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Advisory Panel Generally Positive For Nektar Therapeutics

Advisory Panel Generally Positive For Nektar Therapeutics

On June 19 and 20, the FDA held an advisory panel for peripherally acting, mu opioid receptor antagonist class of drugs. This includes naloxegol (now known as Movantik), which Nektar has partnered with AstraZeneca to develop for opioidinduced constipation. Our thoughts on the panel discussion and its implications for naloxegol are below:

Our take on the advisory panel is positive, highlighted by the committee s recommendation that cardiovascular outcomes trials are not necessary for the class of drugs. Going into this event, investors were concerned that results from cardiovascular outcomes trials would be necessary for mu opioid antagonists before regulatory approval and commercialization. However, at today s meeting, the majority of the panel members voted that cardiovascular outcomes trials should not be required for the mu opioid antagonist class of drugs.

Notably, a handful of panel members voted that post-marketing studies would be sufficient and appropriate to further characterize the benefit-risk profile of this class of compounds. We believe a positive vote is an encouraging development for Movantik, and is supported by Movantik s unique chemical properties and extensive Phase III program, which included approximately 2,400 patients and safety data with daily dosing for one year.

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We believe today s news reduces the regulatory risk with Movantik ahead of regulatory decisions expected in the United States and Europe during the second half of this year, and we note there are significant milestone payments associated with these events. In the United States, the regulatory decision date is expected to be on September 16, an approval will result in a $100 million payment. In parallel, an approval in Europe will trigger a $40 million payment.

Opioid-induced constipation is an attractive market opportunity and could provide a meaningful financial contribution to Nektar. With more than 250 million prescriptions written for opioids each year in the United States, and about half of the patients experience opioid-induced constipation, we estimate that there are 11 million people in the United States who can potentially benefit from Movantik (exhibit 2). Given the prevalence of opioid use especially in the United States, we believe Movantik could potentially serve a significant patient population. As a result, we conservatively estimate Nektar deriving sales from Movantik starting in 2015 with $22 million increasing to $68 million for 2016.

Advisory Panel Generally Positive For Nektar Therapeutics

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