A novice's reasons for not buying more NKTR

Investment Analysis Clubs Saul’s Investing Discussions
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I realize that this will not be a popular view on this board - and I appreciate any thoughts that can get me to change my mind on this. NKTR is one of my biggest holdings but I just caught up on some of the updates on the company and I’m concerned…

  1. It is very confusing when a whole list of drugs are listed - all in different stages of drug trials. While this may be perceived as “diversification”, it puts me off - it’s as if confusion is the name of the game.

  2. While this immune approach is popular at present against cancer, there are many many different types of cancer and many different types of antibodies that can be developed against any one of the cancers. But it seems to be a case of ROULETTE or russian roulette, because it’s all unpredictable.

  3. Some cancers such as melanoma often readily respond to treatment at first but later the cancer escapes from the treatment.

  4. My conclusion is NOT to buy any more shares in this area, but to hold on to what I have for 1 more year and then sell if nothing further develops.

Any simple counter arguments are most appreciated!
Thanks…Marc

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Marc,

First, I wouldn’t have made NKTR one of your largest holdings. It’s a 5% position for me at most at all times just because of it’s volatility. Saul has a bigger position than me (or did as of last month) but that’s his decision. I’ll address the rest of your post point by point.

  1. Why would the development of multiple drugs with almost 2 billion in the bank be problematic? Can you please name one publicly traded pharmaceutical company that doesn’t have more than one drug in development? Why would you think all of their drugs should be in the same stage of development? You think Nektar is trying to confuse it’s investors because they are investigating multiple I/O therapies for multiple I/O diagnoses? Sorry, I don’t see how you came to that conclusion.

  2. Sure many antibodies can be developed but which ones work? The track record for antibody development isn’t stellar. Many more failures than successes. Nektar’s advantage is how they make it.

  3. Can’t this be said for almost every single chemotherapeutic agent in existence? This is what the studies are for, to establish the duration of the response. We already know the response exists, how good is it and how long does it last are the questions being investigated currently.

  4. Why 1 year? What’s magical about a year? Some imaginary line in the sand isn’t a useful investment strategy IMO. If you aren’t comfortable with the investment then get out now. Buy something you like better. It seems to me you are more frustrated with the recent downturn in the stock than anything else. I feel your pain but I’m keeping my allocation at current levels because I’m comfortable with its portion of my portfolio and I believe the downturn to be a temporary result of recent trial results that have nothing to do with NKTR.

MC

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I feel your pain but I’m keeping my allocation at current levels because I’m comfortable with its portion of my portfolio and I believe the downturn to be a temporary result of recent trial results that have nothing to do with NKTR.

Having just swing-traded NKTR from $76 (bought last Friday) to $84.50 (sold earlier Monday morning) I am wondering if you would mind expanding on these “recent trial results that have nothing to do with NKTR” which you mentioned?

I intend to scalp and swing-trade NKTR over and over in the coming months. I stay aware of earnings dates and biopharma catalyst dates (trial results), so, I’d love to hear what your take is on NKTR’s downturn.

p.s. This was my first swing-trade of NKTR. I like the volatility, average true range and volume on the one-minute charts.

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“Any simple counter arguments are most appreciated!
Thanks…Marc”

My thinking is: the next big insight into the stock will be on June 2 when they present an abstract on their stuff at the ASCO Conference. According to their CC we are invited to listen in. A smaller but perhaps important insite is that their abstract was selected from 3000 other abstracts that were submitted.

Don’t quote me. I might be a little to generalized for the purpose of illustration.

John

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