Full Press Release Details
SAN FRANCISCO , Nov. 6, 2014 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR ) today reported its financial results for the third quarter ended September 30, 2014 .
Cash and investments in marketable securities at September 30, 2014 were $261.6 million as compared to $301.4 million at June 30, 2014 .
"The recent FDA approval of MOVANTIK TM (naloxegol) was a major milestone for Nektar," said Howard W. Robin , President and Chief Executive Officer of Nektar. "As the first once-daily oral PAMORA approved in the U.S., MOVANTIK provides a new treatment option for a common and potentially debilitating side effect experienced by millions of adult patients treated with opioids. MOVANTIK is the first oral small molecule medicine to be created using our proprietary polymer chemistry platform and it represents a tremendous breakthrough for our technology. In Q3, our partner Baxter announced positive topline data from the pivotal Phase 3 study of BAX 855, a longer-acting PEGylated Factor VIII therapy to treat hemophilia A. Our wholly-owned late-stage clinical pipeline continues to advance as well. We plan to initiate the Phase 3 program for NKTR-181 this quarter and importantly, we are on track to report topline results from our NKTR-102 Phase 3 study in metastatic breast cancer in the first quarter of 2015."
Revenue in the third quarter of 2014 was $132.9 million as compared to $60.9 million in the third quarter of 2013. Year-to-date revenue for 2014 was $181.2 million as compared to $117.8 million in the first nine months of 2013. Revenue increased in the third quarter and first nine months of 2014 as compared to the same periods in 2013 primarily due to $105.0 million in milestones recognized in September 2014 upon the approval of MOVANTIK in the U.S., of which $70.0 million was received in November 2013. These increases in revenue in 2014 were partially offset by a $25.0 million milestone payment recognized in September 2013 upon the acceptance of the MOVANTIK EMA regulatory application. Additionally, product sales and royalty revenue decreased by $8.9 million in the third quarter and $19.9 million for the first nine months of 2014 as compared to the same periods in 2013. Revenue included non-cash royalty revenue, related to our February 2012 royalty monetization, of $6.1 million in the third quarter and $16.8 million year-to-date in 2014, respectively, and $4.5 million in the third quarter and $12.7 million in the first nine months of 2013. This non-cash royalty revenue is offset by non-cash interest expense.
Total operating costs and expenses in the third quarter of 2014 were $52.6 million as compared to $67.4 million in the third quarter of 2013. Year-to-date total operating costs and expenses in 2014 were $160.2 million as compared to $202.0 million for the same period in 2013. Total operating costs and expenses decreased primarily as a result of decreased research and development (R&D) expense, as well as decreased cost of goods sold associated with decreased product sales.
Research and development expenses in the third quarter of 2014 were $34.2 million as compared to $43.9 million in the third quarter of 2013. Year-to-date R&D expense for 2014 was $109.2 million as compared to $141.8 million for the same period in 2013. R&D expense was lower in the third quarter of 2014 and year-to-date as compared to the same periods in 2013 primarily because of reduced activities for the Phase 3 study of etirinotecan pegol (NKTR-102) in metastatic breast cancer as the study progresses toward completion and the completion of our Phase 2 clinical study for NKTR-181 in the third quarter of 2013. These decreases in R&D expense in 2014 were partially offset by costs for the ongoing Phase 1 study of NKTR-171.
General and administrative (G&A) expense was $9.1 million in the third quarter of 2014 as compared to $10.6 million in the third quarter of 2013. G&A expense in the first nine months of 2014 was $28.7 million as compared to $30.7 million for the same period in 2013.
Non-cash interest expense incurred in connection with the February 2012 royalty monetization was $5.2 million and $15.7 million in the third quarter and first nine months of 2014, respectively, as compared to $5.6 million and $16.6 million in the third quarter and first nine months of 2013, respectively.
Net income in the third quarter of 2014 was $70.6 million or $0.53 net income per diluted share as compared to net loss of $16.5 million or $0.14 net loss per diluted share in the third quarter of 2013. Net loss in the first nine months of 2014 was $8.2 million or $0.07 loss per diluted share as compared to net loss of $114.4 million or $0.99 net loss per diluted share in the first nine months of 2013.
The company also announced an upcoming presentation at the following scientific congress during the fourth quarter of 2014:
Society for Neuroscience, Washington, DC :
26th EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics, Barcelona, Spain :
AACR Tumor Immunology and Immunotherapy, Orlando, FL :
2014 San Antonio Breast Cancer Symposium, San Antonio, TX :
Conference Call to Discuss Third Quarter 2014 Financial Results
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, Thursday, November 6, 2014 .
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 Monday, December 8, 2014 .
