Full Press Release Details
Nektar Therapeutics Reports Financial Results
for the First Quarter of 2019
SAN FRANCISCO, May 8, 2019 - Nektar Therapeutics (Nasdaq:
NKTR) today reported its financial results for the first quarter ended March 31, 2019.
Cash and investments in marketable securities at March 31, 2019
were approximately $1.8 billion as compared to $1.9 billion at December 31, 2018.
continues to advance our immuno-oncology and immunology pipeline with clinical trials initiating for multiple drug candidates across
multiple indications," said Howard W. Robin, President and CEO of Nektar.
"We are working with our partner, Bristol-Myers Squibb, to execute on our broad joint development program for bempegaldesleukin
in combination with nivolumab, with registrational trials in melanoma, RCC, urothelial and non-small cell lung cancer underway
and additional trials planned to begin in the coming months."
"NKTR-181 is under review with the FDA and we are planning for a potential launch later this year," continued Robin. "With respect to NKTR-358, we will report the first data for this exciting drug candidate in an oral presentation at the EULAR Congress in June and our multiple-ascending dose trial in lupus patients is continuing. With our partner Lilly, we continue to advance development of NKTR-358 with two new Phase 1b studies in additional auto-immune disorders planned to start in 2019. We are also completing our IND-enabling activities for our next immuno-oncology candidate, NKTR-255, which activates the IL-15 pathway."
Revenue in the first quarter of 2019 was $28.2 million as compared
to $38.0 million in the first quarter of 2018. Revenue in the first quarter of 2019 was lower primarily due to the recognition
of $10.0 million received in the first quarter of 2018 from Takeda for the approval of Adynovi in Europe.
Total operating costs and expenses in the first quarter of 2019
were $148.9 million as compared to $124.8 million in the first quarter of 2018. Total operating costs and expenses increased primarily
as a result of increased research and development (R&D) expense.
R&D expense in the first quarter of 2019 was $118.5 million
as compared to $99.4 million for the first quarter of 2018. R&D expense was higher in the first quarter of 2019 as compared
to the same period in 2018 primarily because of expenses for our pipeline programs, including the continued development of bempegaldesleukin
in Phase 2 and registrational studies and related manufacturing costs, costs related to Phase 1 clinical studies of NKTR-358 and
IND-enabling activities for NKTR-255.
General and administrative expense was $25.0 million in the first
quarter of 2019 as compared to $18.7 million in the first quarter of 2018 and increased primarily due to costs related to commercialization
readiness activities for NKTR-181 and increased non-cash stock-based compensation.
In the first quarter of 2019, net loss was $118.5 million, or $0.68
loss per share as compared to net loss of $95.8 million, or $0.60 loss per share in the first quarter of 2018.
The company also announced upcoming presentations at the following
scientific congresses during the second quarter of 2019:
4th Drug Discovery Nexus, Boston, MA:
4th Annual Advances in Immuno-Oncology Congress 2019,
American Society for Clinical Oncology (ASCO) 2019 Annual Meeting,
Pharmaceutical & Bioscience Society Symposium: Advances in
Immuno-Oncology, Foster City, CA:
24th Congress of European Hematology Association (EHA), Amsterdam,
Annual European Congress of Rheumatology (EULAR) 2019, Madrid,
Conference Call to Discuss First Quarter 2019 Financial Results
Nektar management will host a conference call to review the results
beginning at 5:00 p.m. Eastern Daylight Time/2:00 p.m. Pacific Daylight Time, Wednesday, May 8, 2019.
This press release and a live audio-only Webcast of the conference
call can be accessed through a link that is posted on the home page and Investors section of the Nektar website: https://ir.nektar.com/.
The web broadcast of the conference call will be available for replay through Monday, June 10, 2019.
To access the conference call, follow these instructions:
Dial: (877) 881-2183 (U.S.); (970) 315-0453
Passcode: 8249707 (Nektar Therapeutics is the
In the event that any non-GAAP financial measure is discussed on
the conference call that is not described in the press release, or explained on the conference call, related information will be
made available on the Investors page at the Nektar website as soon as practical after the conclusion of the conference call.
