Nektar Therapeutics (NKTR) faced a setback in the second quarter of 2024, reporting a loss per share of 25 cents, wider than expected. The Zacks Consensus Estimate was a loss of 21 cents but the actual performance fell short.
Despite the earnings miss, the company saw total revenues of $23.5 million, marking a 14.6% increase year over year. This outperformance beat the Zacks Consensus Estimate by a significant margin.
Choppy Waters in Q2
The second quarter saw a mixed bag of results for Nektar, with a substantial 42.5% year-over-year increase in product sales to $6.6 million. Non-cash royalty revenues amounted to $16.8 million, up around 6.1% from the same period last year.
While research and development (R&D) expenses remained flat at $29.7 million, general and administrative (G&A) expenses saw a 14.5% increase to $20.5 million.
The market reaction was swift as Nektar’s stock dropped 4.9% in after-hours trading on August 8, reflecting investor sentiment in response to the mixed quarterly results. However, year-to-date, Nektar’s shares have soared 114.1%, defying the industry’s decline of 5.2%.
Pipeline Progress
One of Nektar’s key pipeline candidates is rezpegaldesleukin (rezpeg), a self-administered injection under development for autoimmune and inflammatory conditions. Nektar regained full rights to rezpeg from Eli Lilly (LLY) in April 2023 and has taken over its clinical development.
The company’s phase IIb studies for atopic dermatitis and alopecia areata are progressing, with data readouts expected in 2025. These milestones could potentially shape Nektar’s future trajectory in the biopharmaceutical landscape.
Analyst Perspective and Market Outlook
With a Zacks Rank #3 (Hold), Nektar continues to face challenges and uncertainties despite its promising pipeline. Investors are advised to closely monitor the company’s progress and upcoming clinical data releases.
Within the biotech sector, stocks like Exact Sciences Corporation and Entrada Therapeutics, Inc. (TRDA) have shown strong potential with Zacks Rank #1 (Strong Buy) ratings. These companies present alternative investment opportunities with their distinct growth trajectories.
While Nektar navigates through its current challenges, strategic decisions and clinical advancements will play a pivotal role in shaping its financial performance and market positioning in the years to come.