To access the conference call, follow these instructions: Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international) Passcode : 25628597 (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 call.
About Nektar Nektar Therapeutics has a robust R&D pipeline of potentially high-value therapeutics in pain, oncology, hemophilia and other therapeutic areas. In the area of pain, Nektar has an exclusive worldwide license agreement with AstraZeneca for MOVANTIK TM , 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 AstraZeneca agreement also includes NKTR-119, an earlier stage development program that is a co-formulation of MOVANTIK TM and an opioid. NKTR-181, a wholly-owned mu-opioid analgesic molecule for chronic pain conditions, has completed Phase 2 development. NKTR-171, a wholly-owned new sodium channel blocker being developed as an oral therapy for the treatment of peripheral neuropathic pain, is in Phase 1 clinical development. In oncology, etirinotecan pegol (NKTR-102) is being evaluated in a Phase 3 clinical study (the BEACON study) for the treatment of metastatic breast cancer. In hemophilia, BAX 855, a longer-acting PEGylated Factor VIII therapeutic is in Phase 3 development conducted by partner Baxter . In anti-infectives, Amikacin Inhale is in Phase 3 studies conducted by Bayer Healthcare as an adjunctive treatment for intubated and mechanically ventilated 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 TM , 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 its drug development programs and capabilities may be found online at http://www.nektar.com .
MOVANTIK TM is a trademark of the AstraZeneca group of companies.
Cautionary Note Regarding Forward-Looking Statements
| Nektar Investor Inquiries: | |
| Jennifer Ruddock/Nektar Therapeutics | (415) 482-5585 |
| Andrea Rabney/Argot Partners | (212) 600-1494 |
| Nektar Media Inquiries: | |
| Nadia Hasan/WCG | (212) 257-6738 |
| NEKTAR THERAPEUTICS | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
| ASSETS | September 30, 2014 | December 31, 2013 | (1) | ||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ 32,008 | $ 39,067 | |||||||
| Restricted cash | 25,000 | - | |||||||
| Short-term investments | 204,635 | 197,959 | |||||||
| Accounts receivable, net | 46,074 | 2,229 | |||||||
| Inventory | 11,695 | 13,452 | |||||||
| Other current assets | 4,708 | 5,175 | |||||||
| Total current assets | 324,120 | 257,882 | |||||||
| Restricted cash | - | 25,000 | |||||||
| Property and equipment, net | 69,275 | 66,974 | |||||||
| Goodwill | 76,501 | 76,501 | |||||||
| Other assets | 7,006 | 8,170 | |||||||
| Total assets | $ 476,902 | $ 434,527 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ 5,428 | $ 9,115 | |||||||
| Accrued compensation | 13,753 | 14,254 | |||||||
| Accrued expenses | 7,760 | 6,243 | |||||||
| Accrued clinical trial expenses | 9,643 | 16,905 | |||||||
| Interest payable | 3,167 | 6,917 | |||||||
| Deferred revenue, current portion | 24,626 | 23,664 | |||||||
| Other current liabilities | 16,172 | 21,123 | |||||||
| Total current liabilities | 80,549 | 98,221 | |||||||
| Senior secured notes | 125,000 | 125,000 | |||||||
| Capital lease obligations, less current portion | 5,339 | 8,049 | |||||||
| Liability related to receipt of refundable milestone payment | - | 70,000 | |||||||
| Liability related to sale of future royalties, less current portion | 120,492 | 121,520 | |||||||
| Deferred revenue, less current portion | 82,902 | 82,384 | |||||||
| Other long-term liabilities | 15,402 | 19,256 | |||||||
| Total liabilities | 429,684 | 524,430 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders' equity (deficit) : | |||||||||
| Preferred stock | - | - | |||||||
| Common stock | 12 | 11 | |||||||
| Capital in excess of par value | 1,789,010 | 1,643,660 | |||||||
| Accumulated other comprehensive loss | (1,178) | (1,181) | |||||||
| Accumulated deficit | (1,740,626) | (1,732,393) | |||||||
| Total stockholders' equity (deficit) | 47,218 | (89,903) | |||||||
| Total liabilities and stockholders' equity (deficit) | $ 476,902 | $ 434,527 |
| NEKTAR THERAPEUTICS | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (In thousands, except per share information) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||
| Revenue: | ||||||||||||
| Product sales and royalty revenue | $ 6,172 | $ 15,026 | $ 17,980 | $ 37,836 | ||||||||
