Full Press Release Details
Therapeutics Reports Financial Results for the Second Quarter of 2017
FRANCISCO, Aug. 8, 2017 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for
the second quarter ended June 30, 2017.
and investments in marketable securities at June 30, 2017 were $310.7 million as compared to $389.1 million at December
31, 2016. The cash balance does not include the $150 million upfront payment expected from Nektar's recently announced collaboration
with Eli Lilly & Company for the development and commercialization of NKTR-358.
has successfully achieved a number of important milestones in 2017," said Howard W. Robin, President and CEO of Nektar. "In
July, we announced positive results from the human abuse potential study of NKTR-181, which followed the positive Phase 3 efficacy
data earlier in the year. The body of data for NKTR-181 shows that it could be a transformational pain medicine for the
treatment of chronic pain and be a key building block in the nation's fight against the opioid abuse epidemic. Our new collaboration
with Lilly for NKTR-358 enables the broad development of this first-in-class resolution therapeutic in multiple autoimmune
conditions. Finally, in immuno-oncology, we are pleased to announce that we began dosing patients in the expansion stage of the
PIVOT study of NKTR-214 with Bristol's OPDIVO, which will enroll up to 260 patients in eight target cancer indications."
in the second quarter of 2017 was $34.6 million as compared to $32.8 million in the second quarter of 2016.
Year-to-date revenue for 2017 was $59.3 million as compared to $91.6 million in the first half of 2016. Revenue
in the first half of 2016 was higher primarily because of the recognition of $28.0 million received from AstraZeneca for
the sublicense of MOVENTIG to Kirin in Europe.
operating costs and expenses in the second quarter of 2017 were $85.2 million as compared to $71.1 million in the second quarter
of 2016. Total operating costs and expenses in the first half of 2017 were $164.4 million as compared to $139.5 million in the
first half of 2016. Total operating costs and expenses increased primarily because of research and development (R&D) expense,
which included the completion of Phase 3 clinical studies for NKTR-181.
expense in the second quarter of 2017 was $60.3 million as compared to $52.4 million in the second quarter of 2016. For
the first half of 2017, R&D expense was $121.3 million as compared to $101.6 million in the first half of 2016. R&D
expense was higher in the second quarter and first half of 2017 as compared to the same periods in 2016 and includes increased
expenses for our pipeline programs, including clinical development of NKTR-214 and NKTR-358 and preclinical activities for NKTR-262
and administrative (G&A) expense was $16.0 million in the second quarter of 2017 as compared to $11.0 million in the
second quarter of 2016. Q2 2017 G&A expense includes a $3.3 million charge for a litigation settlement related to a
cross-license agreement. G&A expense in the first half of 2017 was $28.0 million as compared to $21.3 million in
the first half of 2016.
loss in the second quarter of 2017 was $59.9 million or $0.39 loss per share as compared to a net loss of $48.6 million or $0.36
loss per share in the second quarter of 2016. Net loss was higher in Q2 2017 versus Q2 2016 primarily as a result of the
litigation settlement expense and the increased R&D expense described above. Net loss in the first half of 2017 was
$123.7 million or $0.80 loss per share as compared to a net loss of $68.1 million or $0.50 loss per share in the first half of
company also announced the following upcoming presentation:
2017 Congress, Madrid, Spain:
1212TiP: "PIVOT-02: A Phase 1/2, Open-label Multicenter, Dose Escalation and
Dose Expansion Study of NKTR-214 and Nivolumab in Patients with Select Locally Advanced
or Metastatic Solid Tumor Malignancies.", Diab, A., et al.
9, 2017, 13:15 - 14:15 p.m. Central European Summer Time
Call to Discuss Second Quarter 2017 Financial Results
will host a conference call to review the results beginning at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time today, Tuesday,
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: http://www.nektar.com. The web broadcast of the conference call will
be available for replay through Friday, September 8, 2017.
access the conference call, follow these instructions:
(877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 62434800 (Nektar Therapeutics is the host)
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 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, auto-immune disease and chronic pain. We leverage Nektar's
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 the company and its drug
development programs and capabilities may be found online at http://www.nektar.com.
