Nektar/Bristol Deal May Shake Up Immuno-Oncology Landscape

The multibillion-dollar collaboration includes 20 studies, including two pivotal trials in renal cell carcinoma and non-small cell lung cancer that will start in the middle of the year.

Bristol-Myers Squibb Co.'s high-priced deal with Nektar Therapeutics around developing NKTR-214 in multiple tumor types pushes a new mechanism into the limelight, suggesting potential for big changes in the immuno-oncology landscape.

The companies agreed in a deal announced Feb. 14 to greatly expand their collaboration for the development of the Interleukin-2 (IL-2)-targeting NKTR-214 with Bristol's PD-1 inhibitor Opdivo (nivolumab) and CTLA-4 inhibitor Yervoy (ipilimumab). Bristol will pay Nektar almost $1.85bn upfront, including $1bn in cash and an $850m equity investment, plus up to $1.78bn in milestone fees. (Also see "Bristol Goes In Big On New Valentine Nektar" - Scrip, 14 Feb, 2018.)

The deal gives Bristol more options in the increasingly competitive IO space and the structure is favorable relative to the risk of buying Nektar at its current valuation outright, given the limited data available for NKTR-214, BMO Capital Markets analyst Alex Arfaei said in a Feb. 14 note.

The collaboration is vast, encompassing development of combinations in nine tumor types: non-small cell lung, small cell lung, melanoma, renal cell carcinoma, urothelial, breast, colorectal and gastric cancers, and sarcoma. Bristol and Nektar have a joint clinical development plan of registration-enabling clinical trials in more than 20 indications in these nine tumor types, involving a total of 15,000 patients.

Nektar Chief Scientific Officer Jonathan Zalevsky noted to Scrip that this is a "very substantial campaign" even by the standards of Bristol-Myers Squibb, showing how seriously the partners are thinking about the collaboration.

"What you will see is a range of different types of clinical trials and they will have different time horizons," Zalevsky said.

However, per the deal, registration-enabling studies must start no later than 14 months from the effective date of collaboration (subject to allowable delays).

Nektar's Chief R&D Officer Stephen Doberstein commented to Scrip that the companies are still figuring out the design and sequencing of trials, but added that "time is of the essence" for getting them all started.

The companies plan to start two Phase III studies in first-line renal cell carcinoma (RCC) and melanoma in the middle of the year. They haven't disclosed details – for example, the size or comparators – but broadly speaking they said each Phase III randomized study is likely to include 1,000 patients. The partners will need to consider the standard of care in these settings when setting the trial design. Bristol's Opdivo/Yervoy may be considered a standard of care in first-line melanoma and the combination is poised for approval in first-line metastatic RCC, following positive trial results in that setting.

The companies will move rapidly to develop potential pathways for regulatory approvals that are accelerated, so the development program includes several IO relapsed/refractory patient populations where response rates are low, in addition to targeting the frontline, treatment-naïve line of therapy, execs said during a Feb. 14 investor call.

More details on their clinical trial plans should be available at the time of the American Society of Clinical Oncology (ASCO) annual meeting in June.

As part of the agreement, Bristol is set to pay 67.5% of the registrational trial expenses and ultimately will take 35% of global profits. For the initial period of the deal, the companies have agreed not to run competing studies that involve the mechanisms and particular tumor types involved in the collaboration. However, the exclusivity agreement is subject to the partners starting the trials within the agreed timeframe of 14 months.

IL-2: A Familiar Yet Disruptive Mechanism

NKTR-214 is a CD-122 agonist, meaning it binds with and activates CD-122, one of three components of IL-2 receptors found on the surface of T-cells. The product adds polyethylene glycol to human recombinant IL-2, which has the effect of delaying breakdown, allowing more convenient dosing and hopefully better toxicity.

Drugs targeting IL-2 have been available for many years and have been used in cancer – Nestle Health Science SA/Novartis AG's IL2 agonist Proleukin (aldesleukin) was approved in 1998 – but require intravenous administration in hospitals and are considered prohibitively toxic. The introduction of Yervoy, which works in a similar way, was considered a major advance, but Yervoy also is associated with severe toxicities, albeit not on the scale of IL-2.

According to Nektar, NKTR-214 activates immune cells directly in the tumor microenvironment, increasing expression of cell surface PD-1 on these cells.

Nektar's NKTR-214 may be given every three weeks, like an antibody, and in the outpatient environment; it has a good safety profile, at least based on data released so far.

