Nektar Therapeutics Reports Financial Results for the Second Quarter of 2016

Nektar Therapeutics Reports Financial

Results for the Second Quarter of 2016

SAN FRANCISCO, Aug. 3, 2016 /PRNewswire/ - Nektar Therapeutics

(Nasdaq: NKTR) today reported its financial results for the second quarter ended June 30, 2016.

Cash and investments in marketable securities at June 30, 2016

were $274.9 million as compared to $308.9 million at December 31, 2015. This balance includes the $28.0 million payment received

from AstraZeneca in April of 2016 for the sublicense of MOVENTIG (naloxegol) to ProStraken in Europe. The balance

does not include the $20 million upfront payment for the licensing of European rights for ONZEALD to Daiichi Sankyo Europe,

which occurred in Q2 2016.

"We continue to execute on the development and business

objectives for Nektar," said Howard W. Robin, President and CEO of Nektar. "Following our licensing agreement with Daiichi

Sankyo Europe, the MAA for ONZEALD was accepted by the EMA in July, and with an accelerated assessment review granted by the CHMP,

we expect a decision on the recommendation for conditional approval in Q1 2017. Our Phase 3 study of NKTR-181 in patients

with chronic low back pain has now completed enrollment and is on track to have topline data in the first quarter of 2017. Finally,

NKTR-214 continues to advance in its Phase 1/2 study in cancer patients at MD Anderson and Yale Cancer Centers, with initial topline

data expected before the end of this year. As the first medicine designed to selectively stimulate the in vivo growth of

endogenous tumor-killing T cells and natural killer cells within the tumor micro-environment, we are extremely excited about the

potential of NKTR-214 to transform the immuno-oncology landscape."

Year-to-date revenue for 2016 was $91.6 million as compared

to $131.5 million in the first half of 2015. Revenue in 2016 included recognition of the $28.0 million cash payment received

from AstraZeneca for the sublicense of MOVENTIG (naloxegol) to ProStrakan (Kyowa Kirin) in Europe. In addition, product

sales, royalty revenue, and non-cash royalty revenue increased in the first half of 2016 compared to the first half of 2015.

Revenue in the first half of 2015 included recognition of $90.0 million of the $100.0 million milestone payment from AstraZeneca

following the first commercial sale of MOVANTIK in the U.S. in Q1 2015. Revenue in the second quarter of 2016 was $32.8

million as compared to $22.7 million in the second quarter of 2015.

Revenue included non-cash royalty revenue, related to our 2012

royalty monetization, of $8.1 million and $14.7 million in the second quarter and first half of 2016, respectively, and $4.7 million

and $8.7 million in the second quarter and first half of 2015, respectively. This non-cash royalty revenue is offset by non-cash

interest expense incurred in connection with the 2012 royalty monetization of $5.0 million and $10.0 million in the second quarter

and first half of 2016, respectively and $5.2 million and $10.2 million in the second quarter and first half of 2015, respectively.

Total operating costs and expenses in the first half of 2016

were $139.5 million as compared to $131.9 million in the first half of 2015. Total operating costs and expenses in the second

quarter of 2016 were $71.1 million as compared to $66.1 million in the second quarter of 2015. Total operating costs and

expenses increased primarily as a result of increased research and development (R&D) expense.

Research and development expense in the second quarter of 2016

was $52.4 million as compared to $45.4 million in the second quarter of 2015. For the first half of 2016, R&D expense

was $101.6 million as compared to $92.4 million in the first half of 2015. R&D expense was higher in the second quarter

and first half of 2016 as compared to the same periods in 2015 primarily due to expenses for the NKTR-181 Phase 3 studies and

the initiation of the Phase 1/2 study of NKTR-214.

General and administrative expense was $11.0 million in the

second quarter of 2016 as compared to $10.2 million in the second quarter of 2015. G&A expense in the first half of

2016 was $21.3 million as compared to $20.5 million in the first half of 2015.

