Mizuho analyst Difei Yang upgraded Nektar Therapeutics to Buy from Neutral with a price target of $35, up from $21. The shares closed Friday down 40c to $19.89. The analyst sees a "good risk/reward" going into 2020 and 2021 with key pivotal Phase 3 readouts in melanoma and bladder cancer indications starting in Q4 of this year. Nektar's available data in melanoma and bladder looks superior based on complete response rates to the standard of care Opdivo/Yervoy, Yang tells investors in a research note. Multiple IL-2 programs are currently in development and recent deal activity suggests strong interest in cytokines such as IL-2, adds the analyst. Yang believes Nektar is in a "prime position" in this field with clinical data supporting the potential of engineered IL-2 in immuno-oncology. Further, manufacturing issues are likely behind the company while investor sentiment on the bempegaldesleukin program "remains quite skeptical," says the analyst.

Biolojic Design announced that Nektar exercised its license option to develop a program resulting from the companies' research collaboration initiated in 2021. The research collaboration was established to design and test agonistic antibodies targeting tumor necrosis factor receptor type II, a novel, biologically-validated disease target implicated in a wide range of autoimmune diseases that has been difficult to drug with conventional medicines. The antibody program selected for development is designed to modulate the TNFR2 pathway in order to agonize - or activate - T regulatory cells and other anti-inflammatory cell populations, making this a promising approach to stimulating the immune system in ulcerative colitis, multiple sclerosis, vitiligo, and other autoimmune disease states. Under the 2021 research agreement, Nektar has tested antibodies computationally designed by Biolojic Design to precisely agonize the TNFR2 receptor. Following successful preclinical in vitro and in vivo studies, Nektar decided to exercise the license option and has been advancing the program through IND enabling studies since late December, 2023. If the NKTR-0165 candidate proceeds through clinical development, Biolojic Design is entitled to development milestones and sales royalties.