Almost exactly a year after Nektar Therapeutics jettisoned 70% of its staff, the biotech is now contracting again. This time, 60% of its San Francisco-based workforce is being laid off in a reorganization that will also see the C-suite rejigged and a tighter focus on immunology.
Nektar had held out hopes of finding success in lupus, but those dreams were shattered in February when rezpegaldesleukin flunked a phase 2 trial. It prompted partner Eli Lilly to drop plans for further development in the condition and reassess its next steps in atopic dermatitis.
In a postmarket release yesterday, Nektar said it would prioritize development of the drug, also known as rezpeg. The biotech said it “intends to work with Eli Lilly to ensure the continuation of rezpeg development whether it is under the existing Eli Lilly agreement or Nektar regains the rights.”
The company pointed to phase 1b data from last year to show that rezpeg could induce improvements in eczema severity and itchiness.
“We believe the strong data generated for this asset demonstrates its potential as a remittive therapy in atopic dermatitis and sets the stage to move quickly into a phase 2b study,” CEO Howard Robin said in the release. “Rezpeg would be positioned as a novel potential therapeutic in a significant, growing biologic treatment landscape.”
Nektar’s troubles really started a year ago, when its Bristol Myers Squibb-partnered oncology asset bempegaldesleukin flamed out in phase 3. It prompted Nektar to focus its efforts on rezpeg and a cancer therapy dubbed NKTR-255, while laying off 70% of its workforce.
When it comes to NKTR-255, the company said yesterday that it will continue the phase 2 study of the IL-15 receptor agonist in combination with Bristol Myers Squibb's Breyanzi in large B-cell lymphoma, as well as maintain the therapy’s inclusion in a midstage trial looking at combinations of various drugs with Merck KGaA and Pfizer's Bavencio in bladder cancer. In the meantime, Nektar will “explore strategic partnership options” for NKTR-255.
The company will also continue to develop two preclinical pipeline candidates in auto-immune diseases: a PEG-colony stimulating factor (CSF1) program as well as a TNFR2 agonist antibody being developed in collaboration with Biolojic Design. In 2024, Nektar plans to file an application for at least one of these programs to enter human trials.
In order to “extend considerably” the company’s cash runway through mid-2026, Nektar has decided to reduce its San Francisco-based workforce by approximately 60%, leaving around 55 employees based in the biotech’s headquarters and R&D Center at Mission Bay Boulevard South. Despite the need to reduce the company’s operating costs, Nektar said its Huntsville manufacturing facility is unlikely to lose any staff.
Also leaving their posts are Chief Medical Officer Brian Kotzin, M.D., and Chief Financial Officer Jillian Thomsen. Kotzin will continue to serve as a strategic adviser, although his CMO role will be taken on by Chief Development Officer Mary Tagliaferri, M.D.
Even before the latest restructuring, Nektar’s finances looked reasonably healthy, with $456 million in cash, equivalents and marketable securities to play with as of the end of March. The layoffs should bring in annual savings of around $30 million next year.