Biotech's Hottest Stock Leaves Evercore ISI Alone in `Hold' Call

(Bloomberg) -- It's tough to find a bear on the hottest stock in biotech, Nektar Therapeutics.

The stock is up sevenfold in the past 12 months, the best performance in the Nasdaq Biotechnology Index, even with a slight pullback this week after new drug data sent shares soaring Friday. While all eight analysts covering Nektar agree its experimental cancer therapy has shown promising results, Evercore ISI's Josh Schimmer says the drugmaker has yet to prove that the medicine can work by itself, or show a benefit over Bristol-Myers Squibb Co.'s Opdivo and similar therapies.

“The data looks interesting,” said Schimmer, who has the only hold rating on the stock, in a phone interview. “But given the valuation of the company, it's got to be much more than interesting -- it's got to be highly compelling.”

Adding fuel to the recent stock gains, Bristol-Myers's recent licensing agreement with Nektar hasn't stopped investors from speculating that a full takeover may be in the cards. But Bloomberg Intelligence biotech analyst Asthika Goonewardene still sees that as unlikely, for now.

“As the market cap keeps rising and the potential takeover price keeps rising, the bar to argue a takeover story also rises,” Goonewardene said.

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net.

To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Will Daley, Catherine Larkin

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