Friday - Jefferies, a well-known investment firm, has increased its price target on shares of Nektar Therapeutics (NASDAQ:NKTR) to $1.60, up from the previous target of $1.00. The firm has decided to maintain its Hold rating on the stock.
The adjustment comes as Nektar Therapeutics progresses with its clinical trials. The company is currently enrolling patients for a Phase 2b study of rezpeg in Atopic Dermatitis (AD), with expectations to present top-line data from a 16-week induction period in the first half of 2025.
Concurrently, Nektar is conducting a Phase 2b trial for rezpeg in Alopecia Areata (AA), which will assess the treatment over a span of 36 weeks, with results anticipated in the same timeframe.
The firm also reported that Nektar Therapeutics is set to engage in court-ordered mediation with pharmaceutical giant Lilly next week. This legal development could potentially influence the company's future operations and financial outlook.
Financially, Nektar ended the first quarter of 2024 with a strong cash position of $326.0 million. This capital is expected to fund the company's operations into the third quarter of 2026.
Jefferies notes that operational expenditure adjustments have been factored into the revised price target, supporting the decision to raise it while maintaining a Hold rating on the stock. The firm's commentary suggests a cautious but optimistic view of Nektar's financial health and the potential of its clinical programs.
InvestingPro Insights
Following the recent update from Jefferies on Nektar Therapeutics, investors might be interested in additional insights from InvestingPro. The company's financials reflect a strategic positioning with a strong cash reserve, as it holds more cash than debt on its balance sheet, which is a positive sign for its financial stability. This aligns with Jefferies' note on Nektar's solid cash position, expected to support operations well into 2026.
On the performance front, Nektar has shown a remarkable growth in its stock price, with a significant price uptick over the last six months and a strong return over the last month and three months. Specifically, the 6-month price total return stands at an impressive 251.73%, and the 1-month price total return is 24.03%. These metrics could signal to investors the market's growing confidence in Nektar's potential.
However, it's important to note that analysts do not anticipate the company will be profitable this year, and Nektar is quickly burning through cash. The company's P/E Ratio (Adjusted) for the last twelve months as of Q4 2023 stands at -1.82, indicating that profitability is an area of concern. Despite the high returns, investors should weigh these factors when considering the stock's future trajectory.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, which include insights such as Nektar's high shareholder yield and that its liquid assets exceed short-term obligations. To explore these further and gain access to comprehensive analytics, investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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