At least two brokerages have downgraded NKTR stock
Nektar Therapeutics (NASDAQ:NKTR) stock opened at its lowest level since mid-2017 today -- down 36% at $18.01 -- after the drugmaker unveiled manufacturing issues with bempeg, its experimental cancer treatment. Specifically, NKTR said it discovered two lots of the drug were manufactured differently than the rest in a recent clinical trial, and it would not be presenting data at the European Society for Medical Oncology conference.
Separately, the drugmaker reported a second-quarter loss of 63 cents per share, narrower than analysts were expecting. Revenue, meanwhile, arrived at $23.3 million, less than the consensus estimate.
Analysts have been quick to chime in, with J.P. Morgan Securities downgrading NKTR stock to "neutral" from "overweight," and slashing its December 2020 price target to $33, compared to its December 2019 target price of $62. Mizuho also cut its rating on the equity to "neutral," and joined at least two other firms in lowering Nektar Therapeutics' price target, while an analyst at SVB Leerink said this will "likely diminish investor confidence in NKTR management."
This comes just days after the stock popped on a big Food and Drug Administration (FDA) win, but NKTR remains a long-term laggard. Year-over-year, the shares had surrendered 47% through last night's close at $29.57. Should today's early downside hold through the close, it would mark Nektar Therapeutics stock's worst day since June 4, 2018, when it plunged 41.8%.
Short sellers have been in the driver's seat during the security's trek lower. The 23.1 million NKTR shares controlled by these bearish bettors represents a healthy 14.8% of the stock's available float, or 15.5 times the average daily trading volume. These bears are sidelined today, though, with Nektar Therapeutics sent to the short-sale restricted list out of the gate.