On Friday, Jefferies analyst Roger Song upgraded Nektar Therapeutics (NASDAQ:NKTR) stock from Hold to Buy, doubling the price target from $1.00 to $2.00. The decision comes as Nektar prepares to announce the top-line results of their Phase 2b study for Rezpeg, a novel treatment for Atopic Dermatitis (AD), in the second quarter of 2025. Currently trading at $0.50, the stock has seen a significant decline of over 63% in the past six months.
Song reviewed the Phase 1b data for Rezpeg, an IL-2 Treg stimulator, and noted its promising efficacy and safety profile, which shows a novel mechanism of action (MOA) when compared to existing and pipeline competitors in the AD market. Based on these findings, Jefferies anticipates a favorable outcome from the upcoming data readout. While the company maintains a strong liquidity position with a current ratio of 4.26, it's currently experiencing rapid cash burn - one of 14 key insights available to Pro subscribers.
The upgrade reflects Jefferies' analysis of the potential market impact of Rezpeg and its unique MOA. With the current significant negative enterprise value (EV) of Nektar, Jefferies sees a skewed probability of reward versus risk ahead of the study results. This assessment has led to a more optimistic outlook on Nektar's shares, prompting the firm to advise investors of the stock's buy status. The company's market capitalization stands at $93 million, with analyst price targets ranging from $1.00 to $7.00.
The forthcoming Phase 2b study results are highly anticipated by both the company and investors, as they will provide critical insights into Rezpeg's potential as a treatment for AD. The increase in the price target to $2.00 is indicative of Jefferies' confidence in the success of Rezpeg and its impact on Nektar's financial performance.
Investors will be closely watching the market's response to the Phase 2b study results, which are expected to play a significant role in Nektar's future growth and positioning in the AD treatment landscape. The upgraded rating and revised price target by Jefferies signal a positive shift in market expectations for Nektar Therapeutics.
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