Addressing Confusion About Nektar Therapeutics’ Bempeg
By: Louis E. Metzger Iv
Tags: Finance, Ethics, Cancer, Wall Street, Pharmaceutical

BMY doubles down on Bempeg

Additional compelling evidence that Bempeg works, despite the manufacturing problem, is that (BMY) chose to continue its large trials of Opdivo plus Bempeg for multiple indications. Before the public was aware of the Bempeg manufacturing difficulties, Nektar shared these with (BMY) and with the FDA. Both were able to review the binned trial data and to question Nektar about its manufacturing mistake and its corrective measures. As a result of these discussions, and despite the manufacturing issue, in mid-2019 the FDA granted (BMY) and Nektar Breakthrough Therapy Designation (BTD) for a Phase III trial of Opdivo plus Bempeg to treat first-line advanced melanoma. A readout on this trial has been slated (reiterated in the last three Nektar conference calls) for 2022. BTD is a big deal because it can lead to accelerated approval by the FDA.

Moreover, (BMY) and Nektar doubled down on the most promising trials of Opdivo plus Bempeg (after melanoma) in early 2020, expanding to registrational trials for first-line cisplatin-ineligible metastatic urothelial cancer (UC) and first-line metastatic renal cell carcinoma (RCC). These investments would be inconceivable if (BMY) thought that Bempeg was “a placebo” and/or that it remained plagued by quality-control issues, as the short-and-distort manipulators have continuously alleged (thereby “confusing” some analysts).

In early 2021, Nektar, Blackstone-funded SFJ Pharma, and (BMY)’s fierce competitor (MRK) entered into a collaboration to perform trials of Keytruda plus Bempeg in head and neck cancers (HNC). Note that SFJ Pharma, given its track record of 15 major market approvals since it was founded in 2009, would be unlikely to enter a deal to co-develop “a placebo,” nor would it waste $150M on trials of a compound that could not be reliably manufactured.

Bempeg has competition, but all of it is years behind Nektar and is not necessarily going to be superior. For example, Synthorx’s (now Sanofi’s) Bempeg-competitive compound THOR-707, reported its first human trial data in April. These supported Bempeg’s mechanism of action, but showed that THOR-707 seemed to trail Bempeg’s efficacy. In 2019, with only preclinical data (no human studies) for THOR-707, Synthorx was bought by Sanofi for $2.5B. Nektar’s market cap is $2.9B, and it has 4 Phase III trials (all Bempeg), 6 Phase II trials, 3 Phase I/II trials, and 3 Phase I trials.

In summary:

Multiple lines of peer-reviewed scientific data, enriched with biomarker studies, strongly suggest that Bempeg works in humans and is safe.

Bempeg manufacturing is a solved problem, ongoing clinical trials have used properly-made Bempeg for years, and the FDA granted BTD for Opdivo plus Bempeg in 2019 for melanoma on the strength of the “good batch” Bempeg data.

Large datasets for Opdivo plus Bempeg in the treatment of melanoma, RCC, and UC read out throughout 2022, in addition to the Keytruda plus Bempeg trial in NSCLC that is due to report in 2021.

Taken together, there’s no reason to believe, as some analysts mistakenly do, that Bempeg remains chequered. On the contrary, maturing late-stage clinical trials are likely to show that Bempeg makes checkpoint inhibitors such as Opdivo and Keytruda work better and in significantly more people than the single agents, thereby allowing a large new population to benefit from these game-changing cancer treatments. Moreover, since Bempeg has consistently shown lower toxicity than most other cancer therapeutics, it may lend itself to combination with Opdivo or Keytruda in triplets with other types of targeted cancer drugs (anti-CTL4 compounds, VEGF inhibitors, TKI’s, etc.) to kill cancer cells by multiple mechanisms. As increasing numbers and types of targeted cancer drugs make their way into the clinic, medicine advances on the path toward converting many cancers from death sentences into controllable and even curable diseases. Given the heterogeneity of cancer, a “moonshot cure” is far less likely than the use of targeted, personalized combination therapies to “chip away” at this group of diseases, thereby lengthening patients’ health-spans and life-spans.

A note on the human cost of biopharma stock manipulation

The institutions and individuals creating false narratives in order to disparage Nektar and thereby manipulate its share price are directly damaging the advancement of medicine. Fabrications designed to baselessly cast shade on Nektar’s science, such as Plainview’s completely discredited “report,” along with the nonsense posted in online forums by self-identified hedge fund affiliates, discourages both patients and physicians from participating in clinical trials. This in turn keeps promising investigational compounds away from patients whose lives might be saved by them. There’s a real human cost to short-and-distort takedowns of biopharma companies. As citizens, we should never forget this, and we should demand greater safeguards against such manipulation.

“It is time the nation woke up and realized that it’s not the armed robbers or drug dealers who cause the most economic harm, it’s the white collar criminals living in the most expensive homes who have the most impressive resumes who harm us the most.” — Harry Markopolos, testimony before the US Congress

Acknowledgment

I thank Seeking Alpha author Corey Sommers for his collaboration in our research on Nektar Therapeutics, and for his encouragement to post my analysis.

Disclosures:

Disclosure: I have a beneficial long position in NKTR through stock ownership and/or options ownership and/or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving any type of compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article contains my opinions based on independent research. Please perform your own due diligence before investing.