Full Press Release Details
Nektar Therapeutics Reports First Quarter
2020 Financial Results
SAN FRANCISCO, May 7, 2020 - Nektar
Therapeutics (Nasdaq: NKTR) today reported financial results for the first quarter ended March 31, 2020.
Cash and investments in marketable securities at March
31, 2020 were approximately $1.5 billion as compared to $1.6 billion at December 31, 2019.
"Amid the challenges of the evolving COVID-19 pandemic,
our Nektar team made significant progress to advance our various clinical studies for our immuno-oncology pipeline while also prioritizing
the safety of the patients we serve, our employees and the physicians and staff in our clinical trial network," said Howard
W. Robin, President and CEO of Nektar. "For our ongoing studies in oncology, we are working with our global study sites to
ensure that patients continue to receive uninterrupted access to study treatment and that we preserve the integrity and conduct
of our trials. Many of our clinical trial timelines remain intact; however, at this time, we currently expect that enrollment and
study starts managed by our partners will likely be delayed from three to six months. From an operational perspective, Nektar's
strong financial position coupled with decisive mitigation actions to address the potential impact to our business, provides a
solid foundation for Nektar as we navigate this unprecedented time."
Summary of Q1 2020 Financial Results
Revenue in the first quarter of 2020 was $50.6 million as
compared to $28.2 million in the first quarter of 2019. The increase was due primarily to the recognition of a $25.0
million milestone payment from Bristol-Myers Squibb related to the initiation of the registrational trial of bempegaldesleukin
plus Opdivo in muscle-invasive bladder cancer.
Total operating costs and expenses in the first quarter of 2020
were $184.2 million as compared to $148.9 million in the first quarter of 2019. Total operating costs and expenses
increased primarily as a result of impairment of assets and other costs for NKTR-181, partially offset by a decrease in R&D.
During the first quarter of 2020, Nektar reported $45.2 million
in impairment charges and additional costs related to the discontinuation of the NKTR-181 program, which was announced in January
2020. This includes $19.7 million for the impairment of advance payments to contract manufacturers for commercial batches of NKTR-181,
and $25.5 million of additional costs, primarily for non-cancellable commitments to contract manufacturers and certain severance
R&D expense in the first quarter of 2020 was $109.0
million as compared to $118.5 million for the first quarter of 2019. The decrease was due primarily to pre-commercial
manufacturing costs for NKTR-181 incurred during the three months ended March 31, 2019.
G&A expense was $26.2 million in the first quarter
of 2020 as compared to $25.0 million in the first quarter of 2019.
Net loss for the first quarter of 2020 was $138.7 million or $0.78 basic
and diluted loss per share as compared to a net loss of $119.6 million or $0.69 basic and diluted loss per
share in the first quarter of 2019. The loss per share for the first quarter of 2020 includes $0.25 loss per share for the impairment
charges and additional costs related to the discontinuation of the NKTR-181 program.
COVID-19 Business Update and Review
Nektar remains committed to advancing its mission of bringing
forth novel therapies for the treatment of cancer and autoimmune disorders. The company continues to closely monitor the evolving
situation with COVID-19 to prepare for and minimize the potential impact to the business as a result of the COVID-19 pandemic.
Nektar-Sponsored Clinical Trials:
Nektar Manufacturing and Supply:
Partner-Sponsored Clinical Trials:
First Quarter 2020 and Recent Business Highlights:
Conference Call to Discuss First Quarter
2020 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, Thursday, May 7, 2020.
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 June 1, 2020.
To access the conference call, follow these instructions:
Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)
Passcode: 8288857 (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.
Nektar Therapeutics is a biopharmaceutical company with a robust, wholly-owned R&D pipeline of investigational medicines
in oncology and immunology as well as a portfolio of approved partnered medicines. 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 forward-looking statements which can be identified by words such as: "may," "ensure,"
"expect," "preserve," "provide," "remain," "continue," "anticipate,"
and similar references to future periods. Examples of forward-looking statements include, among others, statements we make concerning
estimates and predictions of the COVID-19 pandemic's impact on our business and clinical trials, the preservation of clinical trial
integrity and conduct (including patient compliance with clinical trial treatment visits, scheduled patient scans and data collection),
the timing of the initiation of clinical studies for our drug candidates, and future supply of our drug candidates. Forward-looking
statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs,
expectations and assumptions regarding the future of our business, future plans and strategies, anticipated events and trends,
the economy and other future conditions. Because forward-looking statements relate to the future, they 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. Therefore, you should not rely on
any of these forward-looking statements. Important factors that could cause our actual results to differ materially from those
indicated in the forward-looking statements include, among others: (i) the extent and duration of the impact of the COVID-19 pandemic
on our business, regulatory efforts, research and development, clinical trials (including those being led by us and our partners),
and corporate development activities will depend on future developments that are highly uncertain and cannot be accurately predicted,
such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements
in the U.S. and in other countries, as well as the effectiveness of actions taken globally to contain and treat the disease; (ii)
bempegaldesleukin, NKTR-262, NKTR-358 and NKTR-255 are investigational agents and continued research and development for these
drug candidates is subject to substantial risks, including negative safety and efficacy findings in ongoing clinical studies (notwithstanding
positive findings in earlier preclinical and clinical studies); (iii) bempegaldesleukin, NKTR-262, NKTR-358 and NKTR-255 are in
various stages of clinical development and the risk of failure is high and can unexpectedly occur at any stage prior to regulatory
approval; (iv) the timing of the commencement or end of clinical trials 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, competitive factors, or delay or failure in
ultimately obtaining regulatory approval in one or more important markets; (v) 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 (vi) certain other important risks and uncertainties set forth in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission on February 28, 2020. 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, whether written or oral, that may be made from time to time, whether as
a result of new information, future developments or otherwise.
