Four years after clinical failures sparked a convulsive restructuring that cost the company nearly 700 jobs, followed by a pivot to inflammatory skin diseases, Nektar Therapeutics (NASDAQ: NKTR) found some vindication this past week when it announced positive mid-stage data for its lead pipeline candidate in atopic dermatitis (AD), fueling a near doubling of its stock price.
Nektar shares have zoomed 92% over the four trading days since it announced positive data from the 36-week blinded maintenance period of the 52-week Phase IIb REZOLVE-AD trial (NCT06136741) assessing rezpegaldesleukin (rezpeg) in patients with moderate-to-severe atopic dermatitis (AD). Rezpeg is designed to work by targeting interleukin-2 receptors located on regulatory T cells (Tregs).
Among 55 patients dosed at 24 µg/kg every month, 71% (36) achieved Eczema Area Severity Index (EASI) percent score reductions of at least 75% (EASI-75). Half those patients (18, or 80%) achieved EASI-90. The percentage climbed to 83% among the 56 patients receiving the same dosage of rezpeg every three months. Of those, 63% (21) maintained validated Investigator Global Assessment of Atopic Dermatitis (vIGA-AD) 0/1 response after quarterly dosing, as did 85% (14) of patients dosed monthly.
Perhaps most encouraging to patients, 75% (25) of patients dosed monthly stopped itching—a percentage that rose to 77% (17) among those who were dosed every quarter. Based on the positive maintenance data, Nektar said it plans to launch a Phase III trial of rezpeg in AD later this year, with the goal of submitting a Biologics License Application (BLA) in 2029.
Nektar has reached an agreement with the FDA on an induction dose of 24 µg/kg every two weeks over 24 weeks, followed by a maintenance study assessing monthly and quarterly dosing, plus testing drug withdrawal to placebo in parallel.
“It’s a real comeback story for us, I think, to see where we are,” Jonathan Zalevsky, PhD, Nektar’s chief research and development officer, told GEN. “And I think the data that we have shown, I think that really set a new bar.”
Cashing in
Nektar quickly cashed in on its success by carrying out a $460 million underwritten public offering that closed Friday. According to the prospectus, the net proceeds are intended for “general corporate purposes, which may include research and development, clinical development (including Phase III trials for rezpegaldesleukin), and manufacturing costs to support the advancement of our drug candidates.” Nektar sold 7,637,931 shares of common stock, including 1,034,482 shares sold upon exercise in full by the underwriters of their option to purchase additional shares, plus 293,103 pre-funded warrants.
Nektar and its investors benefited from that bounceback, as the stock started this past week (February 9) at $37.07, around the mid- to high-$30 range where shares had been trading since the start of this year. The day of the data announcement (Tuesday) finished with Nektar shares rocketing 51% to an even $56. From there, shares jumped 18.5% to $66.35 on Wednesday, climbed another 7% to an even $71 on Thursday, then finished the week on Friday, inching up 0.5%, closing at $71.33.
Nektar’s sweet comeback story started with a series of clinical setbacks that began in 2022. At the time, Nektar had anchored its pipeline on bempegaldesleukin (bempeg), a cancer drug it was co-developing with Bristol Myers Squibb (NYSE: BMY; BMS). In March 2022, BMS joined Nektar to announce that bempeg failed three clinical trials comparing the drug plus BMS’ cancer immunotherapy Opdivo® (nivolumab) to Opdivo alone in three types of cancer: First-line treatment for previously untreated unresectable or metastatic melanoma (Phase III PIVOT IO-001; NCT03635983); renal cell carcinoma (Phase III PIVOT-09, NCT03729245); and bladder cancer (Phase II PIVOT-10, NCT03785925).
Bempeg was a first-in-class, CD122-preferential IL-2 pathway agonist designed to trigger rapid activation and proliferation of cancer-killing CD8+ effector T cells and natural killer (NK) cells, all without overactivating the immune system. The triple failure led Nektar in April 2022 to chop 70% of its workforce, shriveling from 735 to 225 employees.
