Full Press Release Details
Nektar Therapeutics Reports Fourth Quarter and
Year-End 2021 Financial Results
SAN FRANCISCO, Feb. 28, 2022 /PRNewswire/ -- Nektar Therapeutics (Nasdaq:
NKTR) today reported financial results for the fourth quarