Over the past decade, Nektar Therapeutics' pegylation capabilities have provided a growing royalty stream via third party sales of biologics that use the technology. Now, internal products that use the pegylation technology are starting to gain visibility. The twist is that NKTR is developing pegylated small molecules.

NKTR opted not to pursue pegylated proteins for multiple reasons, including patent issues with innovator biologics and a lack of protein manufacturing infrastructure. In contrast, there are numerous off-patent drugs in the small molecule space - an area that offers more coverage of disease states and pathways.