Net loss in the second quarter of 2016 was $48.6 million or

$0.36 loss per share as compared to $52.7 million or $0.40 loss per share in the second quarter of 2015. Net loss in the first

half of 2016 was $68.1 million or $0.50 loss per share as compared to $18.8 million or $0.14 loss per share in the first half

The company also announced the following upcoming presentations

Fourth Annual Immuno-Oncology Summit, Boston, MA:

Oral Abstract: "Of Mice and Men: Translating the Immune

Oncology Mechanism of Action of NKTR-214." Presented by: Jonathan Zavelsky, Ph.D.

o Date: August 31, 2016, 5:15

Second CRI-CIMT-EATI-AACR International Cancer Immunotherapy

Conference, New York, NY:

Abstract/Poster #311: "The CD122-biased immunostimulatory

cytokine NKTR-214 combined with checkpoint blockade leads to mobilization of antitumor immunity and synergistic activity",

Langowski, J., et al.

o Date: September 26, 2016,

5:15 - 7:45 p.m. Eastern Time

ESMO 2016 Congress, Copenhagen, Denmark:

Abstract #3048: "Combining Complementary Mechanisms of

Immune Activation: NKTR-214, a Biased IL-2 Pathway Agonist, and Immune Checkpoint Antagonists", Charych, D., et

o Date: October 9, 2016, 1:00

- 2:00 p.m. Central European Time

10th Annual Pain and Migraine Therapeutics Conference,

Oral Abstract: "Clinical Development of a Novel Opioid

Molecule with Inherent Anti-abuse Properties", Presented by Carlo DiFonzo, Ph.D.

o Date: October 19, 2016, 1:00

- 1:30 p.m. Central Time

Conference Call to Discuss Second Quarter 2016 Financial

Nektar management will host a conference call to review the

results beginning at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time today, Wednesday, August 3, 2016.

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 Investor Relations section of the Nektar website: http://www.nektar.com.

The web broadcast of the conference call will be available for replay through Tuesday, September 6, 2016.

To access the conference call, follow these instructions:

Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)

Passcode:51021513 (Nektar Therapeutics is the host)

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 Investor Relations page at the Nektar website as soon as practical after the conclusion of the conference

Nektar Therapeutics has a robust R&D pipeline and

portfolio of approved partnered medicines in oncology, pain, immunology and other therapeutic areas. In the area of oncology, Nektar is

developing NKTR-214, an immuno-stimulatory CD122-biased agonist, that is in Phase 1/2 clinical development for patients with solid

tumors. ONZEALD (etirinotecan pegol), a long-acting topoisomerase I inhibitor, is being developed for patients with advanced

breast cancer and brain metastases and is partnered with Daiichi Sankyo in Europe. In the area of pain, Nektar has

an exclusive worldwide license agreement with AstraZeneca for MOVANTIK (naloxegol), the first FDA-approved once-daily

oral peripherally-acting mu-opioid receptor antagonist (PAMORA) medication for the treatment of opioid-induced constipation (OIC),

in adult patients with chronic, non-cancer pain. The product is also approved in the European Union as MOVENTIG

(naloxegol) and is indicated for adult patients with OIC who have had an inadequate response to laxatives. The AstraZeneca agreement

also includes NKTR-119, an earlier stage development program that is a co-formulation of MOVANTIK and an opioid. NKTR-181, a wholly

owned mu-opioid analgesic molecule for chronic pain conditions, is in Phase 3 development. In hemophilia, Nektar has

a collaboration agreement with Baxalta for ADYNOVATE [Antihemophilic Factor (Recombinant)], a longer-acting PEGylated Factor

VIII therapeutic approved in the U.S. and Japan for patients over 12 with hemophilia A. In anti-infectives, the

company has two collaborations with Bayer Healthcare, Cipro Inhale in Phase 3 for non-cystic fibrosis bronchiectasis and

Amikacin Inhale in Phase 3 for patients with Gram-negative pneumonia.

Nektar's technology has enabled nine approved products

in the U.S. or Europe through partnerships with leading biopharmaceutical companies, including AstraZeneca's

MOVANTIK , Baxalta's ADYNOVATE , UCB's Cimzia for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS

for hepatitis C and Amgen's Neulasta for neutropenia.

Nektar is headquartered in San Francisco, California,

with additional operations in Huntsville, Alabama and Hyderabad, India. Further information about the company and