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.

Nektar Therapeutics on Monday revealed that former partner Eli Lilly had incorrectly calculated efficacy data for its investigational regulatory T-cell stimulator rezpegaldesleukin (rezpeg), which the company is developing as a treatment for atopic dermatitis.

The writing was on the wall for Nektar Therapeutics and Eli Lilly’s rezpeg collaboration, but, now, the Big Pharma is etching it in permanent marker. Rights for the T regulatory cell stimulator treatment are now headed back to the biotech.

Following a recent phase 2 failure, the San Francisco-based biotech company Nektar Therapeutics has slashed its workforce and axed the development of the protein drug rezpegaldesleukin (Rezpeg) for the treatment of the autoimmune disease systemic lupus erythematosus (SLE).

Almost exactly a year after Nektar Therapeutics jettisoned 70% of its staff, the biotech is now contracting again. This time, 60% of its San Francisco-based workforce is being laid off in a reorganization that will also see the C-suite rejigged and a tighter focus on immunology.

Nektar Therapeutics’ hopes of rebuilding its battered business around lupus lie in tatters. The key phase 2 clinical trial of rezpegaldesleukin missed its primary endpoint, prompting partner Eli Lilly to drop plans for further development in lupus and reassess its next steps in atopic dermatitis. 

Evaluate Vantage has already delved into the key first-quarter clinical data for big pharma and large biotech groups. Now it is the turn of companies with a market cap under $1bn.

Calliditas’s Tarpeyo already has an accelerated approval in IgA nephropathy, but it now needs to make its mark with confirmatory data on a harder endpoint as competition looms. Elsewhere, Madrigal’s hit this week turns attention to other Nash players: both Viking and 89Bio have mid-stage data approaching.

Just days after revealing that it was in discussions with Nektar Therapeutics over a possible merger, PureTech Health has said the negotiations have been terminated by mutual agreement.

If you are wondering what the logic is behind merging an inhaled drug delivery specialist that turned to oncology with a holding company that has a portfolio of disparate healthcare assets you are probably not alone. This morning’s market reaction suggests that investors, too, are puzzled by Nektar’s preliminary approach, confirmed today, to Puretech Health.