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On Thursday, Stifel analysts adjusted their outlook on Nkarta Inc . (NASDAQ:NKTX), reducing the price target to $14.00 from the previous $15.00, while continuing to endorse the stock with a Buy rating. The stock, currently trading at $1.37, has experienced significant pressure, falling nearly 88% over the past year and trading near its 52-week low of $1.31. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics, with 14 additional real-time insights available to subscribers. The firm’s analysts pointed to the anticipated release of preliminary proof of concept data from Phase 1 trials of NKX019 as the next significant event to potentially influence the company’s share value. These trials, part of the Ntrust-1 study, are evaluating NKX019’s efficacy in treating patients with lymphoma (LN), systemic sclerosis (SSc), myositis, and ANCA-associated vasculitis (AAV).
The analysts acknowledged the challenges faced by Nkarta and its peers in the early-stage cell therapy sector, particularly regarding patient enrollment rates and the perceived high bars for efficacy and safety. Despite these challenges, they believe Nkarta stands apart due to the logistical and safety benefits of its NKX019 therapy, which shares similarities with standard treatments commonly prescribed by rheumatologists and immunologists. InvestingPro data shows the company maintains strong liquidity with a current ratio of 12.91 and holds more cash than debt on its balance sheet, though it’s currently burning through cash rapidly.
Stifel highlighted the company’s strategic moves, including the harmonization of NKX019 dosing across all four ongoing trials (Ntrust-1/2 and two Investigator-Sponsored Trials), which they anticipate will enhance the comparability of results between studies. Additionally, they noted Nkarta’s recent restructuring and workforce reduction as positive steps that extend the company’s cash runway into fiscal year 2029, providing the firm with strategic flexibility.
The updated model from Stifel incorporates extended timelines for NKX019’s approval and market launch, now expected in fiscal year 2030. The analysts have mostly offset these delays with projected reductions in operating expenses from fiscal year 2025 onwards. The forthcoming data from the Ntrust-1 trials, expected in the second half of 2025, remains a key milestone for Nkarta and its investors. With analyst targets ranging from $8 to $20 and an overall consensus recommendation of 1.25 (Strong Buy), detailed analysis and comprehensive insights are available in the Pro Research Report on InvestingPro, part of its coverage of over 1,400 US equities.
In other recent news, Nkarta Inc. announced its fourth-quarter and full-year 2024 financial results, alongside a significant restructuring plan. This restructuring involves a 34% workforce reduction, impacting approximately 53 positions, and a shift in focus from oncology to autoimmune disease programs. The company aims to streamline its path toward clinical milestones for its CD19-targeted allogeneic CAR-NK cell therapy, NKX019, with data expected in the second half of 2025. The restructuring also includes changes in the executive team, with Alyssa Levin, Chief Financial and Business Officer, stepping down at the end of March 2025.
Analyst firm H.C. Wainwright reaffirmed its Buy rating for Nkarta, maintaining an $18 price target. Meanwhile, Stifel adjusted its price target for Nkarta to $14 from $15, while also maintaining a Buy rating. Stifel’s revision is based on upcoming data from phase 1 trials, which are anticipated to be crucial for the company in late 2025. Nkarta’s restructuring is seen as a strategy to extend its cash runway into 2029, although H.C. Wainwright estimates it could last until mid-2028. The company is noted for the logistical and safety advantages of its NKX019 therapy, which are aligned with treatments used by rheumatologists and immunologists.
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