Nektar Therapeutics’s Collaboration agreement with Bristol-Myers Squibb


Sidley advised Nektar Therapeutics (Nasdaq:NKTR) on a global strategic development and commercialization collaboration with Bristol-Myers Squibb Company (NYSE:BMY) for Nektar’s CD122-biased agonist, NKTR-214.

Bristol-Myers Squibb Company (NYSE:BMY) and Nektar Therapeutics (Nasdaq:NKTR) have executed a global strategic development and commercialization collaboration for Nektar’s lead immuno-oncology program, NKTR-214. Under the collaboration, the companies will jointly develop and commercialize NKTR-214 in combination with Bristol-Myers Squibb’s Opdivo (nivolumab) and Opdivo plus Yervoy (ipilimumab) in more than 20 indications across 9 tumor types, as well as potential combinations with other anti-cancer agents from either of the respective companies and/or third parties.

NKTR-214, a CD122-biased agonist, is an investigational immuno-stimulatory therapy designed to selectively expand cancer-fighting T cells and natural killer (NK) cells directly in the tumor micro-environment and increase PD-1 expression on those immune cells.

Bristol-Myers Squibb and Nektar have agreed to a joint clinical development plan to evaluate NKTR-214 with Opdivo and Opdivo plus Yervoy in registration-enabling clinical trials in more than 20 indications in 9 tumor types including melanoma, renal cell carcinoma, non-small cell lung cancer, bladder and triple negative breast cancer. Pivotal studies in renal cell carcinoma and melanoma are expected to be initiated in mid-2018.

Under the terms of the agreement, Bristol-Myers Squibb will make an upfront cash payment of $1.0 billion and an equity investment of $850 million (8,284,600 shares of Nektar’s common stock at $102.60 per share). Bristol-Myers Squibb has agreed to certain lock-up, standstill and voting provisions on its share ownership for a period of five years subject to certain specified exceptions.

Nektar is also eligible to receive an additional $1.78 billion in milestones, of which $1.43 billion are development and regulatory milestones and the remainder are sales milestones. Nektar will book revenue for worldwide sales of NKTR-214 andthe companies will split global profits for NKTR-214 with Nektar receiving 65% and Bristol-Myers Squibb 35%. Bristol-Myers Squibb will retain 100% of product revenues for its own medicines. The parties also will share development costs relative to their ownership interest of medicines included in the trials. For trials in the joint clinical development plan that include NKTR-214 with Opdivo only, the parties will share development costs with 67.5% allocated to Bristol-Myers Squibb and 32.5% allocated to Nektar. For trials in the joint clinical development plan that include NKTR-214 with Opdivo and Yervoy, the parties will share development costs with 78% allocated to Bristol-Myers Squibb and 22% allocated to Nektar.

Both Bristol-Myers Squibb and Nektar have agreed for a specified period of time to not commence development with overlapping mechanisms of action in the same indications as those included in the joint clinical development plan. The parties are otherwise free to develop NKTR-214 with their own pipeline assets and/or any other third party compounds. Both parties have agreed to initiate registration-enabling studies in the joint clinical development plan within 14 months of the effective date of the agreement, subject to allowable delays.

Both parties will jointly commercialize NKTR-214 on a global basis. Bristol-Myers Squibb will lead global commercialization activities for NKTR-214 combinations with Bristol-Myers Squibb medicines and Nektar will co-commercialize such combinations in the US, major EU markets and Japan. Nektar will lead global commercialization activities for NKTR-214 combinations with either Nektar medicines and/or other third-party medicines.

For Bristol-Myers Squibb, the transactions are expected to be dilutive in 2018 and 2019 to the company’s non-GAAP EPS by $0.02 and $0.10, respectively. Nektar and Bristol-Myers Squibb currently expect to complete the transaction during the second quarter of 2018, subject to the expiration or termination of applicable waiting periods under all applicable US antitrust laws and the satisfaction of other usual and customary closing conditions. Further details of the agreement can be found in Nektar’s Form 8-K filed today with the Securities and Exchange Commission.

Nektar Therapeutics is a clinical-stage biopharmaceutical company which develops a pipeline of drug candidates that utilize company platforms. The company, led by Howard W Robin, Gil M Labrucherie and John L Nicholson, is based in San Francisco (CA).

Sidley partner, Joshua Hofheimer (Picture), led the Sidley team in drafting and negotiating the strategic collaboration agreement. Sidley partners Ruchun Ji and Sam Zucker led the equity investment and corporate governance work, and they were supported by counsel Lauren Grau (Dallas), and associates Feifei Bian (Century City), Deepa Rich (Palo Alto), Lori Trujillo (Los Angeles), Nathan Wenk (Palo Alto), and Chen Chen (Palo Alto). Partners Torrey Cope (Washington, D.C.) and Meenakshi Datta (Chicago) advised on the FDA and regulatory issues, with support from associate Meghan Weinberg (Washington, D.C.). Senior Counsel Marc Raven (Chicago) and associate Miriam Carroll (Washington, D.C.) are handling the Antitrust aspects of the transaction.

Involved fees earner: Joshua Hofheimer – Sidley Austin LLP; Sam Zucker – Sidley Austin LLP; Ruchun Ji – Sidley Austin LLP; Feifei Bian – Sidley Austin LLP; Deepa Rich – Sidley Austin LLP; Chen Chen – Sidley Austin LLP; Lauren Grau – Sidley Austin LLP; Torrey Cope – Sidley Austin LLP; Meenakshi Datta – Sidley Austin LLP; Meghan F. Weinberg – Sidley Austin LLP; Lauren Grau – Sidley Austin LLP; Lori Trujillo – Sidley Austin LLP; Nathan Wenk – Sidley Austin LLP; Marc Raven – Sidley Austin LLP; Miriam Carroll – Sidley Austin LLP;

Law Firms: Sidley Austin LLP;

Clients: Nektar Therapeutics;

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Author: Ambrogio Visconti