Long a volatile stock, not much has changed for Nektar (NASDAQ:NKTR) in that regard since my last update, with the shares declining about 20% at one point before rebounding and rallying to a point about 15% higher than that last article. In the meantime, Nektar has provided an encouraging clinical update on the bempegaldesleukin (“bempeg”) program in melanoma, as well as expanding its overall bempeg clinical program.
I remain cautiously optimistic on bempeg and the prospects that the pivotal results from the PIVOT-IO-001 melanoma study (late 2021 or early 2022) will prove sufficient to support approval and meaningful commercialization. I’m less bullish on the PROPEL lung cancer study, but if bempeg emerges as a viable option in low and/or negative PD-L1 lung cancer patients, the opportunity would be exceptional.
I continue to believe that Nektar is undervalued below the high $30’s, and that value is based largely on the bempeg program in melanoma (around $20/share) and renal cell carcinoma (around $8/share), with significant additional upside possible when and if clinical data de-risk bempeg in lung cancer and other indications, as well as other clinical candidates like NKTR-358, NKTR-255, and NKTR-262.
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