NKTR - Nektar sheds 45% as trial setback prompts Jefferies downgrade

• Nektar Therapeutics ( NASDAQ: NKTR ) lost ~46% on Friday as Jefferies downgraded the biopharma to Underperform from Hold after its Phase 2 trial for systemic lupus erythematosus (SLE) candidate Rezpeg failed to meet the main goal.
• The analyst Roger Song argued that Eli Lilly ( LLY ) has opted not to advance Rezpeg to Phase 3 development as the candidate fell short of the high efficacy bar set by the partner.
• "We see lower confidence and risk of stopping entire Rezpeg program," the analyst wrote, while ruling out any impact on other indications, including atopic dermatitis (AD) given the different disease profiles.
• Song cites the company's cash runway into mid-2025 and appreciates the management's efforts to implement further organizational changes to reduce operating expenditure significantly.
• "However, we do not see the current pipeline justifies the current market value and limited meaningful catalysts to drive near-term upside," the analyst wrote as he trimmed NKTR price target to $1.50 from $3.20 per share.
• Read: Seeking Alpha contributor Stephen Simpson reaffirmed his Neutral rating on Nektar ( NKTR ) ahead of the readout.

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