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Here's Why Nektar Therapeutics Is Soaring Today

By Brian Feroldi – Mar 2, 2018 at 12:13PM

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Traders cheer after the company reports blowout quarterly results.

What happened

In response to reporting expectation-thumping results, shares of Nektar Therapeutics (NKTR 10.52%), a biotech focused on cancer, auto-immune disease, and chronic pain, jumped 18% as of 11:20 a.m. EST on Friday.

So what

Here's a look at the headline numbers from the quarter:

  • Revenue of $95.5 million crushed Wall Street's expectation of $31.5 million. Even if you subtract the $60 million in revenue related to a new sublicense agreement, the total would have still come in ahead of the consensus estimate.
  • Net loss was $0.21 per share. That was far lower than the $0.38 loss that analysts had expected.
Given the better-than-expected results, it isn't hard to figure out why shares are soaring today.
A person in a suit giving thumbs up as dollar bills fall in the background.

Image source: Getty Images.

Now what

Nektar's shareholders have enjoyed a truly amazing run as of late. After including today's move, the stock is up more than 67% since the start of the year. That's worthy of celebration on its own, but it's even more sensational when you consider that shares appreciated 387% in 2017.

Despite the huge run, investors appear to have plenty of reasons to remain bullish. The company just signed a lucrative deal with Bristol-Myers Squibb (BMY 1.63%) that featured an upfront payment of $1.85 billion. Bristol was willing to fork over that huge fee in exchange for just 35% of the profit potential of NKTR-214, which is a hopeful treatment for multiple solid-tumor cancers. What's more, the company plans to file another compound called NKTR-181 for FDA approval during the upcoming quarter as a hopeful treatment for chronic back pain. This compound is believed to hold huge sales potential because it provides pain relief without generating the euphoria that can lead to opioid addiction.

All in all, Nektar is now in tip-top financial shape and has potential blockbuster drugs in its pipeline. If you're a follower of the investing maxim "winners tend to keep on winning" then Nektar's stock could be for you.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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