Nektar lands record $3.6B deal with Bristol-Myers Squibb for cancer immunotherapy

Bristol-Myers Squibb (NYSE:BMY) could fork over as much as $3.63 billion for the rights to Nektar Therapeutics‘ (NSDQ:NKTR) cancer immunotherapy drug, according to a deal announced today by the two companies.

Nektar’s NKTR-214, which is still in development, is designed to boost the number of cancer-killing T-cells around the tumor’s micro-environment. Bristol-Myers Squibb plans to pair the investigational therapy with its own cancer drug, Opdivo, across more than 20 indications in nine tumor types.

Pivotal studies in renal cell carcinoma and melanoma are slated to launch in mid-2018, the companies reported.

“We are excited to bring our leading capabilities and expertise in developing cancer therapies together with Nektar’s innovative science to jointly develop and commercialize NKTR-214 in combination with Opdivo and Opdivo plus Yervoy,” Dr. Giovanni Caforio, Bristol-Myers Squibb’s chairman & CEO, said in prepared remarks.

“Bristol-Myers Squibb has established Opdivo plus Yervoy as the only approved immunotherapy combination for cancer patients and built a robust oncology pipeline. With this commitment to the development of NKTR-214, an investigational therapy designed with a unique approach to harnessing the full potential of the interleukin-2 pathway, we now have a third validated I-O 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.”

Nektar and Bristol-Myers Squibb have an existing partnership, which was established in Sept., 2016, to study the Opdivo-NKTR-214 combination in patients with melanoma, kidney cancer, non-small cell lung cancer, bladder cancer and triple-negative breast cancer.

“Bristol-Myers Squibb, the global leader in immuno-oncology, is the ideal collaborator to enable us to establish NKTR-214 as a backbone immunotherapy in the treatment of cancer,” Nektar’s president & CEO, Howard Robin, added.  “We look forward to our continued relationship with Bristol-Myers Squibb as we work together to advance cancer treatment for patients around the world.”

Bristol-Myers Squibb plans to make an upfront cash payment of $1.0 billion and an equity investment of $850 million into Nektar, according to the terms of the deal. Nektar could also receive an additional $1.78 billion in milestones and a lot of that – $1.43 billion – will come from development & regulatory milestones. The rest will come from sales milestones, Bristol-Myers Squibb said.

The $3.63 billion agreement is a record deal for biotech, according to Forbes.

Nektar will log revenue for global sales of NKTR-214 and the two companies plan to split global profits for NKTR-214, with Nektar getting 65% and Bristol-Myers Squibb receiving 35%.

Both companies have also agreed to hold off on developing medicines with overlapping mechanisms of action in the same indications as those included in their deal for a pre-determined period of time.

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