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Nektar (NKTR) Stock Up 3% on Q3 Earnings and Revenue Beat

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Shares of Nektar Therapeutics (NKTR - Free Report) were up 3.1% on Friday after the company announced better-than-expected earnings for the third quarter of 2020.

Nektar reported a loss of 61 cents per share for the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 80 cents but wider than the year-ago loss of 56 cents.

Quarterly revenues were up 2.7% year over year to $30 million during the quarter. Revenues also beat the Zacks Consensus Estimate of $22 million.

Nektar’s shares have lost 19.3% so far this year compared with the industry’s decline of 4.9%.

Quarter in Detail

Nektar’s top line comprises product sales, royalty revenues, non-cash royalty revenues along with license, collaboration and other revenues.

In the third quarter, product sales increased 2.4% from the year-ago period to $5.7 million.  Non-cash royalty revenues were up 1.5% to $10.4 million.

Nektar’s royalty revenues increased 19.6% year over year to $12.3 million in the quarter.

License, collaboration and other revenues were $1.6 million in the quarter compared with $3.1 million in the year-ago quarter.

Research and development expenses increased 1.5% to $100.5 million due to higher clinical development costs, partially offset by lower manufacturing costs for clinical study materials.

General and administrative expenses rose 12.5% to $27 million in the reported quarter.

2020 Guidance Maintained

Nektar maintained its guidance for 2020. The company expects total revenues for 2020 to be in the range of $140-145 million.

Pipeline Update

On the earnings call, Nektar stated that enrollment in clinical studies led by the company or its partners is back on track following a disruption in the second quarter due to the COVID-19 pandemic. The company’s partner Bristol-Myers (BMY - Free Report) is progressing well with enrollment in five registrational studies of bempegaldesleukin in combination with Bristol-Myers’ Opdivo (nivolumab). In September, Bristol-Myers initiated a new phase I/II study to evaluate bempegaldesleukin+Opdivo in combination with a tyrosine-kinase inhibitor in renal cell carcinoma.

Meanwhile, Nektar stated that the company is ahead of its enrollment targets in the phase II PROPEL study evaluating bempegaldesleukin in combination with Merck’s (MRK - Free Report) Keytruda (pembrolizumab). Initial data from the study, evaluating the combination regimen in metastatic non-small cell lung cancer patients, is expected in the first part of 2021.

In October, Nektar initiated a phase Ib study to evaluate bempegaldesleukin in adult patients with mild COVID-19 infection. The company received investigational new drug or IND clearance for initiating a phase I/II study to evaluate NKTR-255 in patients with solid tumors in the same month.

We note that Nektar has another key candidate, NKTR-358, in its pipeline. The development of the candidate is led by its partner Eli Lilly (LLY - Free Report) . A phase II study is evaluating the candidate in patients with systemic lupus erythematosus and another mid-stage study is being planned for ulcerative colitis. Two early-stage studies are evaluating the candidate in patients with atopic dermatitis or psoriasis.

Nektar Therapeutics Price, Consensus and EPS Surprise

Nektar Therapeutics Price, Consensus and EPS Surprise

Nektar Therapeutics price-consensus-eps-surprise-chart | Nektar Therapeutics Quote

Zacks Rank

Nektar currently has 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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