What happened

Shares of Nektar Therapeutics (NASDAQ:NKTR) fell 20% last month, according to data provided by S&P Global Market Intelligence. The stock had ended June on a high note on the heels of promising data for melanoma drug NKTR-214 and was finally reclaiming ground lost following an epic collapse earlier in the year. But the progress was short-lived, as shares fell to year-to-date lows by the end of July.

The stock slid steadily all month with no news whatsoever, although that changed on July 25 when Nektar Therapeutics quietly disclosed that the U.S. Food and Drug Administration (FDA) had delayed an important meeting for NKTR-181. The delay wasn't specific to the drug; the FDA is contemplating changes to how it regulates opioid drugs in light of the ongoing crisis. But that didn't keep investors from showing their frustration.

A finger tracing a declining stock chart on a touchscreen.

Image source: Getty Images.

So what

Nektar Therapeutics has had a rough existence lately. It has struggled to communicate its new strategy to investors, which includes the spinoff of NKTR-181 into the waiting arms of a new company called Inheris Biopharma should the drug candidate earn marketing approval. It's expected to have blockbuster potential, although the FDA delay will likely keep it off the market a bit longer than investors originally expected.

The spinoff would allow Nektar Therapeutics to refocus its bandwidth on the oncology and immunology pipeline. Some of the more promising assets in those areas have disappointed in the clinic, although a combination therapy of NKTR-214 and Opdivo demonstrated impressive early results in advanced melanoma in June.

Now what

The proposed creation of Inheris Biopharma was widely believed to make Nektar Therapeutics more enticing for a buyout. Of course, for that remote possibility to happen, the company's remaining pipeline assets need to deliver in the clinic, and either they haven't or it's simply too early to tell. Until a major pipeline update -- or a buyout -- takes place, investors can expect the stock to remain volatile.

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