Zinger Key Points
- Nkarta posted a Q4 loss of $0.35 per share, beating estimates of a $0.41 loss, and announced a 34% workforce reduction.
- Nkarta holds $380.5M in cash and investments as of Dec. 31, 2024, expected to fund operations into 2029.
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Nkarta, Inc. NKTX reported a fourth-quarter earnings report on Wednesday with a loss of 35 cents per share, beating the consensus of a loss of 41 cents.
The company announced restructuring and a workforce reduction of 34% (53 positions), including the freezing of some future hires, to extend the cash runway by more than one year to enable clinical milestones while having ample cash runway following the realization of those milestones.
Cash payments resulting from the restructuring are estimated to be $5.5 to $6.5 million.
Cash balance of $380.5 million on December 31, 2024, including cash, cash equivalents, and investments, is expected to fund operations into 2029.
Nkarta's development program includes two clinical trials and two investigator-sponsored trials of NKX019 in rheumatic and neurological diseases. Initial data for NKX019 in multiple autoimmune indications is expected in the second half of 2025.
In December, Nkarta opened Ntrust-2 to enrollment and the IND clearance for an investigator-sponsored trial (IST) that will evaluate NKX019 in patients with myasthenia gravis.
Dosing of the first patient in Ntrust-1, a clinical trial of NKX019 for the treatment of lupus nephritis, was reported in November 2024.
Preliminary clinical data from the Ntrust-1 and Ntrust-2 clinical trials is planned for the second half of 2025.
- William Blair maintains the Outperform rating.
- HC Wainwright reiterates Nkarta with a Buy and maintains an $18 price target.
- Needham reaffirms Nkarta's Buy rating with a price target of $11.
- Stifel maintains Nkarta with a Buy, lowering the price target from $15 to $14.
William Blair writes, "While the company's workforce reduction is unfortunate, we view the organization's restructuring as necessary, as it will extend Nkarta's runway into 2029 and will enable the company to achieve key clinical readouts for NKX019 across multiple indications."
Analyst Sami Corwin says, "We continue to believe that NKX019's profile is well suited for autoimmune diseases, given that the company is using a less intense lymphodepletion regimen (no fludarabine) and is allogeneic, which would eliminate the burden of apheresis."
Price Action: NKTX is up 55.8% at $2.14 at the last check Thursday.
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