Nektar (NKTR) Stock Rallied Almost 50% This Year: Here's Why

Shares of Nektar Therapeutics (NASDAQ:NKTR) are up almost 46.7% this year so far, outperforming the Zacks classified Medical-Drugs industry’s registered increase of 3% during this period. Let’s analyze the factors that led to the rally.



San Francisco, CA-based Nektar Therapeutics is a biopharmaceutical company, focused on development of treatments utilizing its PEGylation and advanced polymer conjugate technology platforms.

Nektar’s PEGylation technology has facilitated the development of 10 approved products in the U.S. and the EU, through partnerships with healthcare companies, namely, AstraZeneca’s (NYSE:AZN) Movantik, UCB’s Cimzia and Amgen’s (NASDAQ:AMGN) Neulasta among others. These partnerships have significantly contributed to the company’s royalty stream and enhanced its financial position.

The company’s lead candidate Onzeald (formerly known as NKTR-102) is a long-acting topoisomerase I inhibitor, currently under an accelerated assessment in the EU for treating adults with advanced breast cancer who have brain metastases. A response is anticipated by the end of the first half of 2017.

A randomized phase III confirmatory study (ATTAIN) on Onzeald is also under process compared with the single-agent chemotherapy of physician’s choice, in the patients with advanced breast cancer, having brain metastases shortly. Positive results from the study could support a regulatory filing in the U.S.

Apart from Onzeald, Nektar is working on developing other candidates. In Feb 2017, the company announced a positive phase I clinical data, evaluating its lead immuno-oncology agent NKTR-214, in patients with renal cell carcinoma (RCC). Detailed data were presented at ASCO GU in Jun 2017.

Notably on May 2017, the company has entered into a research collaboration with Takeda Pharmaceuticals to explore the combination of NKTR-214 with five oncology compounds from Takeda’s cancer portfolio.

The opioid-based candidate NKTR-181 is being evaluated in a phase III study for treating patients with moderate to severe chronic low back pain without causing potential abuse and addiction.

In Mar 2017, the company posted positive results from the study. It met the primary efficacy endpoint, significantly demonstrating an improved chronic back pain relief under the effect of NKTR-181 compared with placebo.

Key secondary endpoints of the study were also met with high statistical significance. The FDA has granted a track designation to NKTR-181 for the same indication.

During the same month, the company announced that it has started dosing in a phase I clinical study, evaluating NKTR-358, which is being developed to treat a wide range of auto-immune diseases and inflammatory disorders. The phase I study will evaluate single-ascending doses of NKTR-358 in approximately 50 healthy subjects.

Owing to a number of key data readouts shares of Nektar have consistently propelled this year.

Though the PEGylation and advanced polymer conjugate chemistry platforms provide an immense commercial potential, candidates currently under development are set to face an intense competition, upon approval. However, the company’s robust pipeline looks promising at this juncture and its collaborations bode well for growth. Players in PEGylation and polymer conjugate chemistry technology space include Biogen (NASDAQ:BIIB) , Savient Pharmaceuticals, Dr. Reddy’s and Novo Nordisk (CO:NOVOb) among others.

Nektar carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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