Shares of Nektar Therapeutics sank on Thursday despite promising long-term trial data for its experimental treatment for alopecia areata, a chronic autoimmune disease that causes hair loss.

Nektar stock dropped 19% to $49.15, on pace for its largest percentage decrease since Feb. 24, 2023, according to Dow Jones Market Data. Shares are up 17% this year.

In a treatment extension of a Phase 2b study of Nektar's treatment, rezpegaldesleukin, the company said 29% of patients receiving the low dose and 31% receiving the high dose achieved hair covering at least 80% of their scalps after a year of treatment. About 75% of those patients maintained that hair coverage four months after stopping treatment, and 63% maintained it after six months.

The proportion of patients with 90% scalp coverage increased to 19% six months after treatment ended, up from 7% at the end of the yearlong treatment period, Nektar said. Those results suggest patients could maintain the drug's benefits with less-frequent dosing.

The findings could also bode well for a competing alopecia treatment, H.C. Wainwright analysts wrote Thursday.

Analysts called Nektar's data a "positive read-through" for Q32 Bio's bempikibart and said the findings were "encouraging" for the competing treatment. Bempikibart has similarly shown that patients can maintain hair growth after ending treatment, though it has been studied over shorter off-treatment periods.

Shares of Q32 Bio fell 3.8% to $7.95.

"While the results do not establish that bempikibart responses will remain durable for the same period, they are encouraging for the durability observed to date [in trials], and we look forward to seeing longer-term off-treatment follow-up with bempikibart," analysts said.

Nektar published Phase 2b trial data for rezpegaldesleukin in April, reporting that nearly 40% of patients who received the treatment showed a 50% or better improvement in their severity of alopecia score, compared with 13.6% of placebo patients.

Dr. David Rosmarin, chair of the Department of Dermatology at the Indiana University School of Medicine, said at the time the results showed rezpegaldesleukin's potential to "deliver truly meaningful clinical outcomes for patients with severe-to-very-severe alopecia areata."