Fresh layoffs at Nektar Therapeutics as it drops lupus program after phase 2 disappointment

By Jonathan Smith

- Last updated on GMT

Nektar will shelve development of Rezpeg in lupus; instead switching focus to the treatment of atopic dermatitis. Pic:getty/elsemelwe
Nektar will shelve development of Rezpeg in lupus; instead switching focus to the treatment of atopic dermatitis. Pic:getty/elsemelwe

Related tags Autoimmune Lupus Eli lilly

Following a recent phase 2 failure, the San Francisco-based biotech company Nektar Therapeutics has slashed its workforce and axed the development of the protein drug rezpegaldesleukin (Rezpeg) for the treatment of the autoimmune disease systemic lupus erythematosus (SLE).

Rezpeg partnership beset by lupus flop

Rezpeg is designed to tackle autoimmune and inflammatory diseases by increasing the activity of regulatory T cells, which typically prevent the immune system from attacking the wrong targets.

Nektar teamed up with Eli Lilly to co-develop Rezpeg in immunological indications in 2017. However, Lilly handed back the development rights to the drug in SLE to Nektar when the candidate failed to hit its main goal in a phase 2 trial in February 2023, leading Nektar’s stock price to plunge by more than 30%. The partners said they would also discuss the future of other Rezpeg programs, such as for the treatment of the skin condition atopic dermatitis.

Nektar’s new pipeline plan

In its latest announcement, Nektar has decided to shelve the development of Rezpeg in SLE. Instead, Nektar aims to switch focus to the development of Rezpeg to the treatment of atopic dermatitis, which has shown promise in a phase 1b trial. Meanwhile, the company would continue the development of two preclinical-stage candidates in immunology.

"Following a comprehensive review of our portfolio, we have made the decision to prioritize the advancement of our immunology programs," said Howard W. Robin, President and CEO of Nektar, in a press release.

"We intend to work with Eli Lilly either to continue Rezpeg’s development in the clinic under our existing agreement or to regain the rights to Rezpeg for Nektar. 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. Rezpeg would be positioned as a novel potential therapeutic in a significant, growing biologic treatment landscape."

In addition, Nektar will continue the development of a biologic cancer treatment candidate called NKTR-255, which is designed to activate anti-tumor activity in the immune system. The candidate is in phase 2/3 testing for the treatment of blood cancer in combination with cell therapies and in a phase 2 trial for the treatment of locally advanced or metastatic urothelial carcinoma, partnered with Merck KGaA and Pfizer. Nektar will also seek out a partner company to support the development of NKTR-255.

Management changes and layoffs

Nektar is also aiming to extend its cash runway into the middle of 2026 by cutting operating costs and slashing its workforce in San Francisco by 60% down to around 55 employees. The company added that its manufacturing facility in Huntsville will continue with the same staff.

Once the restructuring is complete by June 2023, Nektar aims to better conserve its cash stockpile, which totals approximately $456m as of March 31, 2023, and reduce annual spending by around $30m.

At the same time, Nektar revealed the departures of several of its current management team, including its Chief Medical Officer, Chief Financial Officer and SVP of Technical Operations.

These changes come just a year after Nektar laid off more than 500 employees in 2022. This was prompted by the failure of Nektar’s cancer drug candidate bempegaldesleukin to hit the main goals in several late-stage clinical studies, leading Nektar to abandon clinical development of the drug.

Difficulties in treating SLE

In SLE, the immune system attacks healthy tissue in the body, affecting body parts including the joints, skin, brain, lungs, kidneys, and blood vessels. The incurable condition can be managed with the use of immunosuppressive drugs such as corticosteroids, but these impact the whole immune system and can cause unpleasant side effects.

In 2011, the U.S. Food and Drug Administration (FDA) approved the first new SLE treatment in more than 50 years: GSK’s belimumab (Benlysta). Ten years later, AstraZeneca’s candidate anifrolumab-fnia (Saphnelo) also got the U.S. FDA green light​ in SLE. These antibody drugs are designed as more targeted therapies than traditional approaches, improving the quality of life for patients.

However, there is a lot of variation​ in the pathology of SLE patients, meaning that there are still many patients that need additional treatment options. In between the sparse new drug approvals for SLE, there have also been many late-stage clinical trial failures​, with examples including epratuzumab, baricitinib and ustekinumab.

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