More at $55.90 for me
As of this morning, I built a 5%+ position in NKTR around $53 (including some long-term options).
As a non-medical expert, I’ve been absolutely enthralled with the company and prospects for the last 12 months. What potential to significantly better the world!
However, from a strictly price action standpoint (TA), parabolic moves by companies without significant cash flow / revenue / earnings (for lack of a better term, “story stocks”), are mostly followed by swift regressions downwards. And NKTR had been significantly overbought from late 2017 to early 2018. Hence, I’ve been waiting for an entry point, and today, on semi-positive / neutral news the bottom fell out.
From a technical perspective, there may still be room left to fall (low $30’s as an absolute bottom), but I couldn’t pass up the opportunity to get involved in the potential upside at <$8B EV. I will purchase more if it falls into the $40’s, but we have very quickly entered over-sold conditions.
Good luck to all. And for humanity, I hope NKTR wildly succeeds!
Stephen
2 Likes
I’m in too. I have been watching this one since you first mentioned it, and I am impressed with everything so far. May it turn out as good as it seems from the trials for everyone.
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Jack:
THANK YOU! As a former biotech finance executive at several companies in the Bay Area who only understands the bigger picture and does not have as firm a grasp on the details and Science, I rely on PhD’s like you to dumb it down and synthesize it for me. Your education and expertise in the field and this concise interpretation of the results is greatly appreciated and corresponds with my more limited review of the ASCO presentation, as well as those of a few other Biotech friend’s opinions I respect.
I added a little to my position this morning around $53/share and plan to maintain my current 4% position of my total portfolio. That is a lot for me to have in a company with no revenues or proven products, but I consider NKTR a relative exception with deep pockets (very large cash position), cutting edge science and solid partnerships. The next 12 months will prove very interesting. Thanks again!
Victor
6 Likes
Etrade has always given me two to three days for a margin call. Been a long while, but enough time to wire money w no problem. Don’t know if that is still their policy.
Tinker
These N2 patients are the interpretative problem as their mean time on trial is 4-5 months and thus they are skewing the response data downward as they have just not been on trial long enough (they look like the N1 patients back in November).
That’s all well and good, but NKTR set the criteria and yet failed to communicate the result as you have attempted to do here. Still worrisome.
🆁🅶🅱
6 Likes
In for a penny, in for a pound - tossed another chip on the table and increased number of shares by another 67% at $56 even.
Seems more reason to think of the results as non-catastrophic than catastrophic to the company.
We’ll see,
Jeff
1 Like
That’s all well and good, but NKTR set the criteria and yet failed to communicate the result as you have attempted to do here. Still worrisome.
I have to disagree. They presented scientific results, which are by their nature complex. Moreover, for scientific and legal reasons, they probably have to be more strict with their language than we can be on this board. For what it’s worth, they did communicate that the results were positive. That is clear in all of their summary language and the continuation to phase 3 trials. If investors interpreted that as negative, then that is on them.
It is not the job of the company to babysit the anxieties of individual investors. A particular analyst got this wrong (who knows why) and the market got a case of the jitters. How is that NKTR’s fault?
I have no worries about this. In fact, I am happy that I got to buy more at a better entry price.
-lemur
6 Likes
They presented scientific results, which are by their nature complex
that does not require them to present it in a complex, or frankly awful, way. Did you even look at their slide deck? Its an utter eye sore, moreso than usual pharma slide decks.
How is that NKTR’s fault?
Well, it was their presentation… Having a higher share price is beneficial for them when they need to raise additional funds, negotiate a buy out, etc. I do not think many publicly traded biotechs are going, “oh good, our share price fell 40% today!”
If the data was so great, then they should have done a better job explaining it.
¯_(?)_/¯
28 Likes
The share price did not fall 40%+ due to small time investors panicking. It was institutions that sold and they sold very hard, and the small time investors followed suit.
The actual end point for 214 is to be determined in the future. The numbers they used were quite tiny to begin with in regards to number of patience. They will have plenty of time to give each patient time to respond in Phase 3, and I am sure there will be updates on the numbers when the data matures again on the additional patients.
But no one is missing the fact that this drug does better as time drags on. That is being taken into account. What they are looking at is the competitive environment that 214 has to sell into if approved. They want front line (at least in the future, if not outright at the beginning). Not second to third line treatment. The difference in value is stark, in the billions and billions of dollars. Thus the forward looking valuation, off the back of napkins for many, had to go way down.
Did they overshoot? Probably. On the New Paradigm board I wrote about the almost universal pattern fo successful biotechs. KITE was an exception to the rule by JUNO followed it. The stage we are in now is the Martha Stewart stage where usually someone goes to jail (that won’t happen here, but it feels like someone should). This has happened to practically every successful biotech I ever invested in. And fortunately I usually did not invest in them until the company reached this stage of clinical development (although I got stuck in EXEL just before this).
The next stage, after panic, illegal insider selling, arrests etc. (Martha Stewart stage - and again the criminal element won’t happen here but I use if for effect) is that o average, say 18 months, the stock will make a remarkable comeback and may even be multiples higher than from where it fell.
However, given how high NKTR was before it fell, I do not know if the multiples higher will hold here, but the same general thing will happen in this stage.
This is the time that tests your fortitude, like no other in investing. Easy for me to say because I do not own any (my 2 day trial period convinced me I do not need biotechs in my life at this point in my life, so got rid of it and bought more NVDA and ANET at the time), but it is also the time to take a very deep dive into the company, and for those who have been waiting for the Martha Stewart stage to hit, see if they really do want to dive in big time and then go in hybernation as the nearly inevitable recovery stage slowly rolls out.
