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Nektar (NKTR) Starts New Restructuring Plan to Curb Cash Burn
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Nektar (NKTR - Free Report) announced a strategic reprioritization and cost restructuring plan that will enable management to extend its existing cash runway into mid-2026 and also re-align management’s pipeline focus on immunology.
To achieve these objectives, Nektar will reduce its existing workforce by around 60%. Once the restructuring plan is completed, it is expected to have around 55 employees. This includes changes in the top level of management, including the stepping down of the current chief medical officer and the chief financial officer. The company expects to complete this cost restructuring plan to be completed by June 2023.
These plans are expected to help Nektar save around $30 million in operating expenses. However, the company expects to incur $8 million during second-quarter 2023 to bring these changes into effect.
In the year so far, shares of Nektar have plunged 56.5% against the industry‘s breakeven growth.
Image Source: Zacks Investment Research
Management will prioritize the development of rezpegaldesleukin (rezpeg). This pipeline candidate is being developed in collaboration with Eli Lilly (LLY - Free Report) targeting auto-immune indications.
In February, Nektar announced that a mid-stage study evaluating rezpeg in adults with moderately-to-severely active systemic lupus erythematosus (SLE) failed to achieve its primary endpoint. As a result, Lilly and Nektar decided not to continue the study further.
Following the failure of the above study, there is uncertainty whether Lilly will continue the partnership with Nektar to develop rezpeg. However, Nektar will continue to work on rezpeg, irrespective of Lilly’s involvement in the deal.
Currently, rezpeg is being evaluated by Lilly and Nektar in an early-stage study in atopic dermatitis (“AD”) indication. Last September, management announced positive data from a phase Ib study, evaluating rezpeg in AD patients. Data from this study showed dose-dependent improvement in AD patients over 12-week and 48-week treatment periods.
Nektar also plans to continue developing its lead oncology pipeline candidate, NKTR-255, in diffuse large B-cell lymphoma and bladder cancer indications. Management is currently exploring strategic partnerships for developing NKTR-255.
We note that this restructuring plan comes a year after management initiated a restructuring plan in April 2022 following multiple development setbacks related to its then-lead pipeline candidate, bempeg. Post the failures, Nektar stopped all clinical studies on bempeg in early 2022. The candidate was being developed in collaboration with Bristol Myers which was the company’s most lucrative deal, providing it with significant cash resources to support the progress of its pipeline and share development costs. However, following the discontinuation of the bempeg development, Nektar is not eligible to receive any payments from Bristol-Myers.
As part of that restructuring plan, Nektar bought its workforce down to nearly 70 employees to extend its cash runway into the first half of 2025.
Nektar currently carries a Zacks Rank #2 (Buy). A couple of better-ranked stocks in the overall healthcare sector include Novo Nordisk (NVO - Free Report) and Sanofi (SNY - Free Report) . While Novo Nordisk sports a Zacks Rank #1 (Strong Buy), Sanofi carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Novo Nordisk’s 2023 earnings per share have increased from $4.20 to $4.52. During the same period, the earnings estimates per share for 2024 have risen from $4.90 to $5.26. Shares of Novo Nordisk are up 26.4% in the year-to-date period.
Earnings of Novo Nordisk beat estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed a surprise of 3.00%. In the last reported quarter, Novo Nordisk’searnings beat estimates by 2.47%.
In the past 60 days, estimates for Sanofi’s 2023 earnings per share have increased from $4.40 to $4.41. During the same period, the earnings estimates per share for 2024 have risen from $4.86 to $4.89. Shares of Sanofi are up 15.4% in the year-to-date period.
Earnings of Sanofi beat estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed a surprise of 7.68%. In the last reported quarter, Sanofi’searnings missed estimates by 3.33%.
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Nektar (NKTR) Starts New Restructuring Plan to Curb Cash Burn
Nektar (NKTR - Free Report) announced a strategic reprioritization and cost restructuring plan that will enable management to extend its existing cash runway into mid-2026 and also re-align management’s pipeline focus on immunology.
To achieve these objectives, Nektar will reduce its existing workforce by around 60%. Once the restructuring plan is completed, it is expected to have around 55 employees. This includes changes in the top level of management, including the stepping down of the current chief medical officer and the chief financial officer. The company expects to complete this cost restructuring plan to be completed by June 2023.
These plans are expected to help Nektar save around $30 million in operating expenses. However, the company expects to incur $8 million during second-quarter 2023 to bring these changes into effect.
In the year so far, shares of Nektar have plunged 56.5% against the industry‘s breakeven growth.
Image Source: Zacks Investment Research
Management will prioritize the development of rezpegaldesleukin (rezpeg). This pipeline candidate is being developed in collaboration with Eli Lilly (LLY - Free Report) targeting auto-immune indications.
In February, Nektar announced that a mid-stage study evaluating rezpeg in adults with moderately-to-severely active systemic lupus erythematosus (SLE) failed to achieve its primary endpoint. As a result, Lilly and Nektar decided not to continue the study further.
Following the failure of the above study, there is uncertainty whether Lilly will continue the partnership with Nektar to develop rezpeg. However, Nektar will continue to work on rezpeg, irrespective of Lilly’s involvement in the deal.
Currently, rezpeg is being evaluated by Lilly and Nektar in an early-stage study in atopic dermatitis (“AD”) indication. Last September, management announced positive data from a phase Ib study, evaluating rezpeg in AD patients. Data from this study showed dose-dependent improvement in AD patients over 12-week and 48-week treatment periods.
Nektar also plans to continue developing its lead oncology pipeline candidate, NKTR-255, in diffuse large B-cell lymphoma and bladder cancer indications. Management is currently exploring strategic partnerships for developing NKTR-255.
We note that this restructuring plan comes a year after management initiated a restructuring plan in April 2022 following multiple development setbacks related to its then-lead pipeline candidate, bempeg. Post the failures, Nektar stopped all clinical studies on bempeg in early 2022. The candidate was being developed in collaboration with Bristol Myers which was the company’s most lucrative deal, providing it with significant cash resources to support the progress of its pipeline and share development costs. However, following the discontinuation of the bempeg development, Nektar is not eligible to receive any payments from Bristol-Myers.
As part of that restructuring plan, Nektar bought its workforce down to nearly 70 employees to extend its cash runway into the first half of 2025.
Nektar Therapeutics Price
Nektar Therapeutics price | Nektar Therapeutics Quote
Zacks Rank & Other Stocks to Consider
Nektar currently carries a Zacks Rank #2 (Buy). A couple of better-ranked stocks in the overall healthcare sector include Novo Nordisk (NVO - Free Report) and Sanofi (SNY - Free Report) . While Novo Nordisk sports a Zacks Rank #1 (Strong Buy), Sanofi carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Novo Nordisk’s 2023 earnings per share have increased from $4.20 to $4.52. During the same period, the earnings estimates per share for 2024 have risen from $4.90 to $5.26. Shares of Novo Nordisk are up 26.4% in the year-to-date period.
Earnings of Novo Nordisk beat estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed a surprise of 3.00%. In the last reported quarter, Novo Nordisk’searnings beat estimates by 2.47%.
In the past 60 days, estimates for Sanofi’s 2023 earnings per share have increased from $4.40 to $4.41. During the same period, the earnings estimates per share for 2024 have risen from $4.86 to $4.89. Shares of Sanofi are up 15.4% in the year-to-date period.
Earnings of Sanofi beat estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed a surprise of 7.68%. In the last reported quarter, Sanofi’searnings missed estimates by 3.33%.