Personal Finance

Here's Why Nektar Therapeutics Fell as Much as 11.1% Today

A scientist at the lab bench with a frustrated look on his face.

What happened

Shares of biopharma Nektar Therapeutics (NASDAQ: NKTR) dropped over 11% today after the company released an abstract to be presented at the American Society of Clinical Oncology annual meeting next month that contained a disappointing update for an ongoing clinical trial.

The latest interim data analysis for a phase 1/2 trial evaluating a combination therapy of the company's drug candidate, NKTR-214, with Opdivo from Bristol-Myers Squibb showed significant drops in response rates compared to those released at the last interim data analysis in November 2017.

As of 12:41 p.m. EDT, the stock had settled to a 10.1% loss. But shares still boast year-to-date gains of 29% following a strong March .

A scientist at the lab bench with a frustrated look on his face.

Image source: Getty Images.

So what

The phase 1/2 trial is evaluating the drug candidate combo against a range of different cancers, including melanoma, kidney cancer, and non-small-cell lung cancer (NSCLC). As reported by FierceBiotech , the overall response rate (ORR) for the NKTR-214 and Opdivo combination has slipped as more patients have been evaluated.

Cancer Type Latest Data Readout, ORR / Patients November 2017 Data Readout, ORR / Patients
Melanoma 52% after 23 patients 63% after 11 patients
Kidney cancer 54% with 24 patients 71% with 13 patients
NSCLC 50% with 6 patients 75% with 4 patients

Source: FierceBiotech.

The combo also achieved an ORR of 75% and 33%, respectively, in three patients with triple-negative breast cancer and four with bladder cancer.

To be fair, response rates of 50% or greater are still pretty solid for a cancer drug combination. But analysts were obviously hoping that the even better response rates from November would hold as the patient population expanded.

Now what

The latest data readout from Nektar Therapeutics is just the most recent example of why size matters when it comes to clinical trials. While Wall Street can sometimes get carried away with what appear to be stellar results in small trials, it's best to wait for response rates to be confirmed in larger patient populations. That said, achieving an ORR of 50% or greater isn't bad, but now the question is: Will that continue to fall even further as the trial expands?

10 stocks we like better than Nektar Therapeutics

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Nektar Therapeutics wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of May 8, 2018

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

NKTR

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More