Early data for the company's combination cancer treatment is sparking the sell-off
Shares of Nektar Therapeutics (NASDAQ:NKTR) have plunged 30.8% to trade at $62.50 -- pacing for their worst day since August 2004 -- after early data from the company's experimental cancer treatment, NKTR-214, with Bristol-Myers Squibb's (BMY) Opdivo failed to meet Wall Street's expectations. Specifically, the response rate fell 50% once 14 additional patients were enrolled in the study, bringing the total number of participants to 27.
Heading into today's trading, NKTR stock had recently bounced from the $75 region after pulling back from its mid-March record high north of $111.36 -- a neighborhood that's home to a 38.2% Fibonacci retracement of the stock's August through March surge, and 140-day moving average. However, the shares are now trading at their lowest point since January, clinging to a positive year-to-date return.
More losses could be ahead should analysts issue downgrades and/or price-target cuts. Of the 10 analysts covering Nektar Therapeutics stock, nine maintain a "strong buy" rating. Plus, the average 12-month price target of $101.56 stands at a 63% premium to NKTR's current price.
Short sellers would certainly welcome more downside. While the security is on the short-sale restricted (SSR) list through tomorrow's trading, short interest jumped 14% in the two most recent reporting periods to 11.69 million shares -- the most since early November.