In a research report sent to investors today, Roth Capital analyst Debjit Chattopadhyay maintained a Buy rating on Nektar Therapeutics (NASDAQ:NKTR) with a $21 price target, as the Drug Enforcement Administration (DEA) announced the de-scheduling of Movantik. Movantik will no longer be considered a schedule II controlled substance, thus eliminating the last hurdle for a robust U.S. commercial launch by partner AstraZenaca.
Chattopadhyay said, “We model Movantik peak sales to exceed $1B during 2019, which translates to $200-230M in peak royalty. AZN is likely to commit up to 700 reps in the U.S. targeting PCP’s and pain specialists to drive rapid commercialization, and over the next three years, up to 3K AZN reps could be detailing Movantik.” He continued, “We anticipate $12/day launch price, which represents a 20% premium over non-PAMORA, Amitiza, but at a significant discount to Relistor. We are conservatively modeling an annual 6% price increase.”
The analyst explained his price target saying, “Our $21 price target is based on a risk adjusted NPV analysis of NKTR’s pipeline. Low expectations from the phase 3 readout for NKTR-102, during March-15, is likely to keep a lid on the stock. Note that given its robust pipeline and multiple commercial stage products, NKTR is not dependent on NKTR-102 success.”
Nektar Therapeutics, a clinical-stage biopharmaceutical company, develops drug candidates that utilize its PEGylation and polymer conjugate technology platforms in the United States.