Therapeutics

Clinical-stage biotech Protagonist Therapeutics (PTGX 29.76%) was all the rage on the stock market Friday. The company’s share price closed a dizzying 29.8% higher on the day, thanks to intense takeover speculation. That leap was particularly notable considering it was quite a downbeat day for stocks overall, with the S&P 500 (^GSPC -2.71%) sliding by almost 3%.

Sale in the works?

That speculation was fired that morning by The Wall Street Journal, which reported healthcare giant Johnson & Johnson was in discussions to acquire Protagonist. Although it gleaned this from unidentified “people familiar with the matter,” the financial newspaper had few details to report about the apparent negotiations.

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Protagonist is well known to Johnson & Johnson, as the two companies collaborate on the development of a drug that combats immune disorders such as ulcerative colitis. If and when the medication is developed successfully and comes to market, Johnson & Johnson will hold its exclusive commercialization rights.

If the report is accurate, the would-be acquirer wouldn’t be snapping up Protagonist at a bargain. Thanks largely to positive results in clinical trials for several of its pipeline drugs, the biotech’s share price had risen in excess of 70% year to date — and that was before Friday’s monster pop.

Mum’s the word… for now

Neither Protagonist nor Johnson & Johnson has yet commented on the WSJ report, which is par for the course in early stages of such events. I should stress that this has to be considered speculation at this point, although I would advise investors of either company (or both) to keep a sharp eye on how the apparent deal might shape up.

Clinical-stage biotech Nektar Therapeutics (NKTR 15.06%) had some encouraging news to report from the lab about one of its investigational medicines on Thursday. As often happens in such circumstances, investors flocked to the stock, and it closed the trading session a bit more than 15% higher. With that rise, it crushed the 0.5% advance of the bellwether S&P 500 index.

Skin in the game

That morning, Nektar published new data from a phase 2b study of rezpegaldesleukin, which targets moderate to severe atopic dermatitis, a skin disorder.

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The healthcare company said that a high dose of the drug achieved statistical significance on its primary endpoint, improvement in the eczema area and severity index versus a placebo over the course of 16 weeks of treatment. It also performed well in key secondary endpoints measuring a reduction of the disorder.

More encouragingly, Nektar found that participants who kept taking the treatment experienced even more profound effects. The biotech added that rezpegaldesleukin was generally well tolerated by the study’s participants.

In addition to atopic dermatitis, the drug is currently being developed by Nektar for the treatment of severe alopecia areata, a disease that can result in hair loss. The next readout from clincal testing for that indication is expected in December by the company.

A new kind of treatment

In its press release on the atopic dermatitis trial’s results, Nektar quoted its chief research and development officer Jonathan Zalevsky as saying that those results “demonstrate the potential of this new biology and the promise of Tregs [regulatory T-cells] as a therapeutic modality to treat inflammatory skin disorders.”