Brean Murray Initiates Coverage on Nektar Therapeutics (NKTR) with a Buy; Expect Substantial Value Creation Through Partnerships

June 23, 2009 8:28 AM EDT

Brean Murray initiates coverage on Nektar Therapeutics (Nasdaq: NKTR) with a Buy. Price target $10.

Brean analyst says, "The biggest potential value driver at present is the NKTR-118/119 program in opioid induced constipation (OIC), and the primary 2009 investment catalyst is our expectation of a partnership deal, which should bring in a large amount of upfront cash (at least in the high double-digit millions), and a meaningful double-digit royalty, in addition to milestone payments with typical triggers. Given the highly positive Phase 2 results this year, and the developmental blocks and stalls with other oral OIC drug candidates, we believe Nektar is in position for highly favorable deal terms...Our target price is derived using a sum-of-the-parts valuation, primarily by summing up most of the clinical-stage products and two of the nine approved products, the bias being toward products that carry, or are expected to fetch, far higher royalties than the legacy products."

To see more analyst ratings on NKTR Click Here.

Nektar Therapeutics is a biopharmaceutical company developing a pipeline of drug candidates that utilize its PEGylation and advanced polymer conjugate technology platforms, which are designed to improve the benefits of drugs for patients.

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