What happened

Nektar Therapeutics (NKTR) shareholders trounced the market last month as their stock gained 29% compared to an 8% spike in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally did little to reverse the broader drop in the cancer-treatment specialist's shares, which are down 37% in the past year compared to a 3% uptick in the broader market.

Two scientists studying a microscope.

Image source: Getty Images.

So what

The stage was set for January's rally in part by a difficult 2018 that saw Nektar shares fall by 45%. The company booked just $46 million of revenue over the first three quarters of the year to offset just a small portion of its research and development spending. Promising tumor-attacking treatments haven't paid off as well as investors hoped they would.

Against that backdrop, shares spiked in early January after management's pipeline update showed several of its drug treatments, including NKTR-214, advancing through late-stage clinical trials.

Check out the latest Nektar earnings call transcript.

Now what

Nektar has two notable treatment studies launching in the first few months of 2019. And thanks to its partnership with drug giant Bristol-Myers Squibb, the company has plenty of cash on hand to see it through these clinical tests and many more to come. However, investors appear to be waiting for concrete evidence of commercialization success, which makes sense given that shares are still expensive -- valued at almost seven times the $1.2 billion in revenue that Nektar is expected to book for 2018.