivo and Yervoy, the parties will share development costs with 78% allocated to Bristol-Myers Squibb and 22% allocated to Nektar.
Both Bristol-Myers Squibb and Nektar have agreed for a specified period of time to not commence development with overlapping mechanisms of action in the same indications as those included in the joint clinical development plan. The parties are otherwise free to develop NKTR-214 with their own pipeline assets and/or any other third party compounds.
Both parties have agreed to initiate registration-enabling studies in the joint clinical development plan within 14 months of the effective date of the agreement, subject to allowable delays.
Both parties will jointly commercialize NKTR-214 on a global basis. Bristol-Myers Squibb will lead global commercialization activities for NKTR-214 combinations with Bristol-Myers Squibb medicines and Nektar will co-commercialize such combinations in the US, major EU markets and Japan. Nektar will lead global commercialization activities for NKTR-214 combinations with either Nektar medicines and/or other third-party medicines.
For Bristol-Myers Squibb, the transactions are expected to be dilutive in 2018 and 2019 to the company’s non-GAAP EPS by $0.02 and $0.10, respectively.
Nektar and Bristol-Myers Squibb currently expect to complete the transaction during the second quarter of 2018, subject to the expiration or termination of applicable waiting periods under all applicable US antitrust laws and the satisfaction of other usual and customary closing conditions. Further details of the agreement can be found in Nektar’s Form 8-K filed today with the Securities and Exchange Commission. Sidley Austin LLP is acting as legal counsel to Nektar for the strategic collaboration agreement and equity investment.
Nektar Conference Call with Analysts & Investors
Nektar is hosting a conference call and webcast presentation today, February 14, 2018 at 8:00 a.m. Eastern Time to discuss the transaction. The call can be accessed by dialing (877) 881-2183 (U.S.) or (970) 315-0453 (international), and entering passcode 2289559. To access the live webcast, or the subsequent archived recording, visit the Investor Events section of the Nektar website at: http://ir.nektar.com/events-and-presentations/events.
The webcast will be available for replay on Nektar’s website for two weeks following the call.
Prohost Observations
Improving on the current immuno-oncology (I-O) products, including checkpoint inhibitors, such as Bristol-Myers Opdivo and Yervoy is the most important task oncology companies are obliged to do at this time. This task is recognized can be accomplished only through the use of combination therapy. In this news, we can feel Bristol-Myers enthusiasm from the amount of the upfront payments to Nektar ($1.5 Billion) and the other terms of the agreement, including buying Nektar’s shares at $102 a share.
The news is great just to learn that Nektar’s NK-214 product has positive results when combined with checkpoint inhibitors.
Investors selling the stock at the good news are doing a favor to those who like to own value stocks.
Prohost 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. Also, investing in stocks includes certain risks. It is important that you consult with your own financial adviser before making an investment decision.
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