Replies to post #217273 on Biotech Values

[ghmm]

NKTR:

For the record, I think its a good deal for NKTR too. Sure short term traders were expecting a sale and that may be a disappointment. (The stock went up around $4 since I started typing!)

1) They've got 214 funded (~125M per year development) which could've had a significant burn. (32.5% of Opdivo combo, 22% of Opdivo+Yervoy combo)
2) Realistic for them to take 214 by themselves to commercialization would have been a significant undertaken for them alone and probably not done with optimal efficiency.
3) They are well capitalized to develop their IO pipeline now (I'd still expect them to try to sell off 181 perhaps not as much up-front now and more back-ended/label based)!
4) BMY has seen ALL the data which considering the payments pretty much implies the data to date is still continuing to be favorable (if not better).
5) 262+214 will dose the first patient this quarter and have data by year-end. BMY pays 17.5% of that cost (but has no rights to 262).
6) They will add arms to Pivot-02 of Opdivo+Yervoy +214 (Melanoma, NSLC, RCC)
7) Outside of PD-1/PD-L1 NKTR not restricted.
8) PD-1/PD-L1 3 years after closing (or first commercial sale whichever is later) can be combined with other PD-1/PD-L1 if the acquirer has one.
9) Pivot-02 also being expanded for Colorectal and Gastric

8-k: https://www.sec.gov/Archives/edgar/data/906709/000119312518044320/0001193125-18-044320-index.htm
Slides: http://www.nektar.com/application/files/6815/1861/3174/INVESTOR_CALL_FOR_BMS_NEKTAR_COLLABORATION.pdf
Webcast: https://edge.media-server.com/m6/p/td25rezp (Replay wasn't available yet as of this posting)
Nektar Website PR: http://ir.nektar.com/news-releases/news-release-details/bristol-myers-squibb-and-nektar-therapeutics-announce-global

[caravon]

I am not a big fan of BMY but their deal with Nectar is good for them:
- If combo works, BMY gets all revenues from their own drugs and ~35% of the Nectar component plus they will get the equity appreciation having Nectar stocks
- As ENTA shows us, even if a drug sale is great, the sale milestones are just dreams
- BMY's clinical trials expenses will be limited by Nectar contributions

Finally, as the BMY/Imclone deal has shown, BMY is not a viable "stock price validator"