Last Update 06 Jan 26

NKTR: Phase 2b Alopecia Data And Fast Track Status Will Drive Upside

Analysts have increased their price target for Nektar Therapeutics to $121 from $99, citing updated assumptions around Rezpeg, including new Alopecia Areata Phase 2b expectations, a clean safety profile, durability potential, and added value for future sales. They also highlighted the ongoing impact of Rezpeg related clinical data on how investors frame the separate Lilly litigation.

Analyst Commentary

Street research around Nektar is centering on Rezpeg's clinical profile, its potential role in Alopecia Areata, and how upcoming data could influence both valuation and the separate Lilly litigation narrative.

Bullish Takeaways

Bullish analysts see Rezpeg's novel mechanism of action, clean safety profile, and durability potential as key drivers that could support higher long term revenue assumptions if clinical data stay supportive.
The addition of Alopecia Areata into some models, with explicit success probabilities and about US$300m in estimated peak sales, is feeding into higher price targets and a more constructive view on the pipeline's commercial opportunity.
Relatively low expectations going into the Rezpeg Phase 2b Alopecia Areata topline readout are viewed as creating room for upside if results are solid. Bullish analysts see this as favorable for risk or reward.
Some analysts expect that continued Phase 2 data generation around Rezpeg could help narrow the wide range of investor views on the Lilly litigation outcome. This could potentially reduce one source of uncertainty in how the stock is valued.

Bearish Takeaways

The use of 20% odds of success for Alopecia Areata in certain models highlights that Rezpeg still faces meaningful clinical and execution risk before any potential revenue materializes.
Price targets that reference specific peak sales figures for Rezpeg rely on assumptions that may change as more data come in. This can introduce volatility for investors focused on long term growth scenarios.
The delay of the pre trial hearing in the Lilly litigation keeps legal outcomes unresolved for longer. Even if clinical data help frame expectations, the ultimate financial impact of the case remains unclear.
With the catalyst path now more concentrated on Rezpeg Phase 2 data, the story is heavily tied to a single asset. This can be a concern for investors who prefer more diversified drivers of future performance.

What's in the News

M&A focused blog Betaville issued an alert to subscribers about a rumor involving Nektar, and contacts reported that Nektar shares were trading at US$61.34, up US$6.38, in Friday afternoon trading (Periodical)
Nektar announced topline 36 week induction results from the Phase 2b REZOLVE-AA trial of rezpegaldesleukin in 92 patients with severe to very severe alopecia areata. Both dose arms more than doubled the SALT score reduction treatment effect seen with placebo but narrowly missed statistical significance on the primary endpoint in the full mITT set (Key Developments)
When four patients with major eligibility violations were excluded from the REZOLVE-AA analysis, both rezpegaldesleukin dose arms met statistical significance on the primary endpoint, while absolute treatment effects for the active arms were similar with or without those exclusions (Key Developments)
The FDA granted Fast Track designation for rezpegaldesleukin in atopic dermatitis in February 2025 and for severe alopecia areata in July 2025. New REZOLVE-AD Phase 2b data were selected for a late breaking oral presentation at the American College of Allergy, Asthma & Immunology 2025 Annual Scientific Meeting in Orlando (Key Developments)
Nektar filed a US$110m at-the-market follow-on equity offering and separately completed a US$75.002328m at-the-market follow-on equity offering, issuing common stock at prices in the high US$50s per share with stated per share discounts (Key Developments)

Valuation Changes

Fair Value: Model fair value estimate is unchanged at US$114.43 per share.
Discount Rate: Discount rate has moved fractionally from 6.956% to 6.956%, a change that is effectively negligible.
Revenue Growth: Long term revenue growth assumption has shifted from an 11.28% decline to a 10.83% decline, indicating a slightly less negative outlook in the model.
Net Profit Margin: Assumed net profit margin is essentially flat, moving from 20.88% to 20.87%.
Future P/E: Future P/E multiple has edged down from 368.23x to 362.67x, keeping the modeled earnings multiple at a very large level.

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

About Nektar Therapeutics

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.What are the underlying business or industry changes driving this perspective?

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 Earnings and Revenue Growth

Nektar Therapeutics Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

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

What could happen that would invalidate this narrative?

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

How have all the factors above been brought together to estimate a fair value?

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.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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