Nektar analyst report causing drop

Investment Analysis Clubs Saul’s Investing Discussions
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Here’s a link to the analyst report that apparently caused the decline in Nectar early this morning.

https://s3.amazonaws.com/plainviewllc/Nektar+Therapeutics+Re…

It’s very detailed and sounds very knowledgeable, but I have zero knowledge on the subject and no way of evaluating how valid its conclusions are. I’m no longer in Nectar but I know some on the board still follow it.

Saul

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I tried reading this 37 page report, but it is far, far beyond me. I think only a scientist could actually verify everything in here.

“plainview” also discloses that they are shorting the stock, no surprise there.

I read some comments in SA, which indicate the author is a kid in Wisconsin who has been fired from IB twice and apparently runs this fund from his parents house or something along those lines.

Amazing how these types of reports can move the stock so much.

The 37 page gist of it, that 214 is a complete failure. (no mention of 181, or any of the other compounds ((unless I scrolled right past any mention)) or the near $2 billion in cash the company has.)

Matt

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I saw similar comments about the author on stocktwits. Does this kid have a crystal ball showing him results of trials that aren’t finished yet?

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Yeah, I tried skimming it but it would be hard to really get into it without spending hours of time. One thing stood out to me though. The author claimed that the sustained low dose that N-214 achieves is bad for treating cancer, i.e., for cancer you need short-lasting high dose to kill cancer cells. That seems true for traditional chemotherapy drugs that are non-specific (they can kill all cells, not just cancerous ones). In that case, you would want a brief dose so as to avoid killing too many cells in the rest of your body. But it seems the opposite in immuno-oncology, where you have a specific effect (the specificity supplied by the immune system), and thus would like to have the effect sustained instead of brief. That’s my suspicion anyway…perhaps someone with more IO knowledge could confirm this suspicion.

-lemur

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Ironically enough, I just heard on NPR this morning that a Nobel prize was being jointly awarded to 2 different scientists for their work on checkpoint inhibitors as a cancer treatment, which immediately brought to mind the prior discussions of Nektar on this board.

Here are some links some info about the Nobel Prize announcement, which is tangentially relevant to Nektar Therapeutics.

https://www.nobelprize.org/prizes/medicine/2018/summary/

https://www.nature.com/articles/d41586-018-06751-0

https://www.popularmechanics.com/science/health/a23550429/im…

https://www.bbc.com/news/health-45704322

https://www.nytimes.com/2018/10/01/health/nobel-prize-medici…

-volfan84
no present NKTR position…the timing of this report seems quite ironic (to me) in light of this Nobel announcement
Tempted to re-consider adding a NKTR position, especially since my wash sale period has passed as of a week or so ago from the last position

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Saul,

When I look at the report, I see two things:

  1. “This was followed by guidance on the Q2 2018 earnings call to only expect data for an additional 10 patients at SITC 2018. First rule of biotechnology investing: if a company withholds data from investors, that data is always bad. Nektar’s promises may sound sweet, but reality will prove to be very bitter.”

Nothing new here, just an added twist of the knife.

  1. " As of the publication date of this report, Plainview LLC and its affiliates (collectively “Plainview”), others that contributed research to this report and others that we have shared our research with (collectively, the “Authors”) have short positions
    in and may own option interests on the stock of Nektar Therapeutics (“Nektar”), and stand to realize gains in the event that the price of the stock decreases. Following publication of the report, the Authors may transact in the securities of the company covered herein. All content in this report represent the opinions of Plainview. The Authors have obtained all information herein from sources they believe to be accurate and reliable. However, such information is presented “as is,” without warranty of any kind – whether express or implied. The Authors make no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results obtained from its use. All expressions of opinion are subject to change without notice, and the Authors do not undertake to update or supplement this report or any information contained herein."

What I get here is they are shorting the stock and want a payday.

Gene
All holdings and some statistics on my profile page
http://my.fool.com/profile/gdett2/info.aspx

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Hi Lemur,

I work for a small struggling biotech in the IO space. We (and others) have found with many of our pre-clinical studies that “more” is not better when it comes to IO drugs, so their approach is pretty standard practice in the IO field. Targeted IO therapies are nothing like the various chemotherapies out there (which kill mostly fast growing cells at specific stages of the cell cycle), and IO drugs behave very differently.

OT: The science-speak in the report is how we talk at home, we even have the kids using “aliquot” in sentences.

B.

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Here is a new article up on Seeking Alpha that doesn’t seem to think highly of the prospects for NKTR-214.

https://seekingalpha.com/article/4209320-pegging-value-nktrm…

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Isn’t this the same analyst/group? Plainview?

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Yes, this is the same person who is shorting the stock. One technique to promote or short a stock is to write an article which is really long with lots of charts, formulas, etc. Most readers will be convinced that this must be real since so much efforts were made. The problem is mostly likely most of the “research” was done after they took the position. I remember Bill Ackman used to produce a 500 pages report for a stock just to convince other investors.

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Here is a new article up on Seeking Alpha that doesn’t seem to think highly of the prospects for NKTR-214.

hi volfan, it’s not actually a new article. It’s basically the same article and it’s by the same people (Plainview), which makes it seem to me more like just a short attack. But that’s just my opinion without ever reading the article.
Saul

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