NKTR: "Winning By Being Second"

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It would be perfectly on-brand if we started this post with an all-time classic quote (joke) from THE Ricky Bobby, mainly because it’s very applicable to the opportunity below.

The stock we’re sharing our summarized notes on is Nektar Therapeutics (NKTR), which means this is going to be a biotech post. Unlike many biotech opportunities that are either trying to be a better first-line (1L+) treatment or the only treatment for a specific condition, NKTR’s opportunity lies in being the second-line (2L+) treatment. Not the first.

Contrary to the iconic Ricky Bobby, NKTR can win by being second. Let us explain.

As we’ve mentioned before, we’re not doctors or scientists, and timing early-stage biotechs in P1 or P2 is outside our wheelhouse. However, that doesn’t mean de-risked assets aren't an opportunity for us and like-minded investors seeking new special-situation trades to deploy capital into.

This is what led us to invest in Liquidia (LQDA) back in January 2025, which 3x’d one year and one week after we made our initial report, and more recently, our current investment in Abivax (ABVX) for ulcerative colitis (UC).

Now, we have our sights on NKTR, and as we disclosed in our Q1’26 letter, we hold a long position in the company.

Our notes below are just our version of a summary from the original work by Adam Mays, a practicing dermatologist. Adam has been a great sounding board for us on other healthcare-related names, largely HIMS, and the work he’s done on NKTR is nothing short of incredible. His report is free, but unfortunately, 55-pages long. So, if you’re a slow reader like us, we’d suggest carving out some considerable time over a weekend to get through it all. All of the notes below are mostly based on that report, but we still want to give credit where credit is due.

Despite that, the opportunity could potentially value NKTR in the triple digits, implying an >100% return.

With that, let’s begin.

As a foreword, the notes below are our summarized notes, which means that there is still a lot of nuance in Adam’s original report, but we’ve consolidated it into what helped us understand the opportunity. If something looks like it may be missing, we assure you it is in the original work.

NKTR is currently in phase 3 (P3) for its atopic dermatitis (AtD) drug, Rezpeg, and will be reporting P2 maintenance data for its application for alopecia areata (AA) tomorrow morning (April 20th). More on the latter later on, though.