Full Press Release Details
Therapeutics Reports Fourth Quarter and Year-End 2017 Financial Results
SAN FRANCISCO, March 1, 2018 /PRNewswire/ --
Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the fourth quarter and year ended December 31, 2017.
and investments in marketable securities at December 31, 2017 were $353.2 million as compared to $389.1 million at December 31,
2016. This does not include $1.85 billion in upfront payments from the new Bristol-Myers Squibb collaboration, which was announced
on February 14, 2018.
past year was truly transformational for Nektar as we achieved a number of successes with Nektar medicines across our three key
therapeutic areas of immuno-oncology, immunology and pain," said Howard W. Robin, President and Chief Executive Officer
of Nektar. "In the area of pain, we completed a successful Phase 3 program for NKTR-181 in over 2,100 patients and healthy
volunteers that will comprise our NDA submission in the second quarter of this year. In immunology, we entered into a major partnership
with Eli Lilly for NKTR-358, a potential first-in-class T regulatory resolution therapeutic, which will be developed to treat
a broad range of auto-immune disorders. Finally, in immuno-oncology, the clinical success we achieved with NKTR-214 led to a groundbreaking
collaboration with Bristol-Myers Squibb that now enables us to broadly and rapidly advance NKTR-214 into over 20 registrational
trials in up to 15,000 patients."
of Financial Results
for the fourth quarter of 2017 was $95.5 million as compared to $37.5 million in the fourth quarter of 2016. Revenue in the fourth
quarter of 2017 included a total of $60.0 million of non-recurring revenue related to a new sublicense agreement, a contract settlement
agreement and the recognition of deferred revenue from several collaboration agreements.
for the year ended December 31, 2017 was $307.7 million as compared to $165.4 million in 2016. Revenue in 2017 included recognition
of $130.1 million of the $150.0 million upfront payment from Nektar's collaboration with Eli Lilly & Company for the
development and commercialization of NKTR-358.
operating costs and expenses in the fourth quarter of 2017 were $119.5 million as compared to $69.6 million in the fourth quarter
of 2016. Total operating costs and expenses increased primarily as a result of higher research and development (R&D) expense.
Total operating costs and expenses for the year ended December 31, 2017 were $367.4 million as compared to $278.3 million in 2016.
expense in the fourth quarter of 2017 was $81.4 million as compared to $50.2 million for the fourth quarter of 2016. R&D expense
for the year ended December 31, 2017 was $268.5 million as compared to $203.8 million in 2016. R&D expense was higher in 2017
as compared to 2016 primarily because of expenses for our pipeline programs, including the completion of Phase 3 clinical studies
for NKTR-181, Phase 1/2 clinical studies of NKTR-214 and NKTR-358, and IND-enabling activities for NKTR-262 and NKTR-255.
and administrative (G&A) expense was $12.3 million in the fourth quarter of 2017 as compared to $12.8 million in the fourth
quarter of 2016. G&A expense for the year ended December 31, 2017 was $52.4 million as compared to $44.3 million in 2016.
loss for the fourth quarter of 2017 was $33.8 million or $0.21 loss per share as compared to a net loss of $42.2 million or $0.28
loss per share in the fourth quarter of 2016. Net loss for the year ended December 31, 2017 was $96.7 million or $0.62 loss per
share as compared to a net loss of $153.5 million or $1.10 loss per share in 2016.
and Year-to-Date Business Highlights
company also announced upcoming presentations at the following scientific congresses during the first half of 2018:
Association for Cancer Research (AACR) Annual Meeting 2018, Chicago, IL:
Immune Tolerance Drug Development Summit 2018, Boston, MA:
Academy of Pain Medicine 34th Annual Meeting, Vancouver, BC:
Directed Therapy for Autoimmune Disorders Meeting, Boston, MA:
Annual Advances in Immuno-Oncology Congress, London, U.K.:
on Problems of Drug Dependence 80th Annual Scientific Meeting, San Diego, CA:
Call to Discuss Fourth Quarter and Year-End 2017 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, March 1, 2018.
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, April 2, 2018.
access the conference call, follow these instructions:
(877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 6299239 (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.
Opdivo is a registered trademark of Bristol-Myers Squibb, TECENTRIQ is a registered trademark of Roche and
KEYTRUDA is a registered trademark of Merck.