Tinker
23 Likes
Don’t recall if Merk’s PD-1 inhibitor been discussed on Saul’s board as a competitor to NKTR-214. Does anyone on this board with expertise in bio-tech have a perspective on this TMF author’s remarks in his article titled:
“Is Nektar Therapeutics Stock a Bargain Now?
A highly anticipated presentation left investors with more questions than answers. Is the stock a bad-news buy?”
“…Even if the combo (of NKTR-214 and Opdivo) can produce a long-term survival benefit, it’s going to be hard to beat the results that Merck & Co.'s PD-1 inhibitor recently provided. Adding Merck’s Keytruda to standard chemotherapy reduced the risk of death by 51% for newly diagnosed patients with advanced-stage lung cancer.”
https://www.fool.com/investing/2018/06/04/is-nektar-therapeu…
sjo
9 Likes
Although the circumstances are completely different… except being biotech… I’m reminded of “the good 'ol days” when I lost 1/3 of my portfolio in just a few minutes after a less-stellar-than-expected response from the FDA for a drug from DNDN.
It was enough to make me raise my eyebrows. 
Didn’t get worked up because I figured I could earn it back easily enough.
Since that time, I’ve been less… enthusiastic… regarding biotech “investments”. In quotes because there is typically an unusually high degree of gambling in the overall thesis.
Interesting times. 
Rob
Rule Breaker / Market Pass Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
7 Likes
<<<I think Nektar’s still risky, but there’s a bargain here for intrepid investors. This October, look for more trial data with Opdivo plus NKTR-214 in lung cancer, which could send the stock screaming back. Also, NKTR-181 could provide more lift down the road.>>>
From the article you linked to sjo. Also in the article is 181, which is not affected by ASCO. I have no idea how 181 will do commercially, but from a substantive basis approval is very high probability unless the FDA decides they want more information (It has been so long, I forget what they horrible letter is called).
More data to be provided in October, that is also about the time to expect 181 decision from the FDA, plus Lupus drug, another cancer drug, and multiple indications.
NKTR is the textbook biotech company to ru through the clinical biotech syndrome (each and every stage of it). I will have to find that post again. It happens so often.
I may do a deep dive tonight on NKTR. There is much here that can rebounce the shares (but yeah, also risk if an “approval” letter is received by the FDA for 181 (there I remembered it), or if subsequent 214 results turn out to disappoint, Lupus drug results don’t wow, etc. But a lot there to get NKTR easily through the subsequent post Martha Stewart stage.
Tinker
4 Likes
4 years of burn with current cash, which doesn’t include a 1.8B check from BMY which pushes the runway north of a decade
I feel very comfortable initiating the position I initiated today in NKTR. I had missed the run up largely due to how I had been unwinding my ROTH from Vanguard funds to picks.
Biotech’s will never dominate my portfolio, but the chips I have on the table in NKTR feel much less exposed than my bucket of CRSP, EDIT, and NTLA
4 years of burn with current cash, which doesn’t include a 1.8B check from BMY which pushes the runway north of a decade
well…
http://ir.nektar.com/news-releases/news-release-details/nekt…
Cash and investments in marketable securities at March 31, 2018 were $333.8 million as compared to $353.2 million at December 31, 2017. This does not include the $1.0 billion upfront payment and $850.0 million share purchase proceeds received on April 3, 2018, as a result of our new Bristol-Myers Squibb collaboration…
(I count 2.2b approximately)
In the first quarter of 2018, net loss was $95.8 million
So, I count 400m/yr, so, 4 years worth; which does include the 1.8b check, but does NOT include increased expenses for much larger clinical trials. Though it also does not include any checks for 181, which they have already said they are actively seeking to unload. They probably have 2 years worth of cash when you take into account that their R&D expenses will increase ALOT from current rates given all the trials they have going on. Dont be surprised if they trim a few trials when costs start ramping up.
9 Likes
Given nektar’s valuation, I would assume they should be able to sell shares and raise money if required. I think running out of cash is less of a concern than having a viable products.
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I’m in at $54.
Brace yourself for another 20% drop in the next couple of days.
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I am by no means an expert on price action, and I am probably too upbeat on NKTR (as upbeat as I am now underwater), but I listened to the entire investors presentation (nearly 2 hours), which is much more in depth than the 10 minute ASCO talk. It is available on NKTR website.
Thanks so much to Jack for recommending it. I finally got around to listening this morning. I just listened to the first 40 minutes or so, which was a discussion of the clinical results, before they got into the biological marker stuff, where I zoned out. I left quite reassured. It’s worth the time invested.
Saul
8 Likes
Jon Najarian follows options volume to buy stocks and options. He said in CNBC that there are buyers of the Jan 2019 75s calls today. So seems like sentiment is for a bounce. He just mentioned this on CNBC and the stock popped to the 56.50 area.
Rob
2 Likes
I may do a deep dive tonight on NKTR. There is much here that can rebounce the shares (but yeah, also risk if an “approval” letter is received by the FDA for 181 (there I remembered it), or if subsequent 214 results turn out to disappoint, Lupus drug results don’t wow, etc. But a lot there to get NKTR easily through the subsequent post Martha Stewart stage.
Tinker
Thanks for your perspective. I am in medicine and typically avoid investing in biotechs given the uncertainty in drug development. I decided to take a small long position (a January 2020 call option) in NKTR given the chance of a bounce over that time frame. I didn’t put any money on NKTR that I don’t feel comfortable losing completely but the leveraged position will pay off handsomely if the bounce occurs.
dave