Nektar Erases $1.8 Billion of Value on Doubts Over Its Cancer Drug

(Bloomberg) -- Investors sentiment on Nektar Therapeutics has soured as a manufacturing snafu raised concern about what had initially been seen as promising clinical data for its experimental cancer drug bempegaldesleukin.

As Wall Street analysts continue to debate the drug’s potential, investors are fleeing fast. The stock fell 8% on Monday, bringing its two-day loss to 36%, or about $1.8 billion of market value. Nektar is now 2019’s worst performer in the S&P 500, after taking the top spot shortly after joining the benchmark last year.

Some bulls have already backpedaled after the company also said it’s collaboration with Bristol-Myers Squibb Co. has narrowed to fewer studies, and lung cancer data won’t be presented at the ESMO conference in Barcelona next month.

Nektar has seen three downgrades just last week, with the number of hold or equivalent ratings rising to a total of six. Eight other analysts who cover the stock stood by their bullish recommendations.

The debate over bempegaldesleukin, formerly known as NKTR-214, is set to continue until the company reports first results from its late-stage studies, which are not expected until next year.

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer

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