Lilly pays Nektar $150M upfront to buy into phase 1 drug with broad immune and inflammatory applications

Eli Lilly's headquarters

Eli Lilly has paid Nektar Therapeutics $150 million to codevelop NKTR-358. The outlay gives Lilly the rights to a drug designed to treat autoimmune diseases by boosting the number and activity of regulatory T cells (Tregs). 

Lilly has committed to up to $250 million in development and regulatory milestones on top of its hefty upfront fee. The deal tasks Nektar with guiding the regulatory T-cell stimulator through phase 1, after which Lilly will step up its involvement. Lilly will cover 75% of the cost of phase 2. Nektar has the option to participate in phase 3 development on an indication-by-indication basis in return for a rise in its royalty rate.

The structure of the deal reflects Nektar’s belief in the potential of the candidate. Nektar wants to play an active role in development of NKTR-358 because it thinks the drug can reshape treatment in up to 10 disease areas. If that forecast is even partly realized, the meaty double-digit royalties Nektar will secure by participating in development could bring in serious sums of money.

That is a long way off. But by persuading Lilly to pay $150 million upfront for a drug that is yet to deliver data in humans, Nektar has shown excitement about the program extends beyond its walls.  

Excitement about NKTR-358 at Nektar has ratcheted up as researchers have generated preclinical data. The data suggest NKTR-358 preferentially increases the number and activity of Tregs without having a significant effect on non-Tregs. And that it suppresses antigen-driven inflammation in mice and primates. 

This is significant for patients with autoimmune diseases as these conditions are associated with depleted numbers or activity of Tregs. The lack of effective Tregs means immune regulation is weakened, leading to autoimmunity. 

If NKTR-358 can give patients a Treg profile more like that of a healthy person, it may treat an array of immune disorders by fixing the underlying regulatory dysfunction. This would be an advance over drugs sold today, which use mechanisms such as global immunosuppression to treat autoimmune symptoms without tackling the cause of the disease. 

The root-cause approach taken by NKTR-358 could improve outcomes for patients and ensure Lilly and Nektar can aim the drug at a huge number of patients. Nektar sees NKTR-358’s Treg-boosting activity potentially helping patients with lupus, inflammatory bowel disease, rheumatoid arthritis, psoriasis, type 1 diabetes, multiple sclerosis, psoriasis and allergy.

Nektar put lupus at the top of its hit list when it plotted out a clinical development program that leads from the ongoing study in healthy volunteers into a multiple ascending dose trial in patients with the disease. But the biotech always saw the indication as the first of many, hence its desire to sign up a partner with deep pockets and autoimmune experience.  

With Lilly filling that role, Nektar is now set to find out whether NKTR-358 can live up to the weighty expectations it has put on the drug.