Shares of Nektar Therapeutics (NKTR) plummeted more than 30% in after-hours trading on Thursday, following the biopharma company’s announcement that a study had failed to meet its goals and that partner Eli Lilly & Co. (LLY) had decided not to proceed with a Phase 3 development of the investigational treatment known as REZPEG.
The study had been looking into REZPEG as a potential treatment for severely active lupus in adults who had not responded to standard treatments. Nektar and Lilly stated that they plan to work together to determine the next steps for the planned Phase 2b study in atopic dermatitis.
Nektar’s stock has been on a roller coaster ride in 2020, with the company’s shares falling more than 30% in the past three months. The company’s stock had been on the upswing in the last two weeks, however, as investors anticipated positive news from the REZPEG study.
Nektar’s shares had gained more than 10% in the past two weeks, as investors had expected the REZPEG study to produce positive results. Unfortunately, the study failed to meet its goals, sending the stock down sharply in after-hours trading.
The news was a major blow to Nektar, as the company had been banking on a successful outcome from the study. The company had been hoping that the investigational treatment would provide a new option for lupus patients who had not responded to standard treatments.
The news was also a setback for Eli Lilly, as the company had been counting on the success of the REZPEG study to expand its lupus portfolio. Eli Lilly’s shares edged 0.2% higher in after-hours trading, however, suggesting that investors were not overly concerned about the setback.
Nektar and Eli Lilly will now have to work together to determine the next steps for the planned Phase 2b study in atopic dermatitis. It remains to be seen whether the two companies will be able to find a way to move forward with the study, or if the setback will prove to be too great for them to overcome.
Overall, the news was a disappointment for Nektar and Eli Lilly, and a major blow to investors who had been expecting a successful outcome from the REZPEG study. The setback will likely have a negative impact on Nektar’s stock in the short term, as investors digest the news and try to determine the company’s next steps. It is possible, however, that Nektar and Eli Lilly will be able to find a way to move forward with the study, and that the setback will eventually prove to be a minor hiccup in the long run.