The combination of Opdivo and NKTR-214 showed activity in renal cell carcinoma, melanoma and lung cancer in the Phase I/II PIVOT-02 dose escalation study presented at the Society for Immunotherapy and Cancer (SITC) annual meeting in November. (Also see "Nektar's IL-2 Impresses In Combination With Bristol's Opdivo" - Scrip, 14 Nov, 2017.)

Impressive results were reported; for example, a 64% objective response rate (ORR) in first-line melanoma, and were a highlight at the meeting. But the dataset was small, involving only 38 patients.

Beyond efficacy data, the rate of severe Grade 3/4 adverse events was also low at 10.5% overall and lower for the doses being taken forward, an important finding.

"Bristol has indicated that it has seen some additional data from the dose escalation portion of the Phase 1/2 PIVOT-02 trial presented last year at SITC, which provides us with some reassurance that the high ORRs were not a fluke given the small patient numbers," Barclays analyst Geoff Meacham said in a Feb. 14 note.

The IL-2 mechanism promises to augment checkpoint inhibitors, which don't work at all in some tumor types and are generally less active in tumors that are lower in PD-L1 expression.

Up until now, the only new mechanism that has grabbed Big Pharma in a big way is inhibition of Indoleamine 2,3-dioxygenase (IDO1), an enzyme that plays an important part in immune response. (Also see "Scrip's Rough Guide To IDO" - Scrip, 18 May, 2017.) The most advanced drug in the pipeline aimed at IDO is Incyte Corp.'s epacadostat and both Bristol and Merck moved fast into Phase III studies with combinations of their PD-1 inhibitors –  Opdivo and Keytruda (pembrolizumab), respectively – in multiple tumor types.

The Bristol/Nektar deal propels NKTR-214 as "one of the more differentiated assets in the exciting and burgeoning field of immuno-oncology," William Blair analyst Andrew Hsieh said in a Feb. 14 note.

Having Bristol as the development and commercialization partner "maximizes the disruptive potential for NKTR-214, given Bristol-Myers’s industry-leading immuno-oncology R&D infrastructure and global commercial footprint," Hsieh said.

Barclays Meacham said he agrees that it makes sense to target the IL-2 pathway, in addition to PD-1 and CTLA-4.

"The bigger leap, however, is whether -214 will drive incremental Opdivo and Yervoy sales longer term vs. cannibalizing the doublet, which is difficult to determine as there is no data on the triplet to date.  Despite the modest dilution ($0.02 this year and $0.10 in 2019) from the collaboration, we’re taking the long view on IL-2 as it could become a central leg in immuno-oncology development," Barclays' Meacham said.

At the time of the ASCO meeting in June, the company will have data for about 150 patients across expansion cohorts in the PIVOT-02 study, which includes I-O naive populations as well as some relapsed and refractory patients, Nektar Chief Medical Officer Mary Tagliaferri said during the investor call.

Bristol Vulnerable In Near Term

The standard of care in the most valuable I-O indication of first-line non-small cell lung cancer (NSCLC) could look a lot different come June. Bristol announced in January that there was a highly statistically significant improvement in progression-free survival (PFS), compared to chemotherapy, for Opdivo and Yervoy in first-line NSCLC patients who had high tumor mutation burden, regardless of PD-L1 expression status, in the CheckMate 227 study. (Also see "Bristol Debuts Opdivo/Yervoy Data In New First-Line Lung Cancer Bid" - Scrip, 5 Feb, 2018.) Details still have not been disclosed.

Detailed results from Merck's KEYNOTE-189 study of Keytruda with chemotherapy in first-line NSCLC also are eagerly awaited, but the company has already noted a benefit for overall survival (OS), as well as progression-free survival. And an avalanche of data from Roche's PD-L1 inhibitor Tecentriq (atezolizumab) with chemotherapy in various first-line NSCLC settings will hit this year.

While BMO Capital Markets' Arfaei was positive on the deal, he cautioned that "Bristol will trade on 1L-NSCLC data this year and we remain cautious on CM-227."

"We highly doubt that Bristol can file CM-227 based on PFS, and don't expect it to show meaningfully differentiated survival relative to KN-189. Bristol will likely have to wait for OS data in late 2018/early 2019, giving Merck plenty of time to get established," Arfaei said.

NKTR-214 has been in Phase I combination studies with Keytruda as well as Tecentriq. These trials are going to continue but wouldn't advance into registrational studies during the exclusivity period for the tumor types that Bristol and Nektar have prioritized.