Analyst: Nektar Has A Handful Of Milestones Ahead In 2018

Nektar Therapeutics NKTR shares are soaring Monday to new 15-year highs after the company reported more positive data on its therapeutic cancer treatment candidate NKTR-214. 

Full Phase-I PIVOT-2 dose-escalation results indicated promising effects from Nektar’s wholly-owned NKTR-214 in combination with Opdivo in treatment of 38 immuno-oncology naïve patients with frontline melanoma, 1/2L renal cell carcinoma or 1/2L non-small cell lung cancer.

Even after Monday’s big gain, at least one analyst sees more upside ahead for Nektar stock.

The Analyst

Canaccord Genuity analyst Arlinda Lee maintains a Buy rating and raised its price target from $35 to $50.

The Thesis

Lee said early stage data on NKTR-214 is very promising for both cancer sufferers and investors.

“Clear activity with anti-PD1 Opdivo, regardless of PD-L1 status and across tumor types, benign safety profile, and mechanism of expanding and activating Teffector cells centrally positions NKTR-214 in IO therapy for cancer,” Lee wrote.

According to Lee, sample sizes are very small at this point, but NKTR-214 has so far demonstrated a “remarkable” 60 percent response rate in combination with Opdivo in PDL1-negative NSCLS patients. A response rate that high far exceeds response rates reported for an Opdivo combination with Yervoy (18 percent) and Opdivo treatment alone (14 percent).

“Given the broad applicability of NKTR-214's mechanism to ability to activate and expand NK and Teffector cells and excitement from SITC, we continue to expect additional cancer indications,” Lee said.

As a result of the new batch of data, Canaccord Genuity increased its probability of success for NKTR-214 from 45 percent to 50 percent in PDL1-NSCLC. In addition, the firm raised its probability of success in IO refractory melanoma from 40 percent to 50 percent.

Looking ahead, Lee sees several key milestones for Nektar on the way in 2018, including clinical data for NKTR-214 and Opdivo in RCC and sarcoma (1H) and other solid tumors, as well as potential combination data with Tecentriq and/or Keytruda. Nektar could also potentially announce NDA submission and and FDA Advisory Committee meeting for its abuse-deterrent NKTR-181 and initiation of Phase-I TLR7/8 agonist NKTR-262.

Price Action

Following Monday’s huge gain, Nektar stock is now up 449 percent in the past five years. After opening as high as $41.34, the stock has drifted lower throughout the first several hours of trading and was last priced at around $37.61 per share.

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