Nektar's plans to buy PureTech confirmed, offering potential lifeline for the former BMS partner

Salvation may be on the horizon for Nektar Therapeutics, months after persistent clinical losses resulted in the end of its multi-billion-dollar deal with Bristol Myers Squibb and significant layoffs.

PureTech Health has ended “speculation” by confirmed Friday morning that it is indeed in talks to be acquired by Nektar. So far the two have discussed “indicative, non-binding proposals” that remain ongoing, PureTech said in an SEC filing. 

The company noted that an offer for its share capital may be included in the discussions, “among other things.” Nektar has until 5:00 p.m. on November 3 to make a firm offer, barring an extension by the takeover panel. 

The acquisition could be welcome news for Nektar after the company’s partnership with BMS went up in flames earlier this year following consecutive clinical losses. The potential $3.6 billion deal was one of the largest recorded partnerships when it was announced in 2018, but the big pharma pulled the plug in April after seeing enough of Nektar's IL-2 agonist bempegaldesleukin. Weeks later, Nektar let go of 70% of its staff and saw the exits of Chief Medical officer Dimitry Nuyten, Ph.D. and Chief Commercial Officer John Northcott. 

Buoying Nektar’s future has been its gargantuan cash reserves, which totaled $628.2 million at the end of June, according to the company’s second-quarter earnings report—enough to fund operations into 2025. Without bempeg, the company’s pipeline had shrunk to two critical programs: IL-15 agonist NKTR-255 and Lilly-partnered autoimmune med NKTR-358. 

In London-based PureTech, Nektar would have a subsidiary with a proven—and recent—track record of successful spinoff companies. Arguably the most prominent of PureTech’s “founding entities” is Karuna Therapeutics, which recently announced positive phase 3 data of its schizophrenia drug, teeing up a 2023 approval filing with the FDA. The company also has 14.7% equity in Akili Interactive, a digital health company with an FDA-approved video game (yes, you read that correctly) to help ADHD in kids. Akili and Karuna are two out of four publicly traded companies founded by PureTech, with a combined value of over $9 billion. 

But PureTech’s own pipeline has not fared quite as well as some of its business bets. In June, the company axed development of its long COVID program, which was testing a deuterated form of Roche’s pulmonary fibrosis med Esbriet. That same med, deupirfenidone, is also in a phase 2 trial for idiopathic pulmonary fibrosis. PureTech expects topline results from that trial by the end of 2023. 

The dilemma for PureTech has been that as its founding companies grow and dilute themselves, the company loses its financial stake, putting increased pressure on its own pipeline to make money. Until then, the company said that it would try and finance itself through “collaborations with third parties” and “public or private equity” among other sources. As of the end of June, the company had $341.4 million in cash on hand.