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Bristol-Myers, Nektar Tie-Up for Opdivo/NKTR-214 Combo

Zacks Equity Research
Updated

Bristol-Myers Squibb Company BMY announced a clinical collaboration agreement with Nektar Therapeutics NKTR under which Bristol-Myers’ Opdivo will be evaluated in combination with Nektar’s NKTR-214 across five tumor types and seven potential indications.

The collaboration will include phase I/II studies to assess the Opdivo/NKTR-214 combination to demonstrate improved and sustained efficacy and tolerability above the current standard of care in melanoma, kidney, colorectal, bladder and non-small cell lung cancer patients. Initial dose-escalation study on the combination is in progress.

Both companies will share costs of the combination studies equally, while Nektar will retain global commercial rights to NKTR-214.

Opdivo is a PD-1 immune checkpoint inhibitor while NKTR-214 is a CD122-biased agonist. The two different and complementary mechanisms, which comprise the combination regimen, could provide new treatment options for cancer patients.

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We are positive on this deal. Bristol-Myers is collaborating with several other companies for the evaluation of Opdivo in combination with their cancer treatments. This July, Bristol-Myers signed up with AbbVie Inc. ABBV to study Opdivo in combination with AbbVie's Rova-T, for the treatment of relapsed extensive-stage small cell lung cancer.

We note that Opdivo generated worldwide revenues of $1.5 billion in the first half of 2016. Label expansion into additional indications would increase the commercial potential of the drug significantly.

With this deal, Nektar is also gaining a strong partner in the form of Bristol-Myers, a company with expertise in the field of immuno-oncology. Further, Nektar could expedite the development of NKTR-214, which is currently in a phase I/II study, in patients with solid tumors.

While Bristol-Myers is a Zacks Rank #3 (Hold) stock, Nektar carries a Zacks Rank #4 (Sell).

A Stock to Consider

A better-ranked stock in the health care sector is Anika Therapeutics Inc. ANIK, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2016, Anika witnessed a 12.6% increase in its earnings estimates over the past 60 days. It has recorded an average positive earnings surprise of 42.19% over the last four trailing quarters. The company’s shares have jumped 22.1% year to date.

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