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On Thursday, H.C. Wainwright & Co. reaffirmed its Buy rating and $18.00 price target for Nkarta Inc . (NASDAQ:NKTX), following the company’s announcement of its fourth-quarter and full-year 2024 financial results. Nkarta disclosed a significant restructuring plan that includes a 34% reduction in its workforce, affecting approximately 53 positions. The decision comes as the company shifts its focus from oncology programs, such as the development of NKX101 for relapsed/refractory acute myeloid leukemia and NKX019 for non-Hodgkin lymphoma, to prioritizing autoimmune disease programs.
The reallocation of resources aims to streamline Nkarta’s path toward clinical milestones for its CD19-targeted allogeneic CAR-NK cell therapy, NKX019, with initial data expected in the second half of 2025. InvestingPro data shows the company maintains a strong liquidity position with a current ratio of 12.91, indicating robust short-term financial health despite burning through cash rapidly. The company’s restructuring also extends to its executive team, with the departure of Alyssa Levin, Chief Financial and Business Officer, effective March 31, 2025. Levin will continue to support the company as a consultant, while Nadir Mahmood, Ph.D., the current President, will take over the roles of principal financial officer and principal accounting officer. Additional executive departures include the Chief Legal Officer and Chief Technology Officer.
Nkarta expects the workforce reduction to result in termination-associated costs of approximately $5.5 million to $6.5 million, which will be recognized in the first quarter of 2025. The reduction process is anticipated to be completed by the end of the year. With analyst price targets ranging from $8 to $20, investors seeking deeper insights into Nkarta’s financial health and growth prospects can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US stocks. Despite the restructuring, management maintains that the decision was not influenced by NKX019’s clinical performance but was necessary due to chemistry and manufacturing constraints. The company projects that the cost reductions and savings from the restructuring will extend its cash runway into 2029, although H.C. Wainwright’s model estimates the cash runway reaching into mid-2028, assuming later stage trials for NKX019.
In other recent news, Stifel analysts have adjusted their financial outlook for Nkarta Inc., reducing the price target from $15.00 to $14.00 while maintaining a Buy rating. This revision comes as the company anticipates significant data from phase 1 trials of NKX019, a treatment aimed at lymphoma and autoimmune diseases, expected to influence shares in the latter half of 2025. Concerns about patient enrollment pace and high efficacy and safety standards have impacted Nkarta’s valuation. Nonetheless, NKX019 is noted for its logistical and safety advantages compared to other therapies in the autoimmune sector. The company has harmonized dosing across four ongoing trials to improve result interpretation, including Ntrust-1/2 and two investigator-sponsored trials. Nkarta’s recent restructuring and workforce reduction have extended its cash runway into fiscal year 2029, enhancing strategic flexibility. Stifel’s updated financial model includes a delayed NKX019 approval and launch timeline, now projected for fiscal year 2030, with reduced operating expenses anticipated from fiscal year 2025 onwards.
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