Nkarta Downgraded, Analyst Cites Competitive Pressure In Autoimmune Space

Nkarta Inc. NKTX on Wednesday reported a first-quarter loss of 43 cents per share, beating the consensus loss of 44 cents.

As of March 31, 2025, Nkarta had $351.9 million in cash, cash equivalents, restricted cash, and investments in marketable securities.

The company expects its current cash and cash equivalents to be sufficient to fund its current operating plan into 2029.

Also Read: Why Is Autoimmune Disease Focused Nkarta Stock Trading Higher On Thursday?

In the clinical development of NKX019 for autoimmune diseases, the Ntrust-1 trial of NKX019 for lupus nephritis (LN) expanded to include patients with primary membranous nephropathy (pMN). Ntrust-1 is currently open to enrolling patients with pMN and remains open to enrolling patients with LN.

The Ntrust-2 trial of NKX019 for systemic sclerosis, idiopathic inflammatory myopathy, and anti-neutrophil cytoplasmic antibody-associated vasculitis continues to enroll patients.

Ntrust-1 and Ntrust-2 protocols were amended to modify lymphodepletion before administration of NKX019 to use a combination of fludarabine and cyclophosphamide, with the option for eligible patients to continue to receive cyclophosphamide alone as modified lymphodepletion.

The investigator-sponsored trial (IST) of NKX019 for myasthenia gravis, led by researchers at the University of California, Irvine, has opened for enrollment. The IST of NKX019 for systemic lupus erythematosus, led by researchers at Columbia University Irving Medical Center, remains open for enrollment. Preliminary clinical data from the Ntrust-1 and Ntrust-2 clinical trials are planned for the second half of 2025.

Analyst at William Blair said, “We view the expansion into pMN positively as it is the first cell therapy trial targeting pMN, to our knowledge, suggesting there will be minimal competition for patient enrollment compared to other indications like lupus nephritis.”

Analyst Sami Corwin is concerned about the changes to the protocol that added Flu to the preconditioning treatment. It’s unclear whether this decision was partly based on early trial data. “Without using a reduced lymphodepletion regimen, it’s becoming harder to see how NKX019 stands out from other CD19 allogeneic cell therapies in the crowded autoimmune disease market,” adds Corwin.

“In addition, while we look forward to the initial clinical data from the Ntrust-1 and Ntrust-2 trials in the second half of 2025, it is unclear if enough data will be shared for the data to be meaningful catalysts, and we think investors will have to wait until 2026 to get a more robust dataset,” the analyst says.

William Blair has downgraded Nkarta from Outperform to Market Perform and writes that the allogeneic approach is favorable for autoimmune disease. However, it is unclear how differentiated the CAR-NK approach is compared to other allogeneic CAR therapies in the space. The analyst has increased the full-year 2025 net loss estimate to $144.7 million, or $1.95 per share.

William Blair acknowledges the potential of Nkarta’s pMN expansion but has become more cautious due to concerns about the modified lymphodepletion protocol and the resulting uncertainty about NKX019’s differentiation in a competitive autoimmune market. They believe the current valuation reflects the risks and development stage.

Price Action: NKTX stock is trading lower by 8.02% to $1.72 at the last check on Thursday.

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