Nektar Therapeutics (NASDAQ:NKTR) is a biopharmaceutical company that focuses on developing innovative medicines in areas such as oncology, immunology, and pain management. Despite its efforts in these critical fields, Nektar faces challenges in financial performance, particularly in its Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC).
Nektar's ROIC is -63.50%, which is significantly lower than its WACC of 12.97%. This negative ROIC indicates that the company is not generating sufficient returns to cover its cost of capital, a red flag for investors. The ROIC to WACC ratio of -4.90 further highlights this inefficiency, suggesting that Nektar is not utilizing its capital effectively.
In contrast, Exelixis, Inc. (NASDAQ:EXEL) showcases a strong financial position with a ROIC of 23.20% and a WACC of 5.15%. The ROIC to WACC ratio of 4.51 indicates that Exelixis is generating returns well above its cost of capital, reflecting efficient capital utilization and strong profitability. This makes Exelixis an appealing choice for investors seeking growth and efficiency.
Other peers like Alkermes plc (NASDAQ:ALKS) and Neurocrine Biosciences, Inc. (NASDAQ:NBIX) also demonstrate positive ROIC to WACC ratios of 2.97 and 1.74, respectively. These figures suggest that both companies are generating returns above their cost of capital, though not as significantly as Exelixis. This positions them as relatively efficient compared to Nektar.
Sangamo Therapeutics, Inc. (NASDAQ:SGMO), however, shares a similar struggle with Nektar, with a ROIC of -125.56% and a WACC of 8.12%. The ROIC to WACC ratio of -15.47 indicates severe inefficiency, highlighting the challenges faced by companies unable to generate returns above their cost of capital.
