UPDATE: Nektar guts workforce, weeks after $3.6B Bristol Myers immuno-oncology collaboration ends

Nektar is axing 70% of its staff and bidding adieu to top brass amid a strategic reorganization following the decay of the company’s once-historic collaboration with Bristol Meyer Squibb. 

The corporate realignment announced after market-close Monday comes less than two weeks after Nektar and BMS ended their joint immuno-oncology program assessing Nektar’s bempegaldesleukin in combination with BMS’ Opdivo. The decision marked the final act of a modern-day biopharma tragedy after the collaboration was announced in 2018, albeit one that was somewhat expected after the company’s combo failed a phase 3 trial last month.

When the results were announced in March, Nektar CEO Howard Robin was clearly dismayed, describing them as “very upsetting” and “unexpected for all of us.” He also indicated at the time that the results would spurn “substantial changes” to the company, hinting at layoffs. Earlier this month, on April 14, when asked whether layoffs at the company had started, a company spokesperson said “none of those moves have been made to date.” 

Nektar's Chief Medical officer Dimitry Nuyten, Ph.D., will step down from his position to be succeeded by Brian Kotzin, Ph.D., head of immunology, as part of the restructuring. Chief Commercial Officer John Northcott will also depart.  

As part of the reorganization, the company is focusing on its two remaining assets which are targeting a number of indications. NKTR-255, an IL-15 agonist, has become the company’s newest oncology focus as it looks to rebound from bempegaldesleukin. Nektar is taking a shotgun-style approach with this asset, testing it in solid tumors, hematological cancers and genitourinary cancers. The genitourinary program is in phase 2, the furthest along of the three, and is being developed in conjunction with Pfizer and Merck KGaA as a combo therapy with Bavencio. The company will also pursue new development efforts for NKTR-255 as an additive to cell therapy. 

The company is also hoping to maximize its immunology-focused collaboration with Eli Lilly. The partnered drug, NKTR-358, is similarly in development to treat a number of autoimmune inflammatory diseases including two phase 1b trials for atopic dermatitis and psoriasis. The med is also in a phase 2 trial for lupus and ulcerative colitis. Additionally, the company plans to launch another phase 2 trial for a yet-to-be named autoimmune indication. The objective is to reap as many royalty dollars as possible.

In short, Nektar’s short-term future is in the hands of two drugs that are currently being targeted for at least 10 diseases. Beyond that, the company said it’s “currently cultivating several new research programs” including one with Biolojic Design for a bivalent agonistic antibody targeting TNF receptor 2. The company is also not deterred from pursuing additional partnerships, although Robin was candid on the company's investor call about their potential. 

"[W]e have preclinical assets that I think can have value to somebody, although...not as much value upfront as they would if they were further developed," he said. 

As it forges ahead, the company will rely on its most important asset: cash. According to an investor call Monday, the company still has $700 million in cash and investments. The restructuring will extend the company's cash runway into the first half of 2025.

Editor's note: This story was updated with additional editorial including from Nektar's investor call. It also clarifies that Nektar has $700 million in cash and investments, not just cash.