Full Press Release Details
Nektar Therapeutics Reports First Quarter 2023
SAN FRANCISCO, May 9, 2023 /PRNewswire/ - Nektar Therapeutics
(Nasdaq: NKTR) today reported financial results for the first quarter ended March 31, 2023.
Cash and investments in marketable securities at March 31, 2023, were
$456.8 million as compared to $505.0 million at December 31, 2022. Nektar's cash and marketable securities are expected to support strategic
development activities and operations into at least the middle of 2026.
"With Nektar regaining full rights to
rezpegaldesleukin, we are already making progress towards initiating a Phase 2b study in atopic dermatitis," said Howard W.
Robin, President and CEO of Nektar. "We are confident that our focus on immunology is the best path forward to bring important
potential therapies to patients and create shareholder value. Based on feedback from key opinion leaders in atopic dermatitis, we
are enthusiastic about the future prospects for rezpegaldesleukin in a significant and growing biologic treatment landscape.
Finally, we are working diligently to advance our immunology research pipeline with the goal of advancing a new IND candidate next
Summary of Financial Results
Revenue in the first quarter of 2023 was $21.6 million as compared
to $24.8 million in the first quarter of 2022.
Total operating costs and expenses in the first quarter of 2023 were
$156.3 million as compared to $141.4 million in the first quarter of 2022. Operating costs and expenses for the first quarter include
$76.5 million in non-cash goodwill impairment, $13.2 million in other non-cash impairment charges primarily related to lease assets, and
$8.0 million in other restructuring costs, offset by decreases in R&D and G&A expenses.
R&D expense in the first quarter of 2023 was $30.5 million as compared
to $107.3 million for the first quarter of 2022. R&D expense decreased primarily due to the wind down of the bempegaldesleukin program.
G&A expense was $21.1 million in the first quarter of 2023 as compared
to $27.3 million in the first quarter of 2022. G&A expense decreased primarily due to the wind down of the bempegaldesleukin program.
Restructuring, impairment and costs of the terminated program were
$21.2 million in the first quarter of 2023 as compared to $1.5 million in the first quarter of 2022. The amount for the first quarter
of 2023 includes $13.2 million in non-cash lease and equipment impairment charges, $5.5 million in severance, and $2.5 million in other
Net loss for the first quarter of 2023 was $137.0 million or $0.73
basic and diluted loss per share as compared to a net loss of $90.4 million or $0.49 basic and diluted loss per share in the first quarter
of 2022. Excluding the $89.7 million in non-cash goodwill and other impairment charges, net loss, on a non-GAAP basis, for the first quarter
of 2023 was $47.3 million or $0.25 basic and diluted loss per share.
First Quarter 2023 and Recent Business Updates
Conference Call to Discuss First Quarter 2023 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, May 9, 2023.
The press release and 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 June 4, 2023.
To access the conference call, please pre-register at Nektar Earnings
Call Registration. All registrants will receive dial-in information and a PIN allowing them to access the live call.
About Nektar Therapeutics
Nektar Therapeutics is a biopharmaceutical company with a robust, wholly
owned R&D pipeline of investigational medicines in immunology and oncology as well as a portfolio of approved partnered medicines.
Nektar is headquartered in San Francisco, California, with additional manufacturing operations in Huntsville, Alabama. 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: "will," "may," "advance," "support," "develop," "progress,"
"expect," "potential" and similar references to future periods. Examples of forward-looking statements include, among
others, statements regarding the therapeutic potential of, and future development plans for, rezpegaldesleukin and our other drug candidates
in research programs, the timing for filing a new IND, our expectations regarding our 2023 cost restructuring plan, and our expected working
capital and cash runway. 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) our statements regarding the therapeutic potential of rezpegaldesleukin and
our other drug candidates are based on preclinical and clinical findings and observations and are subject to change as research and development
continue; (ii) rezpegaldesleukin and our other drug candidates 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) rezpegaldesleukin and our other drug candidates 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) we may not achieve the expected cost savings we expect from our 2023 cost restructuring plan and we may
undertake additional restructuring and cost-saving activities in the future, (vi) 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 (vii) 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, 2023. 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
David Rosen of Argot Partners
CONDENSED CONSOLIDATED BALANCE SHEETS
| ASSETS | March 31, 2023 | December 31, 2022 (1) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 76,955 | $ | 88,227 | ||||
| Short-term investments | 379,872 | 416,750 | ||||||
| Accounts receivable | 2,995 | 5,981 | ||||||
| Inventory, net | 20,235 | 19,202 | ||||||
| Other current assets | 11,009 | 15,808 | ||||||
| Total current assets | 491,066 | 545,968 | ||||||
| Property, plant and equipment, net | 27,084 | 32,451 | ||||||
| Operating lease right-of-use assets | 42,187 | 53,435 | ||||||
| Goodwill | - | 76,501 | ||||||
| Other assets | 1,406 | 2,245 | ||||||
| Total assets | $ | 561,743 | $ | 710,600 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 3,696 | 12,980 | ||||||
| Accrued expenses | 37,410 | 36,557 | ||||||
| Operating lease liabilities, current portion | 18,773 | 18,667 | ||||||
| Total current liabilities | 59,879 | 68,204 | ||||||
| Operating lease liabilities, less current portion | 109,389 | 112,829 | ||||||
| Liabilities related to the sales of future royalties, net | 145,131 | 155,378 | ||||||
| Other long-term liabilities | 6,479 | 7,551 | ||||||
| Total liabilities | 320,878 | 343,962 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 19 | 19 | ||||||
| Capital in excess of par value | 3,584,738 | 3,574,719 | ||||||
| Accumulated other comprehensive loss | (5,681 | ) | (6,907 | ) | ||||
| Accumulated deficit | (3,338,211 | ) | (3,201,193 | ) | ||||
| Total stockholders' equity | 240,865 | 366,638 | ||||||
| Total liabilities and stockholders' equity | $ | 561,743 | $ | 710,600 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
| Three months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Product sales | $ | 4,718 | $ | 5,688 | ||||
| Non-cash royalty revenue related to the sales of future royalties | 16,861 | 17,561 | ||||||
| License, collaboration and other revenue | 15 | 1,573 | ||||||
| Total revenue | 21,594 | 24,822 | ||||||
| Operating costs and expenses: | ||||||||
| Cost of goods sold | 7,060 | 5,315 | ||||||
| Research and development | 30,469 | 107,253 | ||||||
| General and administrative | 21,081 | 27,339 | ||||||
| Restructuring, impairment, and costs of terminated program | 21,193 | 1,475 | ||||||
| Impairment of goodwill | 76,501 | - | ||||||
| Total operating costs and expenses | 156,304 | 141,382 | ||||||
| Loss from operations | (134,710 | ) | (116,560 | ) | ||||
| Non-operating income (expense): | ||||||||
| Change in fair value of development derivative liability | - | 33,427 | ||||||
| Non-cash interest expense on liabilities related to the sales of future royalties | (6,405 | ) | (7,529 | ) | ||||
| Interest income and other income (expense), net | 4,034 | 395 | ||||||
| Total non-operating income (expense), net | (2,371 | ) | 26,293 | |||||
| Loss before provision for income taxes | (137,081 | ) | (90,267 | ) | ||||
| Provision for income taxes | (63 | ) | 126 | |||||
| Net loss | $ | (137,018 | ) | $ | (90,393 | ) | ||
| Basic and diluted net loss per share | $ | (0.73 | ) | $ | (0.49 | ) | ||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 188,875 | 185,848 |