Second round of layoffs
Nearly a year later, Nektar eliminated another 60% of its workforce, shriveling further to roughly 55 employees, after the failure of rezpeg in another indication partnered with another pharma giant.
In February 2023, rezpeg failed the Phase II ISLAND trial (NCT04433585) in its initial development indication of moderately-to-severely active systemic lupus erythematosus (SLE), leading partner Eli Lilly (NYSE: LLY) to halt its collaboration immediately in that indication. Two months later, Lilly handed back to Nektar all rights to rezpeg (which Lilly labeled LY3471851) in all indications, including AD and psoriasis. That ended a collaboration launched in 2017, when Lilly agreed to pay Nektar $150 million upfront and up to $250 million tied to achieving development and regulatory milestones toward rezpeg, then called NKTR-358.
Nektar responded to the termination in August 2023 by suing Lilly in U.S. District Court for the Northern District of California in San Francisco, alleging breach of contract and breach of implied covenant of good faith and fair dealing: “This case involves the all-too-familiar story of a large pharmaceutical company elevating profits over all else,” Nektar stated in its initial complaint.
In that complaint, Nektar asserted that Lilly failed to recruit enough patients for the ISLAND trial in lupus, leading to its failure. Nektar also alleged that Lilly incorrectly calculated data from the companies’ AD and psoriasis trials of rezpeg that was presented at the 2022 European Academy of Dermatology and Venereology (EADV) Congress; Lilly has denied the allegations and tried to get Nektar’s lawsuit dismissed—but when it couldn’t do so, it counter-sued, alleging breach of specified confidentiality provisions and defamation.
A jury trial was supposed to start on October 27, 2025, but was postponed due to the federal government shutdown, and has since been rescheduled to September 8, with a pretrial conference set for August 13. The case, Nektar Therapeutics v. Eli Lilly & Co (3:23-cv-03943), has been assigned to Judge James Donato, who was appointed by President Barack Obama and confirmed by the U.S. Senate in 2014.
“In May 2023, after rezpeg failed to meet its primary endpoints in two separate Phase II trials, Lilly terminated its collaboration with Nektar and returned the rights to rezpeg at Nektar’s request. Our decision was consistent with Lilly’s normal practices and was made following a review of the compound’s competitive profile, including a high incidence of injection site reactions, which were also reflected in Nektar’s REZOLVE-AD trial,” Lilly told GEN through a spokesperson.
“The litigation between Lilly and Nektar remains ongoing, and we stand behind our decision to terminate the collaboration,” Lilly added.
“Very encouraging” early data
In announcing the lawsuit against Lilly, Nektar also released “new and corrected” data from its Phase I AD study with Lilly showing that 12 weeks of rezpeg at the high 24 µg/kg dose resulted in a mean improvement in EASI score of 83% (vs the originally reported 66% score), and an EASI-75 response rate of 41% (up from 29% in the original data) for placebo patients. Rezpeg also showed a more rapid and steep drop in EASI scores immediately after initiation of therapy than previously reported data and maintained the efficacy benefit for 36 weeks without additional treatment after the 12-week induction period, Nektar said.
“We were seeing at the time some very encouraging, very early data from the program, so we knew that rezpeg was a key asset that came out of our research labs, out of our early clinical laboratory development, and our expertise in the understanding of immune biology,” Zalevsky recalled. “So we decided that we were going to focus around that program. We added additional programs in the preclinical stage since then that also target the I&I [immunology and inflammation] space.
“Having the early Phase I clinical successes in the program and then being able to build off of those successes, that’s really how we redeployed the resources of the company. We had to shrink down and focus,” he added. “These are never easy decisions.”
Nektar says rezpeg is a first-in-class therapeutic designed to target the CD25 sub-receptor in the IL-2 receptor complex to stimulate proliferation and growth of Tregs. By activating these cells, Nektar reasons, rezpeg could restore balance between Tregs and effector T cells (Teffs) and thus address the underlying immune system imbalance seen in many autoimmune and inflammatory conditions.
