Anybody still think that conferences, especially biotech conferences, don’t move stock prices?
Shares of Nektar Therapeutics (NKTR) are up 7.65% today to $61.79 as of noon New York time on the company’s appearance at this week’s J.P. Morgan biotech conference. The slides from the company’s presentation today are in circulation but CEO Howard Robin doesn’t actually present until 2 p.m. New York time today.
A conference like this, though, is a hook that business reporters online and on cable use to corral interviews. Today even before the market opened Howard Robin was on screen with Fox Business’ Marie Bartiromo on her Mornings with Marie show. Bartiromo gave Robin plenty of time to plug, first, Nektar’s new non-addictive opioid. It will be “the first new opioid in over 50 years,” Robin told her after a setup on the extent in lives and dollars of the opioid crisis.
She then moved along to Nektar’s cancer franchise and the company’s new cancer drugs. Robin got to pitch its leading drug and the results from clinical trials as not just a great drug that in combination with other drugs makes cancer therapies hugely more effective (which was Bartiromo’s initial positioning for the drug), but as “the center piece of immuno-oncology.”
I’m only surprised that the gain so far today is just 8%.
Shares of Nektar are a member of my Jubak Picks Portfolio. They’re up 66.79% since I added them to this portfolio on November 13, 2017. My target price is $75 a share.
The May 18 2018 call options at a strike price of $26 are a member of my Volatility Portfolio. They are up 629% since I added them to this portfolio on November 1, 2017. (My Volatility Portfolio runs exclusively on my subscription sites JugglingWithKnives.com ($79 a year) and JubakAm.com. Normally JubakAm.com costs $199 a year but right now I’ve got I’m offering a special $159 price with a two-week free trial to folks who register for my Webinar on at Wealth365.com. Here’s the URL for that offer: http://jubakam.com/jubakam-wealth365-summit-offer/ )
Nektar doesn’t report fourth quarter earnings until February 28. Wall Street is expecting the company to show a loss of 34 cents a share.
I’d keep that date in mind when thinking about whether it might be time to take some profits in Nektar shares or more especially options. Oddly enough, even though earnings are not important for a biotech at this stage of development, the market does tend to sell off a bit–5% or so–if a young biotech reports a bigger than expected loss. That’s often the case when things are going well with a company’s drug development program and the company has been spending more than earlier expected on trials and the preparation of new drug applications to the U.S. Food and Drug Administration. At the same time, demand for options (and therefore option prices) tends to rise as we get close to the earnings date as some traders look to position themselves for a big jump in the stock on unexpected god news.
To my mind that suggests holding these Nectar options into February to ride the current momentum in the stock and then looking at the possibility of selling these deeply in the money calls and buying–after earnings–some longer dated and sightly out of the money calls such as the August 17, 2018 call with a strike price at $70 that recently traded at $7.70 instead of the $17.50 May 18 calls with a strike price at $36.
Full disclosure: I own Nektar May 18 calls at both $36 and $60 strike prices in my personal portfolios. I also own Nektar shares.