Please ensure Javascript is enabled for purposes of website accessibility

Why NantKwest, Inc.'s Shares Briefly Stumbled Today

By George Budwell - Mar 11, 2016 at 12:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An accounting error caused the immunotherapy specialist's shares to briefly drop on Friday.

Image source:

What: Shares of NantKwest (NK), a clinical-stage immunotherapy company, dropped by 10.1% at the start of trading today after the company released an 8-K stating that its "interim financial statements...for the quarters ended June 30, 2015 and September 30, 2015 should no longer be relied upon due to the combined effect of financial statement errors primarily attributable to certain stock-based awards to the Company's Chief Executive Officer and Executive Chairman and build-to-suit lease accounting related to one of its research and development and Good Manufacturing Practices facilities." 

So what: Although this 8-K doesn't seem to contain any major bombshells, it certainly doesn't help the company shake off the market's negative view of the company. After all, NantKwest's stock is now down by over 77% from its former highs, according to data provided by S&P Global Market Intelligence:

NK Chart

NK data by YCharts.

Now what: While it's not entirely clear what's driving this sell-off in NantKwest's shares lately, I think it's safe to say that the company's intriguing -- yet unproven -- genetically modified natural killer cell platform aimed at treating cancer is part of the problem. In a nutshell, the market has turned against nearly every clinical-stage cancer immunotherapy company in recent months -- especially after AstraZeneca (AZN 3.80%) reported that a pair of its clinical trials in lung cancer were halted due to safety concerns late last year.

The big picture is that AstraZeneca sports one of the strongest and highest-profile immuno-oncology pipelines in the industry at the moment, meaning that its success -- or failure -- will likely help to shape the market's view of these next-generation cancer treatments. Indeed, NantKwest's natural killer cell platform is only now getting off the ground, yet its stock has been getting pummeled simply because of the perceived risk of this technology.

All told, I think NantKwest is worth considering as a watch list candidate right now due to the game-changing potential of its platform, combined with the fact that its shares have fallen mostly as a result of market sentiment. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NantKwest, Inc. Stock Quote
NantKwest, Inc.
AstraZeneca PLC Stock Quote
AstraZeneca PLC
$66.90 (3.80%) $2.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.