Shares of Nektar Therapeutics significantly tumbled on Thursday’s after-hours market after it discontinued clinical trials involving its key cancer drug.
The American biopharmaceutical company slumped 17.05% or 1.05 points to $5.11 per share. It trailed a drop of 0.16% or 0.01 points to $6.16 per share in the regular trading session.
This downturn dragged $197.59 million to the company’s valuation. Moreover, the firm has traded negatively since the start of the year, down 54.90% or 7.50 points.
The experiments that Nektar stopped included a combination of its drug bempegaldesleukin with Bristol Myers Squibb Co’s cancer medicine Opdivo.
The drugs failed to meet goals in another late-stage study in patients with renal cell carcinoma. In addition, another study for urothelial carcinoma, a type of bladder cancer, went wrong.
In 2020, the firms tested the combination therapy through an agreement. However, both companies also stopped the two late-stage studies on melanoma patients after one of the trials failed.
This 783-patient experiment declined to meet all three objectives to improve overall survival. It mainly aims to produce a drug that will show a significant reduction in cancer. Consequently, it targets to increase the amount of time it takes for the disease to worsen.
In line with this, Nektar stated that it would consider reining its cash spending. The business holds about $800.00 million in cash at the end of December.
Previously, brokerage Oppenheimer forecasted worldwide risk-unadjusted sales for bempegaldesleukin to reach $3.70 billion in 2038.
Moreover, the biopharmaceutical company also halted the merger tryouts with Merck & Co Inc’s cancer drug Keytruda. This study involved a partnership entered with privately-owned SFJ Pharmaceuticals last year.
Correspondingly, Nektar now expects to announce a new strategic plan to rein in spending to meet its cash runway goals.
What is next for Nektar Therapeutics?
Nektar Therapeutics last announced its earnings results in February. The firm reported $0.79 EPS for the quarter, surpassing the consensus estimate of $0.81.
However, the company had a negative net margin of 514.03% and a dampened return on equity of 61.98%.
Eventually, Nektar had quarterly revenue of $25.00 million, lower than the expectations of $25.33 million.
Accordingly, the Bank of America recently pulled shares of the business from a neutral rating to underperform. It also lowered its target price for the stock from $18.00 to $6.00. Likewise, JPMorgan Chase & Co. pared their price objective on shares of Nektar from $24.00 to $17.00.
Nevertheless, experts anticipate the company’s remaining cash to likely fund its pipeline development and operations until 2024.