Morningstar | NKTR Updated Forecasts and Estimates from 20 Mar 2019
Nektar reported fourth-quarter results in line with our expectations, with nearly $40 million in revenue and a net loss of about $98 million. Research and development costs were about $109 million as the company funds several ongoing clinical development projects, most of which include the company's leading immuno-oncology candidate NKTR-214, now termed bempegaldesleukin or bempeg.Management's guidance for 2019 included $100 million-$110 million in revenue, below our expectations, and operating spend of $610 to $645 million, above our expectations. From a valuation perspective, we don't expect these adjustments to have a material impact on our fair value estimate of $39 per share, which is largely driven by the potential profitability of NKTR-214.
NKTR-181, Nektar's candidate for chronic pain, received a bit of a setback as the FDA extended the review period by three months to August 2019. The company said that the FDA requested additional preclinical data to support the abuse liability package in the filing, which will be a key factor in determining the drug's commercial success. A less restrictive scheduling would allow the pain medication to better compete against highly addictive opioids.
Ongoing trials of Nektar's pipeline therapies include the registrational trials of NKTR-214 and Bristol's Opdivo in various cancers, the early-phase study of NKTR-358 for lupus with Eli Lilly, and the study of NKTR-262 in combination for NKTR-214. Given that the combination of NKTR-262 and NKTR-214 are still in early days, we have a relatively low probability of approval, but the combination, which activates the body's immune system to fight cancer, has the potential to treat a wide range of cancers. Nektar is also initiating a trial of NKTR-255 (another immuno-oncology candidate) and a set of collaborative studies with NKTR-214 and several Pfizer therapies this year.
Nektar Therapeutics is a research-based biopharmaceutical company. The company's proprietary drugs and drug candidates that have either received regulatory approval or are being developed by the company or in collaboration with other pharmaceutical companies or independent investigators include: ONZEALD?, a topoisomerase I inhibitor targeted for advanced metastatic breast cancer in patients with brain metastases; NKTR-181, an orally-available mu-opioid analgesic molecule for moderate to severe chronic pain; NKTR-214, a CD122-biased immune-stimulatory cytokine targeted for oncology; NKTR-358 for autoimmune disease; NKTR-262 targeted for solid tumors; and NKTR-255 targeted for immuno-oncology.
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