Nektar's 1,000% Rally Masks Critical Phase 3 and Financing Hurdles

What happened

Nektar Therapeutics' stock has skyrocketed over 1,000% from its 52-week low, trading around $71, fueled by 36-week maintenance data from the REZOLVE-AD Phase 2b study for rezpegaldesleukin in atopic dermatitis. This data supports a narrative of durable responses with less frequent dosing, but filings reveal it derives from a responder-enriched cohort, limiting direct commercial applicability. Concurrently, the company announced a $300M equity offering to fund Phase 3 trials, which are aligned with FDA endpoints and scheduled to start in Q2 2026. DeepValue's analysis rates NKTR as 'WAIT' due to high dependency on successful Phase 3 initiation and non-dilutive capital, amid cash burn and no committed funding sources. The rally may overprice optimistic outcomes, overlooking risks like manufacturing comparability issues and potential dilution from the capital raise.

Implication

The stock's rally reflects market optimism on durability data, but Phase 3 trials must confirm efficacy in intent-to-treat populations to justify current valuations. Financing terms for the $300M offering will critically impact per-share value, with punitive pricing likely to compress returns further. Manufacturing comparability and supply-chain vulnerabilities could delay trials, exacerbating cash burn and forcing additional raises. Competitive pressures from incumbents like Dupixent set a high efficacy bar, necessitating clear differentiation through dosing convenience. Waiting for clarity on Phase 3 initiation and capital raise completion offers better risk-adjusted returns, as missed milestones could trigger sharp corrections.

Thesis delta

The surge reinforces market focus on durability, but does not alter the core thesis: value accretion remains tethered to Phase 3 start in Q2 2026 and non-dilutive financing. Any slippage in these milestones could erode confidence, making the current price vulnerable to downside if operational or capital risks materialize.