Nektar Therapeutics is a research-based, development stage biopharmaceutical
company whose mission is to discover and develop innovative medicines to address the unmet medical needs of patients. Our R&D
pipeline of new investigational medicines includes treatments for cancer, autoimmune disease and chronic pain. We leverage our
proprietary and proven chemistry platform in the discovery and design of our new therapeutic candidates. Nektar is headquartered
in San Francisco, California, with additional operations in Huntsville, Alabama and Hyderabad, India. Further information about
Nektar and its drug development programs and capabilities may be found online at www.nektar.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains uncertain or forward-looking statements
which can be identified by words such as: "advance," "planned," "preparing," "potential,"
"continue," "may," "will" and similar references to future periods. Examples of forward-looking statements
include, among others, statements we make regarding the potential therapeutic benefits of and future development plans for our
investigational products [including bempegaldesleukin ("bempeg"), NKTR-181, NKTR-358, NKTR-262 and NKTR-255], the timing
of a potential launch for NKTR-181, and the results of clinical trials. Forward-looking statements are neither historical facts
nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions and are
subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside
of our control. Our actual results may differ materially from those indicated in the forward-looking statements and you should
not rely on such statements. Important factors that could cause our actual results to differ materially from those indicated in
the forward-looking statements include: (i) the timing of the commencement or end of clinical studies and the availability of clinical
data may be delayed or unsuccessful due to regulatory delays, slower than anticipated patient enrollment, manufacturing challenges,
changing standards of care, evolving regulatory requirements, clinical trial design, clinical outcomes, and enrollment competition;
(ii) the timing and probability of regulatory approval, if any, for NKTR-181 is uncertain and difficult to predict; (iii) scientific
discovery of new medical breakthroughs is an inherently uncertain process and the future success of applying our technology platform
to drug candidates [such as bempegaldesleukin ("bempeg"), NKTR-262, NKTR-358, and NKTR-255] is therefore highly uncertain
and unpredictable and one or more of these programs may fail; (iv) patents may not issue from our patent applications for our drug
candidates, patents that have issued may not be enforceable, or additional intellectual property licenses from third parties may
be required; and (v) certain other important risks and uncertainties set forth in Nektar's Annual Report on Form 10-K for the year
ended December 31, 2018 filed with the Securities and Exchange Commission on March 1, 2019. Any forward-looking statement made
by us in this press release is based only on information currently available to us and speaks only as of the date on which it is
made. We undertake no obligation to update any forward-looking statement.
Adynovi is a registered trademark of Baxalta Incorporated.
Jennifer Ruddock of Nektar Therapeutics
Jodi Sievers of Nektar Therapeutics
| NEKTAR THERAPEUTICS | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| ASSETS | March 31, 2019 | December 31, 2018 (1) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 106,752 | $ | 194,905 | ||||
| Short-term investments | 1,281,913 | 1,140,445 | ||||||
| Accounts receivable | 42,894 | 43,213 | ||||||
| Inventory | 11,778 | 11,381 | ||||||
| Advance payments to contract manufacturers | 27,425 | 26,450 | ||||||
| Other current assets | 19,352 | 21,293 | ||||||
| Total current assets | 1,490,114 | 1,437,687 | ||||||
| Long-term investments | 455,867 | 582,889 | ||||||
| Property, plant and equipment, net | 58,158 | 48,851 | ||||||
| Operating lease right-of-use assets | 83,475 | - | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 2,367 | 4,244 | ||||||
| Total assets | $ | 2,166,482 | $ | 2,150,172 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 11,012 | $ | 5,854 | ||||
| Accrued compensation | 18,371 | 9,937 | ||||||
| Accrued contract manufacturing expenses | 21,384 | 23,841 | ||||||
| Accrued clinical trial expenses | 17,496 | 14,700 | ||||||
| Other accrued expenses | 14,624 | 9,580 | ||||||
| Interest payable | 4,090 | 4,198 | ||||||
| Operating lease liabilities, current portion | 1,649 | - | ||||||
| Deferred revenue, current portion | 11,092 | 13,892 | ||||||
| Total current liabilities | 99,718 | 82,002 | ||||||
| Senior secured notes, net | 247,386 | 246,950 | ||||||
| Operating lease liabilities, less current portion | 95,024 | - | ||||||
| Liability related to the sale of future royalties, net | 80,837 | 82,911 | ||||||
| Deferred revenue, less current portion | 9,340 | 10,744 | ||||||
| Other long-term liabilities | 666 | 9,990 | ||||||
| Total liabilities | 532,971 | 432,597 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 17 | 17 | ||||||
| Capital in excess of par value | 3,178,773 | 3,147,925 | ||||||
| Accumulated other comprehensive loss | (2,716 | ) | (6,316 | ) | ||||
| Accumulated deficit | (1,542,563 | ) | (1,424,051 | ) | ||||
| Total stockholders' equity | 1,633,511 | 1,717,575 | ||||||
| Total liabilities and stockholders' equity | $ | 2,166,482 | $ | 2,150,172 |
(1) The consolidated balance sheet at December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles in the United States for complete financial statements.
