Nektar Therapeutics Shares Surge Amid Acquisition Rumors, Ongoing Legal Battle with Eli Lilly

Nektar Therapeutics, a biopharmaceutical company focused on developing novel drugs for immune-mediated diseases, has seen its stock price soar following speculation of a potential acquisition. The surge in share value comes amid an ongoing legal dispute with former partner Eli Lilly over the development of a promising atopic dermatitis therapy.

Acquisition Rumors Fuel Stock Rally

Shares of Nektar Therapeutics experienced a significant uptick, jumping as much as 12% on Friday and continuing to rise in premarket trading on Monday. The stock was trading at $62.49, marking an 8% increase from its Friday closing price of $54.96. This sudden surge is attributed to rumors circulating on social media about a potential acquisition, as reported by the Betaville blog.

Speculation is rife that Eli Lilly could be the potential buyer, despite the recent breakdown of their partnership with Nektar. The rumored acquisition has sparked interest among investors, although no official statements have been made by either company regarding the possibility of a deal.

Rezpeg: A Contentious Asset at the Center of Dispute

The focus of both the acquisition rumors and the legal battle is rezpegaldesleukin, also known as rezpeg, a T cell stimulator being developed for atopic dermatitis, alopecia areata, and type 1 diabetes. Nektar and Eli Lilly initially partnered in July 2017, with Lilly providing a $150 million upfront payment and the potential for up to $250 million in milestones for co-development and co-commercialization rights.

However, the partnership soured following the presentation of Phase Ib data by Lilly in September 2022. While the drug showed dose-dependent improvements in disease burden, its efficacy fell short of statistical significance according to Lilly's analysis. This led to Lilly backing out of the partnership in April 2023 and returning rezpeg's rights to Nektar.

Legal Battle and Data Discrepancies

In a dramatic turn of events, Nektar alleged in August 2023 that Eli Lilly had miscalculated rezpeg's efficacy. After gaining access to raw data files, Nektar claimed to have discovered that the drug was significantly more effective than Lilly's analysis had indicated, meeting the threshold for statistical significance.

Nektar's reanalysis also uncovered alleged miscalculations by Lilly in a separate Phase Ib study, revealing a stronger treatment effect on psoriasis severity. These findings led Nektar to file a lawsuit against Eli Lilly, accusing the pharmaceutical giant of "botching" the data analysis of rezpeg and delaying "development and commencement of additional trials." Nektar further alleged that Lilly was "fabricating excuses for why the drug was not likely to be a commercial success."

The lawsuit, filed in the U.S. District Court of San Francisco, continues to progress as of June 12, 2025, with both companies maintaining their respective positions.

Rezpeg's Potential and Market Outlook

Despite the ongoing legal dispute, Nektar remains optimistic about rezpeg's potential. The drug, designed for subcutaneous injection, targets receptors on regulatory T cells, promoting their multiplication and addressing immune dysregulation in diseases such as eczema.

In June 2025, Nektar reported that rezpeg treatment resulted in a 61% improvement in Eczema Area and Severity Index scores, compared to 31% in placebo comparators. Nektar CEO Howard Robin described the data as "compelling," viewing it as a mid-stage victory for rezpeg.

However, analysts remain cautious. William Blair noted that rezpeg's point of differentiation "remains unclear" against other atopic dermatitis treatments, citing the "absence of clear differentiation in the highly competitive atopic dermatitis field."

As the pharmaceutical industry closely watches the unfolding situation, the future of rezpeg and its potential impact on the atopic dermatitis market remains uncertain. The outcome of the legal battle between Nektar and Eli Lilly, coupled with the possibility of an acquisition, could significantly shape the trajectory of this promising therapy and the companies involved.