Note Regarding Forward-Looking Statements
This press release contains uncertain or forward-looking
statements which can be identified by words such as: "could," "plan," "expect," "should,"
"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 products (including
NKTR-181, NKTR-358, and NKTR-214), the potential impact of NKTR-181 with respect to the opioid abuse epidemic, and the
anticipated indications for future 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) clinical study outcomes remain very unpredictable and it is possible that a clinical study could fail;
(ii) the regulatory pathway to review and approve pharmaceutical products is subject to substantial uncertainty; (iii) regulations
concerning access to opioid-based pharmaceuticals are strict and there is no guarantee which scheduling category will apply to
NKTR-181 if regulatory approval is achieved; (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 our Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission on May 10, 2017. 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.
Jennifer Ruddock of Nektar Therapeutics
Sievers of Nektar Therapeutics
| NEKTAR THERAPEUTICS |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands) |
| (Unaudited) |
| ASSETS | June 30, 2017 | December 31, 2016 (1) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 16,149 | $ | 59,640 | ||||
| Short-term investments | 249,398 | 329,462 | ||||||
| Accounts receivable, net | 4,114 | 15,678 | ||||||
| Inventory | 11,008 | 11,109 | ||||||
| Other current assets | 7,496 | 10,063 | ||||||
| Total current assets | 288,165 | 425,952 | ||||||
| Long-term investments | 45,160 | - | ||||||
| Property, plant and equipment, net | 64,929 | 65,601 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 1,104 | 817 | ||||||
| Total assets | $ | 475,859 | $ | 568,871 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,241 | $ | 2,816 | ||||
| Accrued compensation | 14,346 | 18,280 | ||||||
| Accrued clinical trial expenses | 6,683 | 7,958 | ||||||
| Other accrued expenses | 6,683 | 4,711 | ||||||
| Interest payable | 4,144 | 4,198 | ||||||
| Capital lease obligations, current portion | 2,706 | 2,908 | ||||||
| Liability related to refundable upfront payment | 12,500 | 12,500 | ||||||
| Deferred revenue, current portion | 13,373 | 14,352 | ||||||
| Other current liabilities | 5,937 | 4,499 | ||||||
| Total current liabilities | 72,613 | 72,222 | ||||||
| Senior secured notes, net | 244,336 | 243,464 | ||||||
| Capital lease obligations, less current portion | 1,056 | 2,223 | ||||||
| Liability related to the sale of future royalties, net | 101,897 | 105,950 | ||||||
| Deferred revenue, less current portion | 48,979 | 51,887 | ||||||
| Other long-term liabilities | 3,592 | 5,000 | ||||||
| Total liabilities | 472,473 | 480,746 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 15 | 15 | ||||||
| Capital in excess of par value | 2,150,019 | 2,111,483 | ||||||
| Accumulated other comprehensive loss | (1,662 | ) | (2,363 | ) | ||||
| Accumulated deficit | (2,144,986 | ) | (2,021,010 | ) | ||||
| Total stockholders' equity | 3,386 | 88,125 | ||||||
| Total liabilities and stockholders' equity | $ | 475,859 | $ | 568,871 |
(1) The consolidated balance sheet at December 31,
2016 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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 15,693 | $ | 12,867 | $ | 20,449 | $ | 26,966 | ||||||||
| Royalty revenue | 7,434 | 3,516 | 14,651 | 7,576 | ||||||||||||
| Non-cash royalty revenue related to sale of future royalties | 6,638 | 8,115 | 13,301 | 14,650 | ||||||||||||
