NKTR - Bull Thesis
(last updated 4/26/22)
BULL THESIS SUMMARY
NKTR overall corporate and executive summary
A leader in the development of cytokine-based therapies
Lead asset, NKTR358 immunology/auto-immune (IL-2 T Reg stimulator)
Partnered with Lilly,
Generous deal for NKT
22% royalty on top-line revenue
Impressive Ph2 clinical results in Lupus and atopic dermatitis
Current ~$100M enterprise value seems low even with recent death of lead asset, Bempeg
Core pegylation technology provides ability to reduce toxicity of cytokines while retaining beneficial activities
Ended 2021 with almost $800M in cash and investments
Cash runway into 2025 after recent restructure (laid off 70% of work force)
No debt on balance sheet as of Q4 2021
NKTR-358 (Pegylated IL-2 T Regulatory Cell Stimulator)
Drives expansion of T regulatory cells
Impressive Ph2 data in Lupus and atopic dermatitis
Generous deal from partner Lilly
Covers 75% dev costs
$175M milestones remain
22% revenue royalty
NKTR received initial $250M payment and eligible for up to $250M in additional development milestones
NKTR-255 (PEG-conjugated IL-2 based Treg stimulator
Drives expansion of NK and T cells and appears to increase effectiveness of CAR-T
Pre-clin and early clin suggests drives expansion and persistence of CAR-T cells in vivo
Encouraging early activity observed in first patients receiving treatment in MM and DLBCL (combo trials with RITUXAN or CD19/22 CAR T-cells)
FS/MV 12/27/21 (updated 3/24/22)(EJV updated with major corp update 4/25/22)
(See below for full updated bull analysis)
BULL THESIS
NKTR overall corporate
A leader in the development of cytokine-based therapies especially for immuno-oncology
Current ~$300M enterprise value is a bargain with key readouts coming within weeks, and multiple promising pipeline assets
Core pegylation technology provides ability to reduce toxicity of cytokines while retaining beneficial activities
Despite recent setback in melanoma, Bempeg remains a very promising immuno-oncology asset that was the basis of a $1.85B licensing deal with Bristol-Myers Squibb (BMS)
Many registrational studies currently ongoing with multiple potential approvals of bempeg expected between 2023 and 2025
Sales from the indications bempeg could be approved for expected to be in billions
Major collaborations validate the promise of bempeg and provide non-dilutive funding
Bempeg licensing agreement with BMS netted $1.85B
$1.0B in cash and purchased ~8.28 million shares
SFJ Pharma to fund up to $150M for development of Bempeg + pembrolizumab in head & neck cancer
Ended 2021 with almost $800M in cash and investments
Cash runway into 2023
Restructuring company to reduce spend/extend cash runway
No debt on balance sheet as of Q4 2021
Bempegaldesleukin (Bempeg) (NKTR-214) (Pegylated IL-2)
Two registrational studies with Opdivo + Bempeg reading out in first half of 2022 (melanoma already read out)
Metastatic Melanoma
Announced on 3/14/22 that Ph3 trial did not meet primary endpoints and will not perform further analyses of study
Prior Ph2 showed durable clinical benefit with median progression-free survival of 30.9 months
More data in coming months may help to reveal why Ph3 trial failed
Renal Cell Carcinoma - interim data expected by mid-April 2022 for co-primary endpoint of overall survival
Phase 1 showed encouraging overall response rates and that AEs were manageable
Muscle-invasive Bladder Cancer - data expected by end of May of 2022 for Ph2 trial
Phase ½ showed encouraging results with overall response rate of 48%, complete response rate of 19% and median 78% tumor shrinkage
One planned registrational trial with Keytruda + Bempeg
Head & Neck Cancer
Phase ⅔ trial underway
Eight ongoing trials with anti-PD1 + Bempeg
Multiple myeloma
Data presented at SITC 2020 showed 53% overall response, 34% complete response and 47% had 100% reduction in target lesions
NSCLC
Presented data at ESMO-IO: ORR of 18% and two patients with 100% reduction in target lesions
NKTR-255 (novel polyethylene glycol-conjugate of recombinant human interleukin-15 (rhIL-15))
Drives expansion of NK cells and increases response for CAR-T and cellular therapies
Designed to capture opportunity in liquid and solid tumor settings
Encouraging early activity observed in first patients receiving treatment in MM and DLBCL (combo trials with RITUXAN or CD19/22 CAR T-cells)
MM: Response assessment of stable disease
DLBCL: Metabolic response in splenic target lesion on cycle 5 out of 7
Well tolerated in patients with hematologic malignancies (NHL and MM)
At ASH 2021 reported 63% of MM patients and 43% of NHL patients reported disease stabilization
NKTR-262 (TLR ⅞ agonist)
Phase ½ trial in solid tumor malignancies (+ BEMPEG)
In combo trial with bempeg for solid tumors; showed to alter tumor micro-environment through activating innate and adaptive immune systems
Early efficacy data is promising: showed superiority to BEMPEG + RT and showed early evidence of clinical activity
NKTR-358 (IL-2 T Regulatory Cell Stimulator)
Drives expansion of T regulatory cells
At ACR 2020 demonstrated dose-dependent reduction in CLASI-A score in patients with Lupus
Strong collaboration with Lilly to complete clinical development
NKTR received initial $150M payment and eligible for up to $250M in additional development milestones
FS/MV 3/24/22
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