| NEKTAR THERAPEUTICS | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except per share information) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenue: | ||||||||
| Product sales | $ | 4,398 | $ | 6,295 | ||||
| Royalty revenue | 11,390 | 11,076 | ||||||
| Non-cash royalty revenue related to sale of future royalties | 8,230 | 6,920 | ||||||
| License, collaboration and other revenue | 4,204 | 13,727 | ||||||
| Total revenue | 28,222 | 38,018 | ||||||
| Operating costs and expenses: | ||||||||
| Cost of goods sold | 5,440 | 6,646 | ||||||
| Research and development | 118,463 | 99,424 | ||||||
| General and administrative | 25,006 | 18,687 | ||||||
| Total operating costs and expenses | 148,909 | 124,757 | ||||||
| Loss from operations | (120,687 | ) | (86,739 | ) | ||||
| Non-operating income (expense): | ||||||||
| Interest expense | (5,226 | ) | (5,340 | ) | ||||
| Non-cash interest expense on liability related to sale of future royalties | (6,065 | ) | (5,019 | ) | ||||
| Interest income and other income (expense), net | 12,483 | 1,571 | ||||||
| Total non-operating income (expense), net | 1,192 | (8,788 | ) | |||||
| Loss before provision for income taxes | (119,495 | ) | (95,527 | ) | ||||
| Provision (benefit) for income taxes | (983 | ) | 265 | |||||
| Net loss | $ | (118,512 | ) | $ | (95,792 | ) | ||
| Basic and diluted net loss per share | $ | (0.68 | ) | $ | (0.60 | ) | ||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 173,859 | 160,884 |
| NEKTAR THERAPEUTICS | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (118,512 | ) | $ | (95,792 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash royalty revenue related to sale of future royalties | (8,230 | ) | (6,920 | ) | ||||
| Non-cash interest expense on liability related to sale of future royalties | 6,065 | 5,019 | ||||||
| Stock-based compensation | 25,385 | 19,949 | ||||||
| Depreciation and amortization | 3,077 | 2,541 | ||||||
| Accretion of discounts, net and other non-cash transactions | (4,303 | ) | (370 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 319 | 151 | ||||||
| Inventory | (397 | ) | 51 | |||||
| Other assets | 4,209 | 1,853 | ||||||
| Accounts payable | 5,156 | 6,492 | ||||||
| Accrued compensation | 8,434 | 6,867 | ||||||
| Other accrued expenses | 774 | 10,826 | ||||||
| Deferred revenue | (4,204 | ) | (3,678 | ) | ||||
| Other liabilities | 1,332 | 545 | ||||||
| Net cash used in operating activities | (80,895 | ) | (52,466 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of investments | (368,739 | ) | - | |||||
| Maturities of investments | 362,249 | 37,232 | ||||||
| Sales of investments | - | 11,963 | ||||||
| Purchases of property, plant and equipment | (5,648 | ) | (985 | ) | ||||
| Net cash provided by (used in) investing activities | (12,138 | ) | 48,210 | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from shares issued under equity compensation plans | 4,894 | 34,352 | ||||||
| Net cash provided by financing activities | 4,894 | 34,352 | ||||||
| Effect of exchange rates on cash and cash equivalents | (14 | ) | (53 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (88,153 | ) | 30,043 | |||||
| Cash and cash equivalents at beginning of period | 194,905 | 4,762 | ||||||
| Cash and cash equivalents at end of period | $ | 106,752 | $ | 34,805 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 4,805 | $ | 4,952 |