Why Nektar Therapeutics Skyrocketed 30% Higher in October

What: Shares of Nektar Therapeutics , a small-cap biopharma that develops drug candidates using its PEGylation and polymer conjugate technology, saw its shares skyrocket by more than 30% during the month of October, according to data from S&P Capital IQ.

So what: The company released a slew of information during the month that appears to have left its investors feeling bullish.

First off, Nektar held an analyst day during October where it gave a great overview of its clinical pipeline, which included a review of the progress that it has made with Movantik/Moventig, its opioid-induced constipation medicine that is currently being sold by its partner AstraZeneca . The drug has certainly already provided a huge boost to Nektar's financial position, as since launching earlier this year AstraZeneca has paid out $140 million to Nektar as milestone payments. The honey pot could also continue to get sweeter as Nektar could receive an additional $375 million in milestone payments plus double-digit royalties from AstraZeneca if the drug performs well in the market. Given that 41% of patients who take opioids to control pain experienced constipation as a side effect, which causes roughly one out of every three patients to stop taking their medicine, Nektar and AstraZeneca appear to be staring down a very large market opportunity.

Beyond Movantik/Moventig, the company also provided updates on several other late stage compounds, including NKTR-181 which is being studied as a treatment for chronic pain. While the space is most certainly crowded NKTR-181 is designed to be absorbed more slowly in the body, which could help to reduce drug abuse by patients. This compound certainly holds potential and it has already received Fast Track designation by the FDA.

Lastly, Nektar boosted its cash position during the month by issuing $250 million of notes due in 2020. It used a portion of the proceeds to retire all of its currently outstanding $125 million notes that were due in 2017, which was a smart move as the 2017 notes carried a higher interest rate. The company now believes that it will end the year with more than $305 million in cash in its pocket.

Now what: The future is certainly starting to look bright for Nektar, as its other marketing partner Baxalta broke news earlier this week that their combined hemophilia A therapy, Adynovate, has officially received FDA approval. Adynovate was co-developed by Baxalta and Nektar and it offers hemophilia A patients a convenient twice a week dosing schedule. Baxalta plans to launch Adynovate in the next few weeks.

Nektar really gave its investors a lot to positive news during the month, so given the recent news of the Adynovate approval and bond offering, Nektar is certainly a stronger company than it was only a month ago. While the company is still a bit to risky for my personal investing taste, I must admit there is a lot to like about Nektar, and will certainly be watching the Adynovate launch closely to determine if this name is worthy on an investment.

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