Full Press Release Details
Therapeutics Reports Fourth Quarter and Year-End 2018 Financial Results
FRANCISCO, Feb. 28, 2019 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the fourth
quarter and full year ended December 31, 2018.
and investments in marketable securities at December 31, 2018 were $1.9 billion as compared to $353.2 million at December 31,
was a remarkable year for Nektar accentuated by new collaborations with leading pharmaceutical companies that validate the depth
and innovation of our pipeline," said Howard W. Robin, President and Chief Executive Officer of Nektar. "We entered
2019 in an exceptionally strong financial position. We are working closely with the FDA during the ongoing review of our NDA for
NKTR-181 while simultaneously preparing for a potential commercial launch later this year. We continue to design and execute on
our broad registrational program for NKTR-214 (bempegaldesleukin1) with our partner Bristol-Myers Squibb. NKTR-358
is advancing in the ongoing clinical study in lupus patients and two new studies in additional auto-immune conditions are planned
to start in 2019.NKTR-262, our TLR agonist is being evaluated in a Phase 1/2 study and finally, NKTR-255, our next I-O candidate
is slated to move into the clinic first in patients with multiple myeloma and then in combination with CAR-T therapy."
of Financial Results
Revenue for the fourth quarter of 2018 was $39.8 million as compared to $95.5 million in the fourth quarter
of 2017. 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. Revenue
for the year ended December 31, 2018 was $1.2 billion as compared to $307.7 million in 2017 and included the recognition
of $1.06 billion of license revenue from the Bristol-Myers Squibb collaboration agreement.
operating costs and expenses in the fourth quarter of 2018 were $140.1 million as compared to $119.5 million in the fourth quarter
of 2017. Total operating costs and expenses for 2018 were $505.4 million as compared to $367.4 million in 2017. Total operating
costs and expenses increased primarily as a result of increased research and development (R&D) expense.
expense in the fourth quarter of 2018 was $108.9 million as compared to $81.4 million for the fourth quarter of 2017. R&D
expense for the year ended December 31, 2018 was $399.5 million as compared to $268.5 million in 2017. R&D expense was higher
in the fourth quarter and full year 2018 as compared to the same periods in 2017 primarily because of expenses for our pipeline
programs, including the continued development of bempegaldesleukin in Phase 2 and registrational studies and related manufacturing
costs, costs related to the NKTR-181 New Drug Application and NKTR-181 pre-commercial manufacturing, Phase 1 clinical studies
of NKTR-358, the Phase 1 study of NKTR-262 in combination with bempegaldesleukin and IND-enabling activities for NKTR-255.
and administrative (G&A) expense was $23.8 million in the fourth quarter of 2018 as compared to $12.3 million in the fourth
quarter of 2017. G&A expense for 2018 was $81.4 million as compared to $52.4 million in 2017. G&A expense was higher in
the fourth quarter and full year 2018 as compared to the same periods in 2017 primarily due to an increase in non-cash stock-based
compensation expense.
loss for the fourth quarter of 2018 was $98.2 million or $0.57 basic and diluted loss per share as compared to a net loss of $33.8
million or $0.21 basic and diluted loss per share in the fourth quarter of 2017. Net income for the year ended December 31, 2018
was $681.3 million or $3.78 diluted earnings per share as compared to a net loss of $96.7 million or $0.62 basic and diluted loss
and Year-to-Date Business Highlights
company also announced upcoming presentations and speaking engagements at the following scientific congresses during the first
Clinical Immuno-Oncology Symposium, San Francisco, CA
International Molecular Medicine Tri-Conference, San Francisco, CA
Symposia Cancer Immunotherapy: Mechanistic Insights to Improve Clinical Benefit, Whistler, BC, Canada
Fourth Annual Immuno-Oncology Summit Europe, London, UK
Combinations Summit, Boston, MA
Association for Cancer Research (AACR) Annual Meeting 2019, Atlanta, GA
Annual PEGS Boston Summit, Boston, MA
Immunotherapy of Cancer Conference (ITOC6), Vienna, Austria
Call to Discuss Fourth Quarter and Year-End 2018 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, February 28, 2019. 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/events-and-presentations/events. The web broadcast of the conference
call will be available for replay through Thursday, March 28, 2019.
access the conference call, follow these instructions:
(877) 881-2183 (U.S.); (970) 315-0453 (international)
Passcode: 4988768 (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.
