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Why Is Nektar (NKTR) Up 3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Nektar Therapeutics (NKTR - Free Report) . Shares have added about 3% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Nektar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Nektar Q3 Earnings & Revenues Top Estimates

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.

Quarter in Detail

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 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.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 12.42% due to these changes.

VGM Scores

Currently, Nektar has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Nektar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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