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Lilly pays Nektar $150m upfront for phase I autoimmune drug

Will add another $250m if candidate meets development objectives

eli Lilly

Eli Lilly has agreed a bolt-on deal with Nektar Therapeutics, adding an interleukin-2 (IL-2) stimulating drug called NKTR-358 - with potential in autoimmune diseases - to its pipeline.

The US big pharma company is paying $150m upfront for rights to NKTR-358, with another $250m in the offing if the candidate meets development objectives. It's a heavily front-loaded deal for an early-stage candidate, which only started dosing in a phase I single ascending dose trial in March.

The drug targets the IL-2 receptor complex and - according to its developer - stimulates the production of regulatory T cells that help keep the immune system in check. It has the potential to be a first-in-class therapy for the millions of people around the world with autoimmune diseases such as lupus, Crohn’s disease, psoriasis and rheumatoid arthritis.

"By activating these cells, NKTR-358 can act to bring the immune system back into balance," says Nektar. "This could lead to a profound clinical impact and healthy organ function in autoimmune conditions."

Earlier this month, Nektar presented data at the Annual World Congress on Inflammation showing that treatment with NKTR-358 induces profound regulatory T cell effects and suppresses inflammation in multiple preclinical models.

If borne out in future studies, the approach could be a profound departure from the current approach to treating autoimmune diseases, which typically involves dampening down the immune response in a broad fashion and can lead to complications such as infections and malignancies.

Under the terms of the deal, Nektar will be wholly responsible for early-stage development of the new drug candidate, and Lilly will contribute 75% of the phase II development funding. Nektar has the option to participate in phase III development - on an indication-by-indication basis - as well as an option to co-promote in the US.

A second phase I trial looking at multiple ascending doses of the drug, which may be given every two or four weeks, is scheduled to get underway before the end of the year.

Evercore analyst Umer Raffat said that NKTR-358 could be a potential treatment for Lupus, Crohn's disease, ulcerative colitis, rheumatoid arthritis and perhaps even multiple sclerosis, graft-versus-host disease and type 1 diabetes - which would explain the high upfront fee and generous double-digit royalties if Nektar signs up for phase III involvement.

With Lilly, Nektar gets a partner with a growing portfolio in immunology, with new IL-17 inhibitor Taltz (ixekizumab) approved for psoriasis in its first markets and JAK inhibitor Olumiant (baricitinib) for rheumatoid arthritis cleared in Europe but knocked back by the FDA in April.

Following after in Lilly's pipeline are follow-up indications for baricitinib (atopic dermatitis and lupus), IL-23 blocker mirikizumab for psoriasis and BTK inhibitor LY3337641 for rheumatoid arthritis, all at the phase II testing stage.

The deal is also the latest in a series of positive developments for Nektar, which recently reported positive results with its mu opioid agonist painkiller NKTR-181, setting up a possible FDA filing, and deals with Bristol-Myers Squibb and Takeda on immuno-oncology candidate NKTR-214.

Article by
Phil Taylor

25th July 2017

From: Research

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