Nektar Therapeutics (NKTR -1.48%) is down 17% in early trading after a joint advisory panel for the Food and Drug Administration unanimously voted down the company's opioid medication, oxycodegol. While the FDA is not obligated to follow the advice of its independent panels, it would be highly unusual in this case, as nobody on the committee thought the drug should be approved.
Hours after the ruling, Nektar announced that the company was withdrawing its new drug application, and will discontinue its program for the drug.
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Opioids are dangerous.
The harsh response from the advisory committee isn't surprising, and many observers rightly thought the drug would have difficulty passing review. Opioids are highly addictive and have killed a lot of people, and the lawsuits are staggering. Given the billion dollar liability that opioid manufacturers are now facing, one wonders why Nektar wanted to put a new opioid pill on the market.
The company believed that its pill was different. Oxycodegol is designed to slowly pass through the blood-brain barrier, and thus people on the drug would not get the immediate "high" that causes abuse problems and health issues we see in other opioid medications.
The joint advisory committee disagreed. In one study there was a "high rate of euphoria" of 17%, even at the approved dosage. As one of the committee members said, "you need data that (show) the benefits outweigh risks, but we didn't see those data. It was all speculation, and we can't approve a potential blockbuster opioid in the middle of a public health opioid crisis based on speculation."
While Nektar was no doubt disappointed at the fate of Oxycodegol, the company has a very strong pipeline with multiple drugs in clinical trials. Its lead molecules are Onzeald, in phase 3 trials for breast cancer, and NKTR-214, another phase 3 drug being tested in a cocktail with Opdivo from Bristol-Myers Squibb (BMY 0.89%) for a variety of cancers. While the stock is down sharply today, it's actually up 10% for the year, as the stock ran up last week on news of an expanded collaboration with Bristol-Myers Squibb.