Vivian Wu of Nektar Therapeutics
Opdivo is a registered trademark of Bristol-Myers Squibb Company.
CONSOLIDATED BALANCE SHEETS
| March 31, 2020 | December 31, 2019 (1) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 227,035 | $ | 96,363 | ||||
| Short-term investments | 1,118,847 | 1,228,499 | ||||||
| Accounts receivable | 42,031 | 36,802 | ||||||
| Inventory | 14,320 | 12,665 | ||||||
| Advance payments to contract manufacturers | 13,280 | 31,834 | ||||||
| Other current assets | 13,811 | 15,731 | ||||||
| Total current assets | 1,429,324 | 1,421,894 | ||||||
| Long-term investments | 185,900 | 279,119 | ||||||
| Property, plant and equipment, net | 62,307 | 65,665 | ||||||
| Operating lease right-of-use assets | 133,901 | 134,177 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Total assets | $ | 1,887,933 | $ | 1,977,356 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Senior secured notes, net and interest payable (see Note 9) | $ | 254,144 | $ | 252,891 | ||||
| Accounts payable | 21,789 | 19,234 | ||||||
| Accrued compensation | 22,412 | 11,467 | ||||||
| Accrued clinical trial expenses | 38,624 | 32,626 | ||||||
| Accrued contract manufacturing expenses | 8,579 | 7,304 | ||||||
| Other accrued expenses | 11,844 | 11,414 | ||||||
| Operating lease liabilities, current portion | 15,613 | 12,516 | ||||||
| Deferred revenue, current portion | 3,007 | 5,517 | ||||||
| Other current liabilities | 1,459 | 1,692 | ||||||
| Total current liabilities | 377,471 | 354,661 | ||||||
| Operating lease liabilities, less current portion | 142,297 | 142,730 | ||||||
| Liability related to the sale of future royalties, net | 69,185 | 72,020 | ||||||
| Deferred revenue, less current portion | 2,554 | 2,554 | ||||||
| Total liabilities | 591,507 | 571,965 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 17 | 17 | ||||||
| Capital in excess of par value | 3,306,655 | 3,271,097 | ||||||
| Accumulated other comprehensive loss | (6,877 | ) | (1,005 | ) | ||||
| Accumulated deficit | (2,003,369 | ) | (1,864,718 | ) | ||||
| Total stockholders' equity | 1,296,426 | 1,405,391 | ||||||
| Total liabilities and stockholders' equity | $ | 1,887,933 | $ | 1,977,356 |
CONSOLIDATED STATEMENTS OF OPERATIONS
thousands, except per share information)
| Three months ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenue: | ||||||||
| Product sales | $ | 3,444 | $ | 4,398 | ||||
| Royalty revenue | 9,719 | 11,390 | ||||||
| Non-cash royalty revenue related to sale of future royalties | 9,895 | 8,230 | ||||||
| License, collaboration and other revenue | 27,515 | 4,204 | ||||||
| Total revenue | 50,573 | 28,222 | ||||||
| Operating costs and expenses: | ||||||||
| Cost of goods sold | 3,811 | 5,440 | ||||||
| Research and development | 108,987 | 118,463 | ||||||
| General and administrative | 26,217 | 25,006 | ||||||
| Impairment of assets and other costs for terminated program | 45,189 | - | ||||||
| Total operating costs and expenses | 184,204 | 148,909 | ||||||
| Loss from operations | (133,631 | ) | (120,687 | ) | ||||
| Non-operating income (expense): | ||||||||
| Interest expense | (6,204 | ) | (5,226 | ) | ||||
| Non-cash interest expense on liability related to sale of future royalties | (6,968 | ) | (6,065 | ) | ||||
| Interest income and other income (expense), net | 8,352 | 12,483 | ||||||
| Total non-operating income (expense), net | (4,820 | ) | 1,192 | |||||
| Loss before provision for income taxes | (138,451 | ) | (119,495 | ) | ||||
| Provision for income taxes | 200 | 137 | ||||||
| Net loss | $ | (138,651 | ) | $ | (119,632 | ) | ||
| Basic and diluted net loss per share | $ | (0.78 | ) | $ | (0.69 | ) | ||
| Weighted average shares outstanding used in computing net loss per share | 177,185 | 173,859 |