Cowen has some interesting comments on Nektar Therapeutics (NASDAQ:NKTR) saying that with the shares trading near their 52-week low on still-disappointing Exubera Rx trends and fears of a dramatic cut to Exubera revenue guidance, the bullish tone of last night's Q1 resultscall was a surprise.
The widely anticipated cut to the 2007 Exubera manufacturing revenue guidance did not occur: indeed the target was raised by $26MM following a revenue recognition adjustment in Q1. And new CEO Howard Robin is following through on his promise to streamline Nektar, targeting at least $60MM of expense cuts in 2008 - a 25-30% reduction to the existing cost base.
To reflect the glacial pace of the Exubera rollout and to reset expectations, the firm has sharply cut their Exubera sales projections for 2007-12. However, recent physician checks indicate an improving outlook based on strong patient satisfaction. With Exubera expectations at a low, clinician sentiment beginning to turn, and the DTC advertising catalyst coming in Q3, they believe NKTR shares can recover, and may outperform the market by 30%+ over the next 12 months.
Notablecalls: Wow! The stock is down considerably since my bearish April 5 call. Considering the positive comments from Cowen's Ian Sanderson (who of course has been a NKTR bull through is all), the 30% short interest and the upgrade from Morgan Stanley, I think NKTR will see a nice short squeeze here.
NTKR 1-yr chart: