Why Is Nektar (NKTR) Stock Up More Than 350% This Year?

Shares of Nektar Therapeutics (NASDAQ:NKTR) have skyrocketed almost 368% this year so far, substantially outperforming the industry’s increase of 8.2%. Let’s analyze the factors that led to this massive rally.

Nektar’s rapid progress on a robust pipeline this year including several study initiations with positive readouts and strategic collaborations has driven its share price consistently.

The company’s PEGylation technology has facilitated development of its several approved products in the United States and the EU through partnerships with healthcare companies namely, AstraZeneca's (NYSE:AZN) Movantik, UCB's Cimzia and Amgen's (NASDAQ:AMGN) Neulasta among others.

Notably, a randomized phase III confirmatory study (ATTAIN) began on the company’s lead candidate, Onzeald, late last year. The trial compares Onzeald with the single-agent chemotherapy of physician’s choice in patients with advanced breast cancer having brain metastases shortly. Positive results from the program could support a regulatory filing in the United States.

Apart from Onzeald, Nektar is working on developing other candidates. In September, the company announced initiation of phase I/II PROPEL study to evaluate the efficacy and safety of NKTR-214 in combination with Roche's Tecentriq (atezolizumab) and Merck's (NYSE:MRK) Keytruda (pembrolizumab).

A phase I/II trial, evaluating NKTR-214 as a potential combination treatment regimen with Bristol-Myers Squibb’s Opdivo, is also underway. The candidate is being examined across five tumor types (melanoma, kidney, colorectal, bladder and non-small cell lung cancer) and eight potential indications.In November, the company announced positive data from the study for treating patients with melanoma, renal cell carcinoma and non-small cell lung cancers.

Significantly in May, the company entered into a research collaboration with Takeda Pharmaceuticals to explore the combination of NKTR-214 with five oncology compounds from Takeda’s cancer portfolio.

Another candidate, NKTR-181, is being examined in a phase III program for treatment of chronic pain. In July, the company reported positive top-line findings from an oral human abuse potential study, analysing NKTR-181, to assess the opioid abuse potential compared with oxycodone. The company is planning to submit a new drug application for the candidate by April 2018.

Meanwhile, in March, the company initiated a phase I clinical study, evaluating NKTR-358, to treat a wide range of auto-immune diseases and inflammatory disorders.

Subsequently, in July, Nektar sealed a co-development deal with Elly Lilly and Company for NKTR-358. Pursuant to this agreement, the company will own responsibility for completing the ongoing phase I study on the candidate. Both the companies will share phase II development costs with Lilly acquiring the lion share (75%) of the total expenses.

Successful development and commercialization of undertrial candidates will boost the company’s top line, considering the lucrative markets they are targeting.

Nektar carries 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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