After a protracted rough patch—which has included layoffs, partnership terminations and lawsuits—San Francisco’s Nektar Therapeutics is extending its cash runway with the sale of one of its two main facilities.
In a deal expected to close Dec. 2, Nektar is selling its Huntsville, Alabama, manufacturing plant and reagent supply business to private equity firm Ampersand Capital Partners for a total value of $90 million.
Under the agreement, Nektar is slated to receive $70 million in cash, plus a $20 million equity position in a new Ampersand portfolio company that will leverage the biotech’s 124,000-square-foot, commercial-scale PEGylated therapeutics facility.
Once the deal closes, Nektar will also have the option to appoint a representative to the board of the new Ampersand company, the biotech said in a release Monday.
All of the workers at the Huntsville plant will be offered employment under the new Ampersand-spearheaded company, Nektar said. Additionally, Nektar and the new company plan to forge manufacturing supply agreements to meet the biotech’s PEG reagent needs for its lead candidate rezpegaldesleukin (rezpeg), plus certain other pipeline assets.
PEGylation refers to a process by which drugs are modified with the polymer polyethylene glycol (PEG) to improve characteristics such as solubility, immunogenicity, stability and retention time.
Ampersand aims to invest in and grow the Huntsville site as a standalone manufacturing business that will serve both new and existing customers, the firm’s general partner, David Anderson, said in a statement. The facility already boasts commercial supply deals with a number of leading drugmakers, according to the plant sale announcement.
Nektar, for its part, figures the facility handoff will help it focus on its primary mission to develop new therapeutics for immunology.
"This sale streamlines Nektar's operations as we continue to focus on the future success and clinical advancement of rezpegaldesleukin and our other antibody-based immunology pipeline assets, including our TNFR2 antibody and bispecific programs," Howard Robin, Nektar’s president and CEO, said in the company’s release.
“The sale also further extends Nektar's cash runway into the fourth quarter of 2026,” he added.
Nektar’s lead asset rezpeg has been on a strange journey over the past few years.
Back in April 2023, Eli Lilly returned the rights to the T regulatory cell stimulator to Nektar after rezpeg failed to meet expectations in a phase 2 lupus study. At the time, Lilly said it would drop the lupus indication and weigh whether to continue development of rezpeg in atopic dermatitis, where Nektar pledged to push forward.
Three months later, Nektar filed suit against Lilly, accusing the Indianapolis-based pharma of botching a data analysis from phase 1b trials of rezpeg in eczema and psoriasis.
Nektar ultimately claimed that Lilly “incorrectly calculated” its analyses in a manner that misrepresented rezpeg’s efficacy, with Nektar’s own efforts to interpret the data yielding a much more flattering readout in both atopic dermatitis and psoriasis.
At the time, Lilly reportedly confirmed the errors, though a spokesperson told Fierce Biotech that the company stood by its decision to drop development given rezpeg’s failure in systemic lupus erythematosus.
Following the lupus miss—and amid its bid to double down in eczema—Nektar last spring announced plans to lay off 60% of its workforce in San Francisco.
Prior to that, Nektar in 2022 said it would cut 70% of its staff after the biotech’s Bristol Myers Squibb-partnered cancer asset bempegaldesleukin failed to pass muster in phase 3.