Last June, Nektar announced data from the 16-week induction period of REZOLVE-AD showing that rezpeg achieved statistical significance on the primary endpoint at week 16 for mean percent change in EASI score from baseline for all rezpeg arms vs. placebo. The percentages ranged from 53% for 110 patients low-dosed at 24 µg/kg every four weeks, rising to 58% for 106 patients at the middle dose of 18 µg/kg every two weeks, to 61% for the 104 patients at the high dose of 24 µg/kg every two weeks.
“A real mechanism of action”
“It showed that this is a real mechanism of action. It validated, really, that you could use regulatory T cells as a therapeutic approach in inflammatory skin disease like atopic dermatitis, and it really built on all of the experience we’d had in the program up to that point,” Zalevsky said.
Last November, Nektar presented further data from REZOLVE-AD at the American College of Allergy, Asthma & Immunology (ACAAI) 2025 Annual Scientific Meeting showing that in the high dose of 24 μg/kg every two weeks treatment arm, 75% of patients with uncontrolled asthma at baseline showed a clinically significant improvement (≥0.5 points reduction) in the Asthma Control Questionnaire-5 (ACQ-5) at week 16.
The only other biologic drug to show effectiveness in AD and asthma is the longtime leading AD treatment Dupixent® (dupilumab), co-marketed by Regeneron Pharmaceuticals (NASDAQ: REGN) and Sanofi (Euronext Paris: SAN). Dupixent generated a combined $17.807 billion in net product sales last year ($13.187 billion by Regeneron, the rest by Sanofi), but its first U.S. patents are set to expire next year, with key patents expiring in 2030-2031.
Rezpeg also showed effectiveness in a key third measure—reducing itch among patients.
“It really, we believe, reflects the biology of how Tregs work,” Zalevsky said. “The biology of Tregs is such that when they marginate traffic through the body, they occupy the tissues where they’re supposed to go to, where their signals draw them to, and where their adhesion receptors make them stick. Then they can live there and persist for a long time.”
That’s a distinguishing feature of rezpeg vs. several other classes of inhibitors, such as inhibitors of Janus kinases (JAKs), IL-4, and/or IL-13, both linked to reports of a greater incidence of conjunctivitis, he added.
Zalevsky was corresponding author of a 2024 paper published in Nature Communications, in which a research team reported that rezpeg “modulated multiple immunoregulatory pathways, including those involving Treg function, immunosuppressive cytokines such as IL-10, ectodomain shedding of immunomodulatory proteins, antigen recognition and major histocompatibility complex (MHC) binding, anti-microbial pathways, cell adhesion and migration, and antagonism of Th2 polarization.”
“Scientifically, it all makes sense, because we know Tregs can employ many, many mechanisms to resolve information, and we think this is one of the unique features of rezpeg,” Zalevsky said. “Our hypothesis with this always was that we wouldn’t just be targeting the symptom of the disease, but the underlying pathology of the disease.”
Three indications
AD is the lead of three indications for which rezpeg is being developed; the other two are alopecia areata (AA) and type 1 diabetes. “We do have to be very laser-focused since we’re still a small company. However, we know that there is a tremendous opportunity in alopecia areata,” Zalevsky explained.
In AA, where rezpeg is in a Phase IIb trial in severe to very severe disease (NCT06340360), Nektar plans in the second quarter to read out data from the completion of the study’s 52-week treatment portion, followed in December by Phase II proof of concept results.
At present, only three JAK inhibitors are approved in AA: Olumiant® (baricitinib), which is licensed by Lilly from its discoverer Incyte (NASDAQ: INCY); Litfulo® (ritlecitinib), marketed by Pfizer (NYSE: PFE); and Leqselvi® (deuruxolitinib), marketed by Sun Pharmaceutical Industries (NSE: SUNPHARMA and BSE: 524715). Nektar sees a huge opportunity for a biologic in AA, reasoning that while JAK inhibitors can regrow hair in a proportion of people, that regrowth would stop if treatment were ended. The JAK inhibitors have also been linked to increased risk of adverse reactions that have resulted in “black box” warning labels.
