Nkarta (NKTX), a biopharmaceutical company dedicated to the development of engineered natural killer (NK) cell therapies for cancer and autoimmune diseases, is making solid progress with its flagship therapy, NKX019, a clinical-stage treatment for refractory lupus nephritis, non-Hodgkin lymphoma, and various autoimmune disorders. The stock is up over 147% in the past year, and its promising treatment candidate positions Nkarta as an intriguing, high-risk, high-reward pick for investors interested in clinical-stage biopharma opportunities.
Nkarta’s Promising Treatment Candidate
Nkarta is a clinical-stage biopharmaceutical company focused on developing and commercializing allogeneic, off-the-shelf engineered natural killer (NK) cell therapies for life-threatening cancers and autoimmune diseases. One of its leading therapies is NKX019, a cell therapy that uses NK cells derived from the peripheral blood of healthy adults and is engineered with a humanized CD19-directed CAR for enhanced cell targeting. This therapy has potential for patients with B-cell-mediated diseases.
Regarding autoimmune diseases, NKX019 is currently in Phase 1 of a multi-center, dose-escalation clinical trial. This trial aims to assess the therapy’s safety and clinical activity in patients with refractory lupus nephritis (LN). The anticipated total addressable market for LN is 7 million patients in the U.S.
A Phase 1 study of NKX019 for non-Hodgkin lymphoma (NHL) has achieved more promising results. The NHL market is valued at $9.5 billion and is estimated to grow at a 7.4% CAGR from 2024 to 2032.
Finally, the company has announced that researchers at Columbia University Irving Medical Center (CUIMC) have initiated an investigator-sponsored trial (IST) of its CD19-directed chimeric antigen receptor (CAR) NK-cell therapy, NKX019. The trial will involve up to 6 patients with systemic lupus erythematosus (SLE) and aim to evaluate safety and potential clinical outcomes.
Nkarta’s Recent Financial Results & Outlook
Nkarta has released its first-quarter results for 2024. Notably, no revenue was reported for this period. The company reported research and development (R&D) expenses of $25.2 million, including a non-cash stock-based compensation expense of $2.2 million. General and administrative (G&A) expenses were lower, at $7.5 million. The quarter concluded with a net loss of $29.5 million, which showed better-than-expected earnings per share (EPS) of -$0.58, surpassing the analysts’ estimate of -$0.60.
By the end of the first quarter, Nkarta’s cash, cash equivalents, restricted cash, and investments in marketable securities amounted to a significant $450.0 million. Under the current operating plan, the company forecasts that its existing cash and cash equivalents will adequately fund its operations until late 2027.
What Is the Price Target for NKTX Stock?
The stock has been on a volatile downward trend for the past few years until turning a positive direction at the end of last year. It trades at the lower end of its 52-week price range of $1.28 – $16.24 and shows negative price momentum, trading below the 20-day (6.45) and 50-day (6.57) moving averages.
Analysts covering the company have been bullish on the stock. For example, H.C. Wainwright analyst Emily Bodnar recently reiterated a Buy rating on the shares while keeping the price target at $23.00. She noted the potential of NKX019 and its implications in treating SLE, which indicates an expansion of therapeutic application without additional capital expenditure for Nkarta.
Lastly, five analysts recently issued recommendations and price targets, resulting in a Strong Buy rating for Nkarta. The average price target for NKTX stock is $17.25, representing a potential 249.90% upside from current levels.
Final Thoughts on NKTX
Nkarta continues to exhibit positive strides with its novel treatment, NKX019. Despite reporting no revenue in Q1 2024, Nkarta’s reduced net loss and amassed cash reserves solidify its financial stance and overall longevity until late 2027. With solid upside potential, Nkarta has emerged as a compelling venture for investors eyeing innovative healthcare solutions with substantial growth prospects.
