NKTR: Upcoming Phase 2b Data Readouts Will Drive Renewed Upside Momentum

Key Takeaways

• Advancing innovative therapies like REZPEG in large, underserved markets could drive substantial revenue growth and improve long-term financial performance.
  
• Strong cash reserves and accelerated regulatory paths enable operational stability, support pipeline expansion, and reduce near-term financial risks.
  
• Heavy reliance on REZPEG's uncertain success, persistent losses, strong competition, and funding risks threaten Nektar's future growth, shareholder value, and pipeline sustainability.

Catalysts

A biopharmaceutical company, focuses on discovering and developing therapies that selectively modulate the immune system to treat autoimmune disorders in the United States and internationally.

• Strong initial Phase IIb and ongoing data for REZPEG in atopic dermatitis, combined with a large and growing addressable market (expected to reach nearly $30B by 2033), position Nektar to access significant new revenue streams and improve long-term earnings as the population ages and chronic inflammatory diseases rise globally.
  
• FDA Fast Track designation for REZPEG in both atopic dermatitis and alopecia areata gives Nektar an accelerated regulatory path, potentially reducing time to market and R&D costs, which should improve net margins and cash flow if approvals are achieved ahead of competitors.
  
• Positive emerging data and differentiation from existing therapies (e.g., faster onset, fewer side effects, novel mechanism) increase the probability of commercial success and uptake in a market moving toward personalized, immune-modulating treatments, supporting future top-line revenue growth.
  
• Robust cash position after the recent equity raise extends runway into 2027, providing operational stability to advance late-stage assets and initiate Phase III trials without near-term dilution or financing risk, which supports earnings predictability and reduces financial leverage concerns.
  
• Broadening of pipeline applications (e.g., immunology, autoimmune, dermatology) and the prospect of international partnerships or strategic out-licensing align with the global expansion of healthcare access, providing opportunities for diversified and growing revenue streams in coming years.

Nektar Therapeutics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Nektar Therapeutics's revenue will decrease by 18.3% annually over the next 3 years.
• Analysts are not forecasting that Nektar Therapeutics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Nektar Therapeutics's profit margin will increase from -163.2% to the average US Pharmaceuticals industry of 23.2% in 3 years.
• If Nektar Therapeutics's profit margin were to converge on the industry average, you could expect earnings to reach $9.5 million (and earnings per share of $0.41) by about September 2028, up from $-122.3 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 283.4x on those 2028 earnings, up from -4.4x today. This future PE is greater than the current PE for the US Pharmaceuticals industry at 19.5x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Nektar Therapeutics Future Earnings Per Share Growth

Risks

• Nektar Therapeutics remains a pre-commercial, loss-making company with no approved products-its net loss was $41.6 million in Q2 2025 and the company projects continued high R&D and G&A expenses through at least 2026, putting medium-term pressure on cash reserves, future earnings, and diluting value for shareholders unless a major partnership, out-licensing, or additional funding is secured.
  
• The long-term business model is highly reliant on REZPEG's clinical and regulatory success; prior pipeline setbacks (e.g., bempegaldesleukin failure) raise concerns about execution risk and the company's ability to consistently deliver differentiated, market-competitive assets, directly impacting long-term revenue, investor confidence, and net margins.
  
• Intense competition and rapid innovation in the immunology and dermatology space-from existing IL-13, OX40, JAK inhibitors, and new modalities like cell and gene therapies-may limit REZPEG's market share or render its technology less differentiated, constraining its potential revenue growth in the face of larger, better-capitalized competitors.
  
• Extended timelines, high costs of late-stage development, and reliance on favorable regulatory outcomes (notwithstanding Fast Track designation) expose Nektar to risk from increasing regulatory scrutiny, potential delays, and stricter efficacy/safety benchmarks, which could delay commercialization and thus delay or reduce potential revenue and profitability.
  
• Heightened macroeconomic volatility and tightening capital markets environment makes it more challenging for clinical-stage biotech firms like Nektar to secure favorable financing or partnership terms, which risks future cash flow shortages and could force cost-cutting or pipeline downsizing, negatively impacting R&D progress and long-term earnings prospects.

Valuation

• The analysts have a consensus price target of $96.167 for Nektar Therapeutics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $120.0, and the most bearish reporting a price target of just $69.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $40.9 million, earnings will come to $9.5 million, and it would be trading on a PE ratio of 283.4x, assuming you use a discount rate of 6.8%.
• Given the current share price of $28.55, the analyst price target of $96.17 is 70.3% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.