In the absence of real news, biotech stocks can drift lower as impatient investors pursue names with more near-term excitement, and I’m not altogether surprised that Nektar (NKTR) shares are lower than when I last wrote on the company, though the nearly 20% decline seems a little overdone. Since then, the company has delivered a mildly positive update on its lupus program, while maintaining generally as-expected timelines for other key clinical read-outs.
The performance of Nektar’s shares over the next 12-18 months are still largely tied to updates on the performance of the company’s lead drug bempegaldesleukin (or “bempeg”) in a series of oncology trials, with the melanoma studies in particular looking like the biggest value-drivers to me. Success in melanoma alone could drive a substantially higher share price, while clinical trial failures would hammer the stock, even though there are valuable compounds in the pipeline beyond bempeg. As is, Nektar remains a virtually binary call, and one that I think is worth at least considering ahead of some data updates in November of this year and through 2021.
Finish reading the article here:
Nektar Looks Undervalued, But The Biggest Value-Driving Events Are Still In 2021
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