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Nektar Therapeutics Planning Phase 2/3 Studies with Merck and SFJ Pharma for Head and Neck Cancer

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Nektar Therapeutics shares traded 14% higher after the company reported it plans to conduct a Phase 2/3 study of bempegaldesleukin in combination with Merck's KEYTRUDA® in patients with squamous cell carcinoma of the head and neck and is partnering on a second Phase 2/3 study with SFJ Pharmaceuticals that will provide $150 million to fund development.

Biopharmaceutical company Nektar Therapeutics (NKTR:NASDAQ), which is employs new chemistry approaches to create medicines to treat cancer and auto-immune disease, today announced that "it has entered into a clinical trial collaboration and supply agreement with Merck & Co. Inc. (MRK:NYSE) for a Phase 2/3 study of bempegaldesleukin (NKTR-214, BEMPEG)."

The company stated that "BEMPEG is its investigational IL-2 pathway agent, in combination with Merck's KEYTRUDA® (pembrolizumab) for first-line treatment of patients with metastatic or unresectable recurrent squamous cell carcinoma of the head and neck (SCCHN) whose tumors express PD-L1 (Combined Positive Score [CPS] ≥1)." The firm advised that it plans to begin the Phase 2/3 study in H2/21.

Nektar Therapeutics' Chief R&D Officer Jonathan Zalevsky, Ph.D., commented, "We are excited to advance the combination of BEMPEG plus KEYTRUDA to a Phase 2/3 study in first-line squamous cell carcinoma of the head and neck...Earlier studies of BEMPEG in combination with immune checkpoint inhibitors, also known as ICIs, evaluated in patients with immune-sensitive cancers have shown the potential to increase and deepen treatment responses as compared to historical rates for ICIs alone. This collaboration with Merck will enable us to further explore the combination of BEMPEG with the leading checkpoint inhibitor therapy in the setting of advanced head and neck cancer."

The company advised that according to the terms of the agreement with Merck, it will responsible for conducting the Phase 2/3 trial. The study calls for the enrollment of 500 patients with metastatic or recurrent SCCHN with PD-L1 expressing tumors who will be randomized to receive pembrolizumab alone or a combination of BEMPEG plus pembrolizumab.

The firm stated that an interim analysis is scheduled to be performed during the Phase 2 portion of the trial based upon the overall response rate (ORR) of the first 200 trial participants after they have each undergone at least four months of treatment and follow up. The company indicated that if this first cohort of 200 patients displays positive ORR results, then it will proceed into the Phase 3 portion of the study with the remaining 300 enrolled patients. Nektar stated that the Phase 2/3 study's primary endpoints of the trial are ORR and overall survival (OS) and that a secondary endpoint has been defined as progression free survival (PFS).

Nektar Therapeutics also announced today that it entered into "a financing and co-development collaboration with SFJ Pharmaceuticals to support the development of bempegaldesleukin (BEMPEG), an investigational CD122-preferential IL-2–pathway agonist." The firm noted that SFJ Pharmaceuticals Group is a global drug development firm that is backed by Abingworth and Blackstone Life Sciences.

Nektar's President and CEO Howard Robin remarked, "This innovative collaboration with SFJ provides Nektar with substantial non-dilutive funding to broaden the registrational program for BEMPEG...SFJ's global drug development and clinical trial management expertise, coupled with a track record of success in accelerating and advancing late-stage development programs for global pharmaceutical companies, make them an ideal partner."

The company noted that the agreement provides that SFJ will fund up to a total of $150 million for the Phase 2/3 head and neck cancer study through the trial's completion. Nektar in return will be required to make success-based annual milestone payments to SFJ over a period of seven to eight years. The firm noted that the milestone payments are strictly contingent upon receiving specific U.S. regulatory approvals for certain indications for BEMPEG that may result from a head and neck study projected to be completed in 2024. The company stated that it will only be required to make the future payments to SFJ for indications treated with BEMPEG that are granted regulatory approval and will not owe any payments for any unapproved indications.

"We are excited to be partnering with Nektar under this novel financing and co-development agreement...Based on the strength of the clinical data generated to date for BEMPEG in melanoma and other tumor types, and following an extensive diligence process conducted in conjunction with our partners at Blackstone Life Sciences and Abingworth, we believe that BEMPEG has great potential to help cancer patients. We look forward to supporting the Phase 3 study and working closely with the Nektar team," stated Bob DeBenedetto, CEO of SFJ.

The company explained that squamous cell carcinoma (SCCHN) of the head and neck is the sixth most common cancer worldwide and that according to The Global Cancer Observatory there were more than 850,000 cases of SCCHN that resulted in 440,000 deaths worldwide in 2020.

Nektar Therapeutics is headquartered in San Francisco, Calif. and has other offices in Huntsville, Ala. and Hyderabad, India. The company's wholly owned research pipeline includes investigational medicines in immunology, oncology and virology. In addition, Nektar's portfolio includes several other approved partnered medicines.

The company noted that SFJ Pharmaceuticals is a global drug development group that offers a highly customized co-development partnering model for biotechnology and pharmaceutical companies. SFJ is unique in that it is able to provide at-risk funding along with global clinical development management and expertise required to successfully navigate and submit promising drug development applications through the regulatory submission process.

Nektar Therapeutics started the day with a market cap of around $4.0 billion with approximately 179.4 million shares outstanding and a short interest of about 12.75%. NKTR shares opened 11.31% higher today at $25.00 (+$2.54, +11.31%) over yesterday's $22.46 closing price and reached a new 52-week high price this morning of $26.75. The stock has traded today between $23.81 and $26.75 per share and is currently trading at $25.59 (+$3.13, +13.94%).


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