Nektar Therapeutics (NASDAQ:NKTR) focuses on creating products through the application of advanced drug delivery technologies. The company's three drug delivery platforms: Nektar Advanced PEGylation Technology, Nektar Pulmonary Technology and Nektar Supercritical Fluid Technology are designed to improve the performance of molecules. Nextar Therapeutics has collaborations with over 20 biotechnology and pharmaceutical companies to provide its drug delivery technologies and its partner pipeline includes a number of products. One of the company's potential "blockbuster" drugs is Exubera, an inhaled human insulin powder. Nektar has filed both a new drug application with the United States FDA and a marketing authorization application with the European Medicines Evaluation Agency for Exhubera.
Many of the bullish market sectors are in a slightly "overbought" condition, thus we wanted to find a stock that would be fairly immune to an unexpected retreat in equity values. Most pharmaceutical and healthcare issues fall into that category and this drug development company generally moves higher (or lower) on its own merit. Nektar has a respectable (for its industry group) fundamental outlook, having recently reported a narrowed first-quarter loss of 31 cents a share, compared with 64 cents last year. In addition, the company received another upgrade last week when analysts at W.R. Hambrecht rated the stock a "buy" with a target of $25. Nektar is also enoying accumulation by some popular institutional investors and the technical indications suggest reasonable buying support near the sold (put) strike price. In short, this position offers favorable risk versus reward for traders who wouldn't mind owning a unique company in the drug sector.
Fundamentals Chart Earnings Dates Analyst Ratings
Suggested (Bullish) Option Position:
Sell Put JUN 15.00 QNX-RC
Target Price = $0.40 Open Interest = 126
Potential Profit (5 contracts @ $0.40) = $200
Initial Margin (5 contracts) = $2,590
Return on Investment (max) = 8.7%
Cost Basis in Stock = $14.60
Days to Expiration = 27