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Here's Why Nektar Therapeutics Surged Today

By Cory Renauer - Updated Apr 15, 2019 at 5:31PM

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Investors liked what the company had to say about the year ahead.

What happened

Check out the latest Nektar Therapeutics earnings call transcript.

Shares of Nektar Therapeutics (NKTR 3.84%), a biopharmaceutical company, are on the move following its presentation at the J.P. Morgan Healthcare conference. The stock climbed 11.1% during Tuesday's session as investors cheered Nektar's 2019 to-do list.

So what

Nektar has commercial-stage drugs, but sales and royalty revenue from partners that market its treatments trickled in at just $41 million during the first nine months of 2019. Investors nervous about NKTR-214 and its ability to boost the efficacy of PD-1 checkpoint inhibitors have hammered the stock more than 60% lower since a peak last March.

Hand drawing an upward-sloping chart on a chalkboard

Image source: Getty Images.

Last year, Bristol-Myers Squibb (BMY 1.49%) paid Nektar $1.85 billion up front for rights to NKTR-214. Investors were encouraged to hear that the company finished 2018 with $1.92 billion in cash and investments, thanks largely to Bristol's contribution.

In 2019, Nektar has a lot of plans for that cash, including:

  • Potential approval and launch of NKTR-181, an abuse-deterrent opioid painkiller that doesn't induce an addictive state of euphoria.
  • Human proof-of-concept data from a potential new autoimmune drug, NKTR-358.
  • Two new phase 1b studies of NKTR-358 in autoimmune conditions, to be initiated by Eli Lilly.
  • A phase 1 study of NKTR-255 in multiple myeloma.

Now what

Although Nektar has lots of cash to develop new treatments, it looks like the company will shovel a lot of it toward NKTR-214 in 2019. The candidate combined with Opdivo has produced interesting tumor response rates among small groups of patients receiving both drugs, but there's a good chance that Opdivo is doing all the work.

Instead of waiting for controlled data to find out if NKTR-214's the real thing, the partners will expand the number of ongoing registrational studies from four to 18 by the end of June. The first study comparing NKTR-214 plus Opdivo to Opdivo on its own started in the third quarter. If the newly diagnosed melanoma patients given Nektar's drug don't show a clear benefit, the rest of the program will crash and burn.

Cory Renauer 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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Stocks Mentioned

Nektar Therapeutics Stock Quote
Nektar Therapeutics
$5.14 (3.84%) $0.19
Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
$75.57 (1.49%) $1.11

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