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The longs and the shorts continue to battle over Nektar Therapeutics (NKTR.) Right now the shorts have the best of that fight. No contest. The shares of this biotech fell another 1.24% today to close at $51.71. A little more than a month ago they were at $68.49.

But I think the direction of the battle will reverse over the course of the next month. Holding on now is the right decision. Buying now, if you’ve got nerves of steel for this speculative battle, is an even better decision.

On October 2 shares of Nektar plunged as the Motley Fool picked up a report from analyst, Aaron Wedlund, at Plainview. Wedlund’s basic argument is that NKTR-214, the cancer drug candidate that Bristol Myers-Squibb bought into for $1.8 billion, is worthless. You can follow Wedlund’s argument and the refutations on Seeking Alpha.

There’s no secret that Wedlund is short Nektar. If he believes what he wrote, he should be.

The question for the rest of us, however, is Is he right?

I think he’s wrong and that the next release of data from Nektar will prove him wrong. The company is scheduled for ten clinical and preclinical data presentations across its immuno-oncology portfolio at the upcoming Society for Immunotherapy of Cancer (SITC) Annual Meeting from November 7 though 11. Besides the presentations Nektar will also host a webcast conference call with melanoma specialists and company management on Saturday, November 10th at 9:30 a.m. New York time. (Bristol Myers is scheduled to hold its regular quarterly conference call on October 25. I’d assume they will have something to say about NKTR-214.)

I haven’t seen Nektar’s data–no one outside the company and its parters and the peer reviewers of its work has as far as I know. But that presentation schedule and the conference call certainly aren’t what you’d expect from a company trying to hide bad data or bad results. I’m fairly sure that the small number of patients enrolled in these trials will give shorts a way to argue that NKTR-214 doesn’t work. But I’d also suspect that a lot of shorts will be looking to cover as we get close to that data. Why risk big profits? If nothing else that short-covering should send Nektar shares higher as we get closer to the SITC meeting. (I think that the short-sellers arguments about the small number of patients involved in these trials and the implication that this is proves that NKTR-214 doesn’t work or that Nektar is hiding something relies on some “interesting” slight of hand about the company’s announced plans for the trials.)

Whether the stock continues to go up after the data is released depends, of course, on the data. Wedlund’s argument is that NKTR-214 is “simply a pegylated form of a well-understood, naturally occurring cytokine known as interleukin 2.” And that the data the company released from earlier trials clearly show that NKTR-214 doesn’t work.

I think he’s wrong on both points. His report is exploiting what is, in my opinion, a temporary hole in the Nektar strategy for releasing its data. The last data release on clinical trials by the company was an attempt to be as transparent as possible, I’d say. Which means that Nektar reported early stage data that was hard to interpret on a small number of patients.

Back in its August update Nektar discussed the release of updated data from its melanoma trials with NKTR-214. The data, the company said, will be from a cohort of 38 patients, up from the data on 28 patients presented earlier. Nektar also said that it would release data on other NKTR-214/Odivo trials on a cohort by cohort basis. Nektar and Bristol Myers have said they will initiate three NKTR-214/Opdivo combination trails by the end of 2018 with more to follow in 2019. The trials, Nektar has said, will include a Phase III trial for 1L melanoma (with 760 patients enrolled) with data to be released 22 months after the first patient is dosed. Nektar also will continue to finalize the trial designs for bladder cancer.

The shorts would have you believe that after Bristol Myers–the only company that, as BioInvest’s Medical Technology Stock Letter notes, with two approved immune oncology drugs–has seen the data from NKTR-214 trials, it has continued to pursue this extremely aggressive and expensive program of trials. Of course, it is possible that after having spend $1.8 billion Bristol Myers is in denial about the prospects for NKTR, but I can’t say that I’d put a money on that possibility.

At the current $51.76 price and a market cap of just $8.93 billion, the market isn’t giving NKTR any credit for anything from NKTR-214. And that NKTR-214 isn’t the company’s only cancer drug candidates–NKTR-262 and  NKTR-255 are themselves moving through the pipeline. And I still expect approval from the U.S. Food & Drug Administration for the company’s new non-addictive opioid painkiller in 2019.

Full disclosure: I own shares of Nektar and call options in my personal portfolios