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What's in the Cards for Nektar (NKTR) This Earnings Season?

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Nektar Therapeutics (NKTR - Free Report) is scheduled to report third-quarter 2018 results on Nov 7, after market close.

While the company surpassed expectations in two of the last four quarters, it missed the same once and met once, with the average beat being 30.99%.

However, shares of Nektar have underperformed the industry so far this time. The stock has declined 34.6% compared with the industry’s decrease of 4.4%.

In the last reported quarter, Nektar’s earnings were in line with expectations.

Let’s see how things are shaping up for this announcement.

Factors at Play

Nektar earns revenues from proprietary PEGylation material sales to partners, royalties on sales of partnered drugs like AstraZeneca’s Movantik and Shire’s Adynovate, payments from license and collaboration agreements and non-cash royalty revenues. In the first half, royalty revenues increased significantly. The trend is expected to continue this quarter mainly due to higher sales of Adynovate as announced on Shire’s on its third-quarter earnings call.

The company also has several candidates in its pipeline, which includes its lead candidate, Onzeald (pain management) and NKTR-214 (an immuno-stimulatory CD122-biased agonist). Nektar has a collaboration with multiple drug companies to develop NKTR-214 in combination with their cancer candidates. Nektar has collaboration agreement with Bristol-Myers (BMY - Free Report) to develop NKTR-214 in combination with the latter’s Opdivo or Yervoy.

In July, the FDA accepted a new drug application seeking approval for NKTR-181 for treating chronic low back pain in patients new to any opioid therapy. Moreover, during the quarter, Nektar expected to initiate a phase III study to evaluate NKTR-214 in combination with Opdivo for treating first-line advanced melanoma patients. These factors may increase operating expense during the quarter.

We expect the company to provide details on timeline for approval of NKTR181 and its commercialization plans. The investors should focus on any update on the initiation of late-stage study on NKTR-214 combination therapy.

Earnings Whispers

Our proven model shows that the combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Nektar’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 64 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Nektar has a Zacks Rank #4 (Sell).

Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Nektar Therapeutics Price and EPS Surprise

 

Nektar Therapeutics Price and EPS Surprise | Nektar Therapeutics Quote

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

CRISPR THERAPTC (CRSP - Free Report) has an Earnings ESP of +3.53% and a Zacks Rank #1.  The company is expected to release third-quarter results on Nov 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

Compugen Ltd. (CGEN - Free Report) has an Earnings ESP of +58.33% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Nov 7.

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