| Non-cash royalty revenue related to sale of future royalties | 6,143 | 4,523 | 16,753 | 12,744 | ||||||||
| License, collaboration and other revenue | 120,556 | 41,360 | 146,422 | 67,195 | ||||||||
| Total revenue | 132,871 | 60,909 | 181,155 | 117,775 | ||||||||
| Operating costs and expenses: | ||||||||||||
| Cost of goods sold | 9,220 | 12,877 | 22,235 | 29,549 | ||||||||
| Research and development | 34,200 | 43,914 | 109,240 | 141,762 | ||||||||
| General and administrative | 9,130 | 10,643 | 28,677 | 30,700 | ||||||||
| Total operating costs and expenses | 52,550 | 67,434 | 160,152 | 202,011 | ||||||||
| Income (loss) from operations | 80,321 | (6,525) | 21,003 | (84,236) | ||||||||
| Non-operating income (expense): | ||||||||||||
| Interest income | 133 | 116 | 399 | 639 | ||||||||
| Interest expense | (4,391) | (4,587) | (13,412) | (13,888) | ||||||||
| Non-cash interest expense on liability related to sale of future royalties | (5,203) | (5,616) | (15,725) | (16,644) | ||||||||
| Other income (expense), net | (7) | 262 | 136 | 385 | ||||||||
| Total non-operating expense, net | (9,468) | (9,825) | (28,602) | (29,508) | ||||||||
| Income (loss) before provision for income taxes | 70,853 | (16,350) | (7,599) | (113,744) | ||||||||
| Provision for income taxes | 248 | 193 | 634 | 610 | ||||||||
| Net income (loss) | $ 70,605 | $ (16,543) | $ (8,233) | $ (114,354) | ||||||||
| Net income (loss) per share: | ||||||||||||
| Basic | $ 0.55 | $ (0.14) | $ (0.07) | $ (0.99) | ||||||||
| Diluted | $ 0.53 | $ (0.14) | $ (0.07) | $ (0.99) | ||||||||
| Weighted average shares outstanding used in computing net income (loss) per share | ||||||||||||
| Basic | 127,504 | 115,812 | 126,043 | 115,557 | ||||||||
| Diluted | 132,177 | 115,812 | 126,043 | 115,557 |
| NEKTAR THERAPEUTICS | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||
| 2014 | 2013 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ (8,233) | $ (114,354) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Recognition of previously received milestone payment which is no longer refundable | (70,000) | - | ||||||||||
| Non-cash royalty revenue related to sale of future royalties | (16,753) | (12,744) | ||||||||||
| Non-cash interest expense on liability related to sale of future royalties | 15,725 | 16,644 | ||||||||||
| Stock-based compensation | 12,647 | 13,165 | ||||||||||
| Depreciation and amortization | 9,733 | 10,882 | ||||||||||
| Other non-cash transactions | 313 | 332 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable, net | (43,845) | 1,248 | ||||||||||
| Inventory | 1,757 | 3,193 | ||||||||||
| Other assets | 679 | 6,817 | ||||||||||
| Accounts payable | (3,670) | 697 | ||||||||||
| Accrued compensation | (501) | 5,137 | ||||||||||
| Accrued expenses | 1,667 | 2,741 | ||||||||||
| Accrued clinical trial expenses | (7,262) | (2,261) | ||||||||||
| Interest payable | (3,750) | (3,916) | ||||||||||
| Deferred revenue | 1,480 | (14,914) | ||||||||||
| Other liabilities | (7,366) | (4,825) | ||||||||||
| Net cash used in operating activities | (117,379) | (92,158) | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Maturities of investments | 171,826 | 274,011 | ||||||||||
| Purchases of investments | (200,160) | (140,569) | ||||||||||
| Sales of investments | 21,661 | - | ||||||||||
| Purchases of property and equipment | (6,090) | (1,382) | ||||||||||
| Net cash (used in) provided by investing activities | (12,763) | 132,060 | ||||||||||
| Cash flows from financing activities: | ||||||||||||
| Payment of capital lease obligations | (2,578) | (2,201) | ||||||||||
| Repayment of proceeds from sale of future royalties | (7,000) | (3,000) | ||||||||||
| Issuance of common stock, net of issuance costs | 116,536 | - | ||||||||||
| Proceeds from shares issued under equity compensation plans | 16,168 | 5,253 | ||||||||||
| Net cash provided by financing activities | 123,126 | 52 | ||||||||||
| Effect of exchange rates on cash and cash equivalents | (43) | 20 | ||||||||||
| Net (decrease) increase in cash and cash equivalents | (7,059) | 39,974 | ||||||||||
| Cash and cash equivalents at beginning of period | 39,067 | 25,437 | ||||||||||
| Cash and cash equivalents at end of period | $ 32,008 | $ 65,411 | ||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Cash paid for interest | $ 16,487 | $ 17,097 |
SOURCE Nektar Therapeutics