- Company Name
- Nektar Therapeutics
- Stock Symbol
- Class Period
- November 11, 2017 to October 2, 2018
- Motion Deadline
- December 29, 2018
- Northern District of California
The complaint charges Nektar and certain of its officers with violations of the Securities Exchange Act of 1934. Nektar is a research-based biopharmaceutical company that discovers and develops innovative medicines in areas of unmet medical need. Nektar’s research and development pipeline of new investigational drugs includes treatments for cancer, autoimmune disease, and chronic pain. Nektar’s new drug candidates utilize the Company’s advanced polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action.
NKTR-214, the Company’s lead immune-oncology candidate, is a biologic with biased signaling through an IL-2 receptor (a naturally occurring cytokine) that can stimulate proliferation and growth of tumor-killing immune cells in the tumor microenvironment and increase expression of PD-1 (a cell surface receptor that belongs to the immunoglobulin superfamily and is expressed on T cells and pro-B cells) on these immune cells.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations. Specifically, defendants failed to disclose that: (i) prior studies that attempted to pegylate (add polyethylene glycol molecules to) IL-2 had failed; (ii) NKTR-214’s extended half-life was unlikely to result in efficacy and created additional high-dosing safety concerns; (iii) NKTR-214 was less effective than IL-2 alone; and (iv) the combination of NKTR-214 with nivolumab had not yet demonstrated significant positive results. As a result of this information being withheld from investors, Nektar securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of nearly $110 per share.
Then on October 1, 2018, Plainview LLC (“Plainview”) published a report entitled “NKTR-214: Pegging the Value at Zero.” The report addressed the efficacy of NKTR-214, which the Company had touted as “a promising treatment for cancer, particularly in combination with checkpoint inhibitors.” The Plainview report stated that “Nektar hypothesized that IL-2 could be improved by adding polyethylene glycol molecules to it (pegylating it) to extend the half-life and block interaction with” a specific receptor, but that, “[u]nfortunately, the anticipated benefits did not materialize and pegylation has proved to be a drag on efficacy.” The Plainview report asserted that the core concept of Nektar’s plan to develop NKTR-214 into “a new universal cancer treatment” “has never worked in practice,” and further that Nektar’s decision to only disclose certain trial results represented “an unprecedented level of data opacity.” Following the publication of the Plainview report, Nektar’s stock price fell $5.63 per share, or more than 9%, over the following two trading sessions, to close at $55.33 per share on October 2, 2018.