Nektar, where I stand currently:
I bought back into Nektar at about $103 in the beginning of March. In May it fell into the $70’s due to what seemed to be irrelevant negative results by other companies spilling over, and Nektar started bouncing back. There had been no negative company-specific news from Nektar, or about Nektar, or any news yet from the key study that has just begun. They had had a terrific conference call when they released March quarter results, which which I wrote up on the board. I was feeling more and more confident. When the price fell on what we considered to be that misunderstanding in May, I added small amounts at around $79. But then they reported preliminary results at the ASCO conference in early June, and the price sold off again, enormously, into the low $50 range. Again we felt, for what still seems like good reasons, that Nektar’s results had been misunderstood, and I added some more more on the way down.
Then I started thinking about it, and I decided that one misunderstanding was one thing, but two misunderstanding was something else again. And here was Nektar, with what was an 8% position in my portfolio, with hopes of becoming a category killer some day (and which may well become one but who knows for sure), and MongoDB, with only a 3.7% position, which already was a category killer, and was proving it. That didn’t make sense to me. I decided to sell back all I had added to Nektar on the basis of the “misunderstandings” and add it to MongoDB instead, which I did in the last few days.
So right now I have a 5.8% position in Mongo, and a 4.0% in Nektar, and that suits me better. If N-214 comes through Nektar will probably triple in short order, and 4% will be quite enough. If N-214 doesn’t come through, Nektar has multiple other possibilities in its pipeline, and I don’t see it really dropping much from here, but I could see it stagnant for some time while we wait for intermediate study results. (Personally, I believe N-214 will do just fine, but this is June, and the next test results aren’t even scheduled to be released until November. Yes, 4.0% is probably enough for now.)
And I am happy to currently be up almost 49% year-to-date in spite of the 50% haircut on Nektar.
Best,
Saul