Full Press Release Details
Nektar Therapeutics Reports
Financial Results for the Second Quarter of 2018
SAN FRANCISCO, Aug 8, 2018/PRNewswire/ - Nektar
Therapeutics (Nasdaq: NKTR) today reported its financial results for the second quarter
ended June 30, 2018.
Cash and investments
in marketable securities at June 30, 2018 were $2.1 billion as compared to $353.2 million at December
31, 2017. This includes the $1.0 billion upfront payment and $850.0 million share purchase proceeds received on April 3, 2018,
as a result of our Bristol-Myers Squibb collaboration for the global development and commercialization of NKTR-214.
"Over the past few months, we have reported
significant progress across all areas of our pipeline, with notable milestones for our immuno-oncology, immunology and pain programs,"
said Howard W. Robin, President and CEO of Nektar. "Together with Bristol-Myers Squibb, we plan to initiate 20 registrational
studies in nine tumor settings under our joint development plan with the first wave of studies in melanoma, renal cell carcinoma,
and urothelial cancers starting this year. We initiated our first study of NKTR-358 in patients with lupus with our partner
Eli Lilly. And importantly, we recently achieved a significant milestone for our pain program, with the FDA's acceptance
of the NDA filing for NKTR-181, a first-in-class opioid analgesic."
second quarter of 2018 was $1.088 billion as compared to $34.6 million in
the second quarter of 2017. Year-to-date revenue for 2018 was $1.126 billion as
compared to $59.3 million in the first half of 2017. Revenue was higher in the second quarter and first half of 2018 as
compared to the same periods in 2017 primarily because of the recognition of $1.06 billion
of license revenue from the Bristol-Myers Squibb collaboration agreement.
costs and expenses in the second quarter of 2018 were $114.1 million as
compared to $85.2 million in the second quarter of 2017. Total operating costs
and expenses in the first half of 2018 were $238.9 million as compared to $164.4
million in the first half of 2017. Total operating costs and expenses increased primarily
as a result of increased research and development (R&D) expense.
R&D expense in the second
quarter of 2018 was $88.3 million as compared to $60.3 million in the second quarter of 2017. For the first
half of 2018, R&D expense was $187.8 million as compared to $121.3 million in the first half of 2017. R&D
expense was higher in the second quarter and first half of 2018 as compared to the same periods in 2017 primarily because of expenses
for our pipeline programs, including the continued development of NKTR-214 in Phase 1/2 studies and Phase 3 preparatory activities,
costs related to the NKTR-181 New Drug Application and NKTR-181 pre-commercial manufacturing, Phase 1 clinical studies of NKTR-358,
initiation of the Phase 1 study of NKTR-262 in combination with NKTR-214 and IND-enabling activities for NKTR-255.
and administrative (G&A) expense was $20.3 million in the second
quarter of 2018 as compared to $16.0 million in the second
quarter of 2017. G&A expense in the first half of 2018 was $38.9 million as
compared to $28.0 million in the first half of 2017. G&A expense
was higher in the second quarter and first half of 2018 as compared to the same periods in 2017 primarily due to an increase
in non-cash stock based compensation expense.
income in the second quarter of 2018 was $971.5 million or $5.33
diluted earnings per share as compared to a net loss of $59.9 million or $0.39 basic
and diluted loss per share in the second quarter of 2017. Net income in the first half of 2018 was $875.7 million or $4.91
diluted earnings per share as compared to a net loss of $123.7 million or $0.80 basic
and diluted loss per share in the first half of 2017.
Second Quarter 2018 and Recent Business Highlights
The company also announced the following upcoming presentations
during the second half of 2018:
American Chemical Society Annual Meeting, Boston, MA:
SMI Immuno-Oncology Conference, London, UK:
Ninth American Conference on Pharmacometrics, San
ESMO 2018 Congress, Munich, Germany:
Conference Call to Discuss Second Quarter 2018 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 8, 2018.
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: http://ir.nektar.com/.
The web broadcast of the conference call will be available for replay through Monday, September 10, 2018.
To access the conference call, follow these instructions:
Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 7099844 (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 Investors page at the Nektar website as soon as practical after the conclusion of the conference call.
About Nektar Therapeutics
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, 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.