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, autoimmune disease and chronic pain. We leverage our 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 Nektar and its drug development programs and capabilities
may be found online at www.nektar.com.
Note Regarding Forward-Looking Statements
press release contains uncertain or forward-looking statements which can be identified by words such as: "advance,"
"continue," "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 investigational products (including bempegaldesleukin, NKTR-181, NKTR-358, NKTR-262 and NKTR-255), the timing of receiving
a response in connection with our pending new drug application, "NDA" for NKTR-181, 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) the timing of the commencement
or end of clinical studies 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, and enrollment competition; (ii) the timing and probability of regulatory approval, if any, for
NKTR-181 is uncertain and difficult to predict; (iii) scientific discovery of new medical breakthroughs is an inherently uncertain
process and the future success of applying our technology platform to drug candidates (such as bempegaldesleukin, NKTR-262, NKTR-358,
and NKTR-255) is therefore highly uncertain and unpredictable and one or more of these programs may fail; (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 Nektar's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 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.
rINN (recommended International Nonproprietary Name)
Jennifer Ruddock of Nektar Therapeutics
Barreto of Nektar Therapeutics
Jodi Sievers of Nektar Therapeutics
CONSOLIDATED BALANCE SHEETS
| ASSETS | December 31, 2018 | December 31, 2017 (1) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 194,905 | $ | 4,762 | ||||
| Short-term investments | 1,140,445 | 291,370 | ||||||
| Accounts receivable | 43,213 | 5,014 | ||||||
| Inventory | 11,381 | 10,726 | ||||||
| Advance payments to contract manufacturers | 26,450 | 7,155 | ||||||
| Other current assets | 21,293 | 7,793 | ||||||
| Total current assets | 1,437,687 | 326,820 | ||||||
| Long-term investments | 582,889 | 57,088 | ||||||
| Property, plant and equipment, net | 48,851 | 47,463 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 4,244 | 994 | ||||||
| Total assets | $ | 2,150,172 | $ | 508,866 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,854 | $ | 4,782 | ||||
| Accrued compensation | 9,937 | 8,263 | ||||||
| Accrued contract manufacturing expenses | 23,841 | 3,845 | ||||||
| Accrued clinical trial expenses | 14,700 | 9,461 | ||||||
| Other accrued expenses | 9,087 | 6,219 | ||||||
| Interest payable | 4,198 | 4,198 | ||||||
| Deferred revenue, current portion | 13,892 | 18,949 | ||||||
| Other current liabilities | 493 | 446 | ||||||
| Total current liabilities | 82,002 | 56,163 | ||||||
| Senior secured notes, net | 246,950 | 245,207 | ||||||
| Liability related to the sale of future royalties, net | 82,911 | 94,655 | ||||||
| Deferred revenue, less current portion | 10,744 | 19,021 | ||||||
| Other long-term liabilities | 9,990 | 5,992 | ||||||
| Total liabilities | 432,597 | 421,038 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 17 | 15 | ||||||
| Capital in excess of par value | 3,147,925 | 2,207,865 | ||||||
| Accumulated other comprehensive loss | (6,316 | ) | (2,111 | ) | ||||
| Accumulated deficit | (1,424,051 | ) | (2,117,941 | ) | ||||
| Total stockholders' equity | 1,717,575 | 87,828 | ||||||
| Total liabilities and stockholders' equity | $ | 2,150,172 | $ | 508,866 |
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
CONSOLIDATED STATEMENTS OF OPERATIONS
thousands, except per share information)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 4,360 | $ | 7,791 | $ | 20,774 | $ | 32,688 | ||||||||
| Royalty revenue | 12,078 | 9,574 | 41,976 | 33,527 | ||||||||||||
| Non-cash royalty revenue related to sale of future royalties | 8,971 | 9,164 | 33,308 | 30,531 | ||||||||||||
| License, collaboration and other revenue | 14,417 | 68,937 | 1,097,265 | 210,965 | ||||||||||||
