Eli Lilly Did Breach Implied Covenant of Good Faith With Nektar Therapeutics, Jury Funds

A federal jury in California has awarded Nektar Therapeutics Inc. (NASDAQ:NKTR) $90 million in damages, finding that Eli Lilly and Co. (NYSE:LLY) breached the implied covenant of good faith and fair dealing. Nektar Therapeutics Wins $90 Million Judgment Against Eli Lilly The lawsuit, filed in August 2023, stemmed from a previous licensing agreement between the two companies for the development and commercialization of the drug rezpegaldesleukin. Jury Finds Breach of Covenant The trial in the U.S. District Court for the Northern District of California commenced on September 8. After hearing the case, the jury delivered its verdict on September 24, determining that Lilly had indeed violated the terms of the implied covenant within their agreement. Read Also: Amgen Rocatinlimab's Data Shows Potential As Long-Term Therapy For Atopic Dermatitis Award and Next Steps In addition to the $90 million in damages, the court will determine the amount of interest to be added to the award. The jury’s decision is not yet final, as it remains subject to post-trial proceedings. Furthermore, any subsequent judgment could potentially be appealed. Recent Rezpegaldesleukin Update In July 2026, Nektar initiated the first two global registrational trials in the Phase 3 ZENITH AD program evaluating rezpegaldesleukin in moderate-to-severe atopic dermatitis. The program will include a total of three studies: ZENITH AD-1 and ZENITH AD-2 will enroll biologic- and systemic JAK inhibitor-treatment-naive patients, and ZENITH AD-3 will enroll patients with prior biologic and/or systemic JAK inhibitor treatment experience. In April, Nektar Therapeutics shared results from a blinded 16-week treatment extension period in its Phase 2b REZOLVE-AA study. The company said the REZOLVE-AA extension results demonstrated continued improvement in patients with severe-to-very-severe alopecia areata treated with rezpegaldesleukin, with responses strengthening over time across key SALT (Severity of Alopecia Tool) measures. Nektar highlighted that a growing proportion of patients achieved clinically meaningful hair regrowth, including improved outcomes across SALT Score ≤20 and SALT Score ≤30 thresholds, as well as broader response measures such as SALT50 and SALT30. Price Action: Eli Lilly shares were down 1.25% at $1167.11 and Nektar Therapeutics shares were up 0.11% at $59.44 at the time of publication on Friday, according to Benzinga Pro data. Read Also: Eaton Adds European Power Capacity as Data Center Demand Keeps Rising Photo by Sundry Photography via Shutterstock