“There is a huge white space opportunity for a biologic in this field [AA],” Zalevsky said. “One of the things that we see as a real opportunity with rezpeg is that we have the potential to have durability of effectiveness. And if we see that in alopecia, that’s completely transformational.”
In type 1 diabetes, rezpeg is under study by the NIH’s National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) in a Phase II trial (NCT07142252) in 66 patients within 100 days of diagnosis. They will be randomized to rezpeg or placebo once every 14 days over 26 weeks with an additional six-month follow-up period. The trial’s estimated primary completion date is May 13, 2028, though Nektar says some early data from that study may emerge in 2027.
As for the lead program in AD, given Nektar’s plans to advance that program into Phase III, the company anticipates adding to its current staff of 60–65.
“We would need to grow in size. Our staff needs to grow,” Zalevsky said. “It’s much, much, much more work to execute all of the clinical development trials and pivotals and all of the CMC [chemistry, manufacturing, and controls] work, and everything that goes into the BLA. Definitely, we’d have to scale up a little bit.”
Leaders and laggards
- Evommune (NYSE: EVMN) shares rocketed 71% from $16.99 to $29.03 Tuesday, after the chronic inflammatory disease drug developer announced positive topline results from its placebo-controlled Phase IIa trial (NCT06723405) assessing EVO301 in moderate-to-severe atopic dermatitis. EVO301 met its primary endpoint by achieving rapid and statistically significant reductions in Eczema Area and Severity Index (EASI) at weeks 4, 8, and 12 vs. placebo, with 33% placebo-adjusted improvement in EASI at week 12. Also, 23% of patients treated with EVO301 (vs 0% placebo) achieved vIGA-AD 0/1 (percent of patients achieving a score of 0 or 1 on the validated Investigator’s Global Assessment for Atopic Dermatitis with ≥ 2-point reduction from baseline) at week 12. EVO301 is a long-acting injectable SAFA-IL-18BP fusion protein consisting of an interleukin-18 (IL-18) binding protein and an anti-serum albumin Fab-associated domain. “These data support our plans to move EVO301 into a Phase IIb dose-ranging trial,” Evommune president and CEO Luis Peña stated.
- ICON (NASDAQ: ICLR) shares nosedived 40% from $133.14 to $80.08 Thursday—the biggest one-day decline since 1999—after the clinical research organization (CRO) withdrew its guidance for 2026 and acknowledged that an ongoing internal investigation found its revenue for 2023 and 2024 “may have been overstated” by less than 2% each fiscal year. “The company is not yet able to communicate its 2025 financial performance” due to the investigation, which has delayed its reporting of fourth-quarter and full-year 2025 results. ICON said it intends to release those results on or before April 30, and that the investigation has not identified any impact to customers from its financial practices. CEO Barry Balfe stated that ICON was implementing actions intended to enhance its internal controls over financial reporting. That reassurance sparked a 16% comeback to an even $93 Friday, as Kerrisdale Capital invested 20% of its capital into the CRO.
- Upstream Bio (NASDAQ: UPB) shares plummeted 47% from $27.81 to $14.69 Wednesday despite announcing positive topline results from the Phase II VALIANT trial (NCT06196879) assessing the safety and efficacy of verekitug in adults with severe asthma. VALIANT met the study’s primary endpoint of statistically significant and clinically meaningful reduction in the annualized asthma exacerbation rate (AAER) at both every 12-week (q12w) and every 24-week (q24w) dosing. But verekitug showed a greater AAER reduction of 56% at 100 mg q12w, compared with 39% at 400 mg q24w: “The lower exacerbation reduction seen at 400 mg [q24w] has raised concerns on the competitive positioning of verekitug versus others in Phase II/III development,” William Blair analyst Matt Phipps, PhD wrote, explaining the selloff.