| Total revenue | 39,826 | 95,466 | 1,193,323 | 307,711 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 7,461 | 9,753 | 24,412 | 30,547 | ||||||||||||
| Research and development | 108,883 | 81,429 | 399,536 | 268,461 | ||||||||||||
| General and administrative | 23,777 | 12,337 | 81,443 | 52,364 | ||||||||||||
| Impairment of equipment and other costs for terminated program | - | 15,981 | - | 15,981 | ||||||||||||
| Total operating costs and expenses | 140,121 | 119,500 | 505,391 | 367,353 | ||||||||||||
| Income (loss) from operations | (100,295 | ) | (24,034 | ) | 687,932 | (59,642 | ) | |||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest expense | (5,415 | ) | (5,633 | ) | (21,582 | ) | (22,085 | ) | ||||||||
| Non-cash interest expense on liability related to sale of future royalties | (6,388 | ) | (5,334 | ) | (21,196 | ) | (18,869 | ) | ||||||||
| Interest income and other income (expense), net | 12,048 | 1,357 | 37,571 | 4,520 | ||||||||||||
| Total non-operating income (expense), net | 245 | (9,610 | ) | (5,207 | ) | (36,434 | ) | |||||||||
| Income (loss) before provision for income taxes | (100,050 | ) | (33,644 | ) | 682,725 | (96,076 | ) | |||||||||
| Provision (benefit) for income taxes | (1,838 | ) | 182 | 1,412 | 616 | |||||||||||
| Net income (loss) | $ | (98,212 | ) | $ | (33,826 | ) | $ | 681,313 | $ | (96,692 | ) | |||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | (0.57 | ) | $ | (0.21 | ) | $ | 4.02 | $ | (0.62 | ) | |||||
| Diluted | $ | (0.57 | ) | $ | (0.21 | ) | $ | 3.78 | $ | (0.62 | ) | |||||
| Weighted average shares outstanding used in computing net income (loss) per share: | ||||||||||||||||
| Basic | 173,271 | 158,324 | 169,600 | 155,953 | ||||||||||||
| Diluted | 173,271 | 158,324 | 180,119 | 155,953 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 681,313 | $ | (96,692 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Non-cash royalty revenue related to sale of future royalties | (33,308 | ) | (30,531 | ) | ||||
| Non-cash interest expense on liability related to sale of future royalties | 21,196 | 18,869 | ||||||
| Stock-based compensation | 88,101 | 36,615 | ||||||
| Depreciation and amortization | 10,870 | 14,741 | ||||||
| Impairment of equipment from terminated program | - | 15,081 | ||||||
| Accretion of discounts, net and other non-cash transactions | (10,952 | ) | (881 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (25,505 | ) | 10,664 | |||||
| Inventory | (655 | ) | 383 | |||||
| Other assets | (31,652 | ) | (4,800 | ) | ||||
| Accounts payable | 971 | 2,074 | ||||||
| Accrued compensation | 1,674 | (10,017 | ) | |||||
| Other accrued expenses | 27,947 | 7,277 | ||||||
| Deferred revenue | (15,331 | ) | (28,269 | ) | ||||
| Other liabilities | 3,545 | (14,928 | ) | |||||
| Net cash provided by (used in) operating activities | 718,214 | (80,414 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of investments | (2,271,250 | ) | (404,425 | ) | ||||
| Maturities of investments | 890,957 | 347,743 | ||||||
| Sales of investments | 11,963 | 37,549 | ||||||
| Purchases of property, plant and equipment | (14,239 | ) | (9,676 | ) | ||||
| Sales of property and plant | 2,633 | - | ||||||
| Net cash used in investing activities | (1,379,936 | ) | (28,809 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payment of capital lease obligations | - | (5,131 | ) | |||||
| Issuance of common stock | 790,231 | - | ||||||
| Proceeds from shares issued under equity compensation plans | 61,735 | 59,522 | ||||||
| Net cash provided by financing activities | 851,966 | 54,391 | ||||||
| Effect of exchange rates on cash and cash equivalents | (101 | ) | (46 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 190,143 | (54,878 | ) | |||||
| Cash and cash equivalents at beginning of year | 4,762 | 59,640 | ||||||
| Cash and cash equivalents at end of year | $ | 194,905 | $ | 4,762 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 19,471 | $ | 20,116 | ||||
| Cash paid for income taxes | $ | 618 | $ | 556 |