Nektar Therapeutics (NKTR) shares finished the day up 14.15% on fairly preliminary, but very important data from the trials of the company’s lead cancer drug. Those results go a long way to validating the company’s entire pipeline of drug candidates to treat cancer by boosting the body’s own immune system to fight tumors. (For more on that news see my earlier post on my subscription sites JubakAm.com and Juggling with Knives. That post on Juggling with Knives is a Post of the Month so non-subscribers can read it for free. If you want to follow my options trades in Nektar and other stocks, you’ll need, however, to subscribe to one of those two sites.)
Perhaps over shadowed by that news, the company also reported significant movement on getting its new opioid, as effective as current opioids but much less addictive in trials to date, to the U.S. Food & Drug Administration, through the regulatory process on an expedited schedule, and to the market.
It’s news on that drug candidate that will provide the next leg up for Nektar shares and that news is why I’m recommending holding onto current options and share positions. And adding the shares to my Jubak Picks portfolio.
In its most recent issue the Medical Technology Stock Letter (Bioinvest.com) reported that Nektar recently met with the Food & Drug Administration and the agency gave the company the green light to apply for approval for NKTR 181, the company’s new opioid candidate, on the basis of a single Phase III trial and two HAL (human abuse liability) trials rather than going through a lengthier series of trials. I think this is an indication that members of Congress and the White House who have met with Nektar have come away with intense interest in moving the drug to market as quickly as is consistent with health studies. Let’s face it, Congress and the President are under extraordinary pressure to do something about the opioid epidemic in the United States. And while NKTR181 would do nothing for anyone already addicted to opioids or to stem the traffic in artificial opioids easy available via the Internet from China, it would be a way of reducing the number of new addicts resulting from medical prescriptions of painkillers. I think there’s a good chance that the FDA will fast track the drug’s approval process. Nektar has indicated that it will file for approval with the FDA in April.
That makes the May 18, 2018 call options with a strike price of $26 that I added on November 1 to my Volatility Portfolio very well positioned on the calendar for what is now the likely schedule at the FDA. With that regulatory process likely to move on that schedule I’d suggest holding onto shares of Nectar, even after the recent run in the stock. I’ll be adding the shares to my Jubak Picks portfolio tomorrow November 14 with a target price of $47 a share. The stock closed today at $37.10.
Full disclosure: I own call options and the underlying shares in Nektar in my personal portfolios.