| License, collaboration and other revenue | 4,824 | 8,270 | 10,916 | 42,457 | ||||||||||||
| Total revenue | 34,589 | 32,768 | 59,317 | 91,649 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 8,989 | 7,708 | 15,120 | 16,578 | ||||||||||||
| Research and development | 60,260 | 52,350 | 121,318 | 101,618 | ||||||||||||
| General and administrative | 15,996 | 11,035 | 27,972 | 21,262 | ||||||||||||
| Total operating costs and expenses | 85,245 | 71,093 | 164,410 | 139,458 | ||||||||||||
| Loss from operations | (50,656 | ) | (38,325 | ) | (105,093 | ) | (47,809 | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest expense | (5,510 | ) | (5,627 | ) | (10,912 | ) | (11,304 | ) | ||||||||
| Non-cash interest expense on liability related to sale of future royalties | (4,512 | ) | (4,982 | ) | (9,064 | ) | (10,027 | ) | ||||||||
| Interest income and other income (expense), net | 906 | 458 | 1,564 | 1,333 | ||||||||||||
| Total non-operating expense, net | (9,116 | ) | (10,151 | ) | (18,412 | ) | (19,998 | ) | ||||||||
| Loss before provision for income taxes | (59,772 | ) | (48,476 | ) | (123,505 | ) | (67,807 | ) | ||||||||
| Provision for income taxes | 99 | 127 | 232 | 294 | ||||||||||||
| Net loss | $ | (59,871 | ) | $ | (48,603 | ) | $ | (123,737 | ) | $ | (68,101 | ) | ||||
| Basic and diluted net loss per share | $ | (0.39 | ) | $ | (0.36 | ) | $ | (0.80 | ) | $ | (0.50 | ) | ||||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 155,352 | 136,350 | 154,514 | 136,072 |
| NEKTAR THERAPEUTICS | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (123,737 | ) | $ | (68,101 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash royalty revenue related to sale of future royalties | (13,301 | ) | (14,650 | ) | ||||
| Non-cash interest expense on liability related to sale of future royalties | 9,064 | 10,027 | ||||||
| Stock-based compensation | 16,283 | 12,627 | ||||||
| Depreciation and amortization | 8,287 | 7,634 | ||||||
| Other non-cash transactions | (1,089 | ) | (1,260 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | 11,564 | (7,830 | ) | |||||
| Inventory | 101 | 1,084 | ||||||
| Other assets | 2,280 | 4,637 | ||||||
| Accounts payable | 3,221 | 17 | ||||||
| Accrued compensation | (3,934 | ) | 6,465 | |||||
| Accrued clinical trial expenses | (1,275 | ) | 5,250 | |||||
| Other accrued expenses | 2,388 | 2,831 | ||||||
| Interest payable | (54 | ) | (54 | ) | ||||
| Liability related to refundable upfront payment | - | 12,500 | ||||||
| Deferred revenue | (3,887 | ) | (7,704 | ) | ||||
| Other liabilities | 1,000 | (725 | ) | |||||
| Net cash used in operating activities | (93,089 | ) | (37,252 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of investments | (121,135 | ) | (72,806 | ) | ||||
| Maturities of investments | 147,558 | 107,363 | ||||||
| Sales of investments | 8,823 | - | ||||||
| Purchases of property, plant and equipment | (6,344 | ) | (3,234 | ) | ||||
| Net cash provided by investing activities | 28,902 | 31,323 | ||||||
| Cash flows from financing activities: | ||||||||
| Payment of capital lease obligations | (1,369 | ) | (3,517 | ) | ||||
| Proceeds from shares issued under equity compensation plans | 22,016 | 9,643 | ||||||
| Net cash provided by financing activities | 20,647 | 6,126 | ||||||
| Effect of exchange rates on cash and cash equivalents | 49 | (91 | ) | |||||
| Net (decrease) increase in cash and cash equivalents | (43,491 | ) | 106 | |||||
| Cash and cash equivalents at beginning of period | 59,640 | 55,570 | ||||||
| Cash and cash equivalents at end of period | $ | 16,149 | $ | 55,676 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 10,010 | $ | 10,448 |