Cautionary Note Regarding Forward-Looking Statements
This press release contains uncertain or forward-looking statements which can be identified by words such as: "expect,"
"may," "will," "design," "develop," 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-214, NKTR-181, NKTR-358, NKTR-262 and NKTR-255) and the initiation of Phase
3 registrational 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 even after positive interim data is observed;
(ii) the data package required for approval of an NDA to the FDA is very uncertain and difficult to predict due to broad FDA regulatory
discretion, and changing FDA regulatory guidelines; (iii) regulations concerning and controlling access to opioid-based pharmaceuticals
are strict and it is difficult to predict 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 Annual Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2018. 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
Jodi Sievers of Nektar Therapeutics
CONDENSED CONSOLIDATED BALANCE SHEETS
| ASSETS | June 30, 2018 | December 31, 2017 | (1) | |||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 911,125 | $ | 4,762 | ||||
| Short-term investments | 912,683 | 291,370 | ||||||
| Accounts receivable, net | 35,315 | 5,014 | ||||||
| Inventory | 11,884 | 10,726 | ||||||
| Other current assets | 34,940 | 14,948 | ||||||
| Total current assets | 1,905,947 | 326,820 | ||||||
| Long-term investments | 282,277 | 57,088 | ||||||
| Property, plant and equipment, net | 45,000 | 47,463 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 3,362 | 994 | ||||||
| Total assets | $ | 2,313,087 | $ | 508,866 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 10,674 | $ | 4,782 | ||||
| Accrued compensation | 18,980 | 8,263 | ||||||
| Accrued clinical trial expenses | 20,028 | 9,461 | ||||||
| Other accrued expenses | 14,993 | 10,064 | ||||||
| Interest payable | 4,144 | 4,198 | ||||||
| Deferred revenue, current portion | 17,988 | 18,949 | ||||||
| Other current liabilities | 10,090 | 446 | ||||||
| Total current liabilities | 96,897 | 56,163 | ||||||
| Senior secured notes, net | 246,078 | 245,207 | ||||||
| Liability related to the sale of future royalties, net | 88,867 | 94,655 | ||||||
| Deferred revenue, less current portion | 13,780 | 19,021 | ||||||
| Other long-term liabilities | 7,051 | 5,992 | ||||||
| Total liabilities | 452,673 | 421,038 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 17 | 15 | ||||||
| Capital in excess of par value | 3,094,095 | 2,207,865 | ||||||
| Accumulated other comprehensive loss | (4,002 | ) | (2,111 | ) | ||||
| Accumulated deficit | (1,229,696 | ) | (2,117,941 | ) | ||||
| Total stockholders' equity | 1,860,414 | 87,828 | ||||||
| Total liabilities and stockholders' equity | $ | 2,313,087 | $ | 508,866 |
(1) The consolidated balance sheet at December 31, 2017 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 5,863 | $ | 15,693 | $ | 12,158 | $ | 20,449 | ||||||||
| Royalty revenue | 8,563 | 7,434 | 19,639 | 14,651 | ||||||||||||
| Non-cash royalty revenue related to sale of future royalties | 9,045 | 6,638 | 15,965 | 13,301 | ||||||||||||
| License, collaboration and other revenue | 1,064,246 | 4,824 | 1,077,973 | 10,916 | ||||||||||||
| Total revenue | 1,087,717 | 34,589 | 1,125,735 | 59,317 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 5,522 | 8,989 | 12,168 | 15,120 | ||||||||||||
| Research and development | 88,334 | 60,260 | 187,758 | 121,318 | ||||||||||||
| General and administrative | 20,261 | 15,996 | 38,948 | 27,972 | ||||||||||||
| Total operating costs and expenses | 114,117 | 85,245 | 238,874 | 164,410 | ||||||||||||
| Income (loss) from operations | 973,600 | (50,656 | ) | 886,861 | (105,093 | ) | ||||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest expense | (5,385 | ) | (5,510 | ) | (10,725 | ) | (10,912 | ) | ||||||||
| Non-cash interest expense on liability related to sale of future royalties | (4,975 | ) | (4,512 | ) | (9,994 | ) | (9,064 | ) | ||||||||
| Interest income and other income (expense), net | 12,105 | 906 | 13,676 | 1,564 | ||||||||||||
| Total non-operating income (expense), net | 1,745 | (9,116 | ) | (7,043 | ) | (18,412 | ) | |||||||||
| Income (loss) before provision for income taxes | 975,345 | (59,772 | ) | 879,818 | (123,505 | ) | ||||||||||
| Provision for income taxes | 3,885 | 99 | 4,150 | 232 | ||||||||||||
| Net income (loss) | $ | 971,460 | $ | (59,871 | ) | $ | 875,668 | $ | (123,737 | ) | ||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 5.67 | $ | (0.39 | ) | $ | 5.27 | $ | (0.80 | ) | ||||||
| Diluted | $ | 5.33 | $ | (0.39 | ) | $ | 4.91 | $ | (0.80 | ) | ||||||
| Weighted average shares outstanding used in computing net income (loss) per share: | ||||||||||||||||
| Basic | 171,378 | 155,352 | 166,160 | 154,514 | ||||||||||||
| Diluted | 182,291 | 155,352 | 178,281 | 154,514 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS