There will be a lot of press about this BMS-Nektar $3.6B deal, but one thing everyone will agree on is that the checkpoint inhibitor space is highly competitive and Merck's Keytruda has become a bete noir for BMS' Opdivo. Furthermore, IO is, as oncology has been but even more so perhaps, a combination therapy story. And NKTR-214 was one of two real stars of the 2017 SITC (along with the EMD's PD-L1/TGF-beta trap). So one can parse the numbers and worry about the riskiness of the bet, but there is a risk to BMS' not making a bold move. And all this hand-wringing reminds me about another past mega deal, Gilead's acquisition of Pharmasset for $11B. Gilead was not defending but establishing an HCV franchise. And we all know how that deal turned out, and it was similarly much-maligned at the time.
For Bristol, NKTR-214 is a risky, all-in gamble to save its troubled cancer immunotherapy franchise. Opdivo is Bristol’s crown jewel, with 2017 sales of $5 billion, but the drug has been losing market share to rivals, most notably Merck’s checkpoint inhibitor Keytruda. In 2016, an Opdivo monotherapy study in lung cancer flopped. Last week, another important Bristol clinical trial combining Opdivo and Yervoy in a certain type of lung cancer patient reported results that were more positive but also mired in controversy.