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," "prepare," "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-214, NKTR-181, NKTR-358, NKTR-262 and NKTR-255), the
potential impact of NKTR-181 with respect to the opioid abuse epidemic, the timing and strategy for regulatory filings (including
the timing and strategy for filing a new drug application, "NDA"), and the results of 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 even after positive interim data is observed; (ii) the regulatory pathway
to review and approve pharmaceutical products is subject to substantial uncertainty; (iii) the data package required for filing
and 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; (iv) the final outcomes and conclusions from sponsor meetings with FDA are subject to substantial FDA
discretion associated with issuing final meeting minutes and outcomes; (v) 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; (vi) the timing of regulatory approval for the recently announced strategic collaboration agreement with Bristol-Myers
Squibb is uncertain; (vii) 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 (viii) certain other
important risks and uncertainties set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission
on March 1, 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
Sievers of Nektar Therapeutics
CONSOLIDATED BALANCE SHEETS
| ASSETS | December 31, 2017 (1) | December 31, 2016 (1) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,762 | $ | 59,640 | ||||
| Short-term investments | 291,370 | 329,462 | ||||||
| Accounts receivable, net | 5,014 | 15,678 | ||||||
| Inventory | 10,726 | 11,109 | ||||||
| Other current assets | 14,948 | 10,063 | ||||||
| Total current assets | 326,820 | 425,952 | ||||||
| Long-term investments | 57,088 | - | ||||||
| Property, plant and equipment, net | 47,463 | 65,601 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 994 | 817 | ||||||
| Total assets | $ | 508,866 | $ | 568,871 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,782 | $ | 2,816 | ||||
| Accrued compensation | 8,263 | 18,280 | ||||||
| Accrued clinical trial expenses | 9,461 | 7,958 | ||||||
| Other accrued expenses | 10,064 | 4,711 | ||||||
| Interest payable | 4,198 | 4,198 | ||||||
| Liability related to refundable upfront payment | - | 12,500 | ||||||
| Deferred revenue, current portion | 18,949 | 14,352 | ||||||
| Other current liabilities | 446 | 7,407 | ||||||
| Total current liabilities | 56,163 | 72,222 | ||||||
| Senior secured notes, net | 245,207 | 243,464 | ||||||
| Liability related to the sale of future royalties, net | 94,655 | 105,950 | ||||||
| Deferred revenue, less current portion | 19,021 | 51,887 | ||||||
| Other long-term liabilities | 5,992 | 7,223 | ||||||
| Total liabilities | 421,038 | 480,746 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 15 | 15 | ||||||
| Capital in excess of par value | 2,207,865 | 2,111,483 | ||||||
| Accumulated other comprehensive loss | (2,111 | ) | (2,363 | ) | ||||
| Accumulated deficit | (2,117,941 | ) | (2,021,010 | ) | ||||
| Total stockholders' equity | 87,828 | 88,125 | ||||||
| Total liabilities and stockholders' equity | $ | 508,866 | $ | 568,871 |
The consolidated balance sheets at December 31, 2017 and 2016 have been derived from the audited financial statements at those
dates but do not include all of the information and notes required by generally accepted accounting principles in the United States
for complete financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
thousands, except per share information)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 (1) | 2016 (1) | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 7,791 | $ | 13,690 | $ | 32,688 | $ | 55,354 | ||||||||
| Royalty revenue | 9,574 | 6,392 | 33,527 | 19,542 | ||||||||||||
| Non-cash royalty revenue related to sale of future royalties | 9,164 | 7,817 | 30,531 | 30,158 | ||||||||||||
| License, collaboration and other revenue | 68,937 | 9,553 | 210,965 | 60,382 | ||||||||||||
| Total revenue | 95,466 | 37,452 | 307,711 | 165,436 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 9,753 | 6,604 | 30,547 | 30,215 | ||||||||||||
| Research and development | 81,429 | 50,232 | 268,461 | 203,801 | ||||||||||||
| General and administrative | 12,337 | 12,760 | 52,364 | 44,275 | ||||||||||||
| Impairment of equipment and other costs for terminated program | 15,981 | - | 15,981 | - | ||||||||||||
| Total operating costs and expenses | 119,500 | 69,596 | 367,353 | 278,291 | ||||||||||||
| Loss from operations | (24,034 | ) | (32,144 | ) | (59,642 | ) | (112,855 | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest expense | (5,633 | ) | (5,550 | ) | (22,085 | ) | (22,468 | ) | ||||||||
| Non-cash interest expense on liability related to sale of future royalties | (5,334 | ) | (4,783 | ) | (18,869 | ) | (19,712 | ) | ||||||||
| Interest income and other income (expense), net | 1,357 | 721 | 4,520 | 2,387 | ||||||||||||
| Total non-operating expense, net | (9,610 | ) | (9,612 | ) | (36,434 | ) | (39,793 | ) | ||||||||
| Loss before provision for income taxes | (33,644 | ) | (41,756 | ) | (96,076 | ) | (152,648 | ) | ||||||||
| Provision for income taxes | 182 | 443 | 616 | 876 | ||||||||||||
| Net loss | $ | (33,826 | ) | $ | (42,199 | ) | $ | (96,692 | ) | $ | (153,524 | ) | ||||
| Basic and diluted net loss per share | $ | (0.21 | ) | $ | (0.28 | ) | $ | (0.62 | ) | $ | (1.10 | ) | ||||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 158,324 | 149,071 | 155,953 | 139,596 |
The consolidated statements of operations for the years ended December 31, 2017 and 2016 have been derived from the audited financial
statements as of those dates but do not include all of the information and notes required by generally accepted accounting principles
in the United States for complete financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS