Updated: January 16, 2020
Status: Ongoing Case
Nektar Therapeutics is a research-based biopharmaceutical company that discovers and develops innovative medicines. Nektar’s research and development pipeline of new investigational drugs include treatments for cancer, autoimmune disease, and chronic pain. NKTR-214 is the Company’s flagship immune-oncology candidate. NKTR-214 is a form of recombinant Interleukin-2 (“IL-2”), a naturally occurring cytokine that was approved for treating cancer in 1992. By binding with the IL2Rβγ receptor, IL-2 stimulates proliferation and growth of tumor-killing immune cells. Along with its partner Bristol-Myers Squibb, Nektar is developing NKTR-214 with nivolumab, a Bristol-Myers drug marketed as Opdivo, in 9 tumor types in over 20 trials. IL-2 has a short half-life, and Nektar hypothesized that IL-2 could be improved by adding polyethylene glycol molecules to it (i.e., “pegylating” it), ultimately extending the drug’s half-life.
The Action alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) prior studies which attempted to pegylate IL-2 failed; (2)NKTR-214’s extended half-life was unlikely to result in efficacy and created additional high-dosing safety concerns; (3) NKTR-214 was less effective than IL-2 alone; and (4) the combination ofNKTR-214 with nivolumab has not yet demonstrated significant positive results.
The truth concerning NKTR-214’s efficacy was revealed on October 1, 2018, when Plainview LLC published a report titled “NKTR- 214: Pegging the Value at Zero.” According to Plainview LLC, “the anticipated benefits did not materialize and pegylation [ ] proved to be a drag on [NKTR-214’s] efficacy.” Plainview claimed that the extended half-life has become a problem and that Nektar’s own study “showed that pegylation severely hinders NKTR-214’s ability to bind with the target IL2Rβγ receptors.” Notwithstanding NKTR-214’s failed half-life proposition, the report also asserted that the core concept of Nektar’s plan to develop NKTR-214 into “a new universal cancer treatment” “has never worked in practice,” and that Nektar’s decision to only disclose certain trial results represented “an unprecedented level of data opacity.” In response to this news, Nektar’s stock price fell $5.63 per share or 9.24 percent over two trading sessions, closing at $55.33 per share on October 2, 2018.
The case is captioned Mulquin v. Nektar Therapeutics, No. 18-cv-6607 (N.D. Cal.). Labaton Sucharow serves as sole lead counsel representing lead plaintiffs Oklahoma Firefighters Pension and Retirement System and El Paso Firemen & Policemen’s Pension Fund and the class.
Lead plaintiffs filed their consolidated complaint on May 15, 2019. Defendants filed a motion to dismiss the consolidated complaint, with briefing completed on October 15, 2019. The Court vacated the oral argument on the motion to dismiss scheduled for November 7, 2019, taking the pending motion to dismiss filings under submission. The Court’s decision is pending.