Nektar surges after success of opoid painkiller in Phase 3 study
Shares of Nektar Therapeutics (NKTR) surged in morning trading after the company said that a late-stage trial of NKTR-181, which was previously granted Fast Track designation by the U.S. Food and Drug Administration for the treatment of moderate to severe chronic pain, met the primary and secondary endpoints. PHASE 3 STUDY RESULTS: Nektar Therapeutics announced this morning that NKTR-181, an opoid analgesic, met the primary and secondary endpoints in the SUMMIT-07 Phase 3 study. NKTR-181, Necktar's treatment for pain "without the high levels of euphoria that can lead to abuse and addiction with standard opioids," significantly improved chronic back pain relief compared to placebo, meeting the primary efficacy endpoint. Nektar said the trial also met key secondary endpoints with "high statistical significance." NKTR-181 also demonstrated a favorable safety profile and was well tolerated, Nektar said. The company said the Food and Drug Administration granted the investigational medicine Fast Track designation for the treatment of moderate to severe chronic pain. "The data from this efficacy study are extremely important because they demonstrate that NKTR-181 produces strong analgesia in patients suffering from chronic pain while NKTR-181 has also demonstrated significantly lower abuse potential than oxycodone in a human abuse potential study," said Martin Hale, the clinical investigator of the study and medical director at Gold Coast Research. POSITIVE OUTCOME 'SOMEWHAT OF A SURPRISE': TheStreet's Adam Feuerstein said the positive outcome of the Phase 3 study comes as "somewhat of a surprise" as the drug failed to beat the placebo in a previous Phase 2 study. Feuerstein noted that Nektar will not spend more money on NKTR-181, but said the Phase 3 study should strengthen its plan to outlicense the painkiller to a partner. If completed, Feuerstein said that a deal would create "a nice financial windfall" for the company. ANALYST 'HAPPY TO BE PROVEN WRONG': In a note to clients this morning, Piper Jaffray analyst Joshua Schimmer reiterated his Overweight rating on the stock and raised his price target to $29 from $25, and said that he is "happy to be proven wrong," as he believed prospects of success were very low following the failed Phase 2 study. Schimmer noted that Nektar is one of his top mid-cap biotech stocks for reasons including an emerging immuno-oncology platform and a value support provided by multiple royalty streams from partnered products. PRICE ACTION: Nektar Therapeutics is up about 27% in early trading to $19.64. Shares are up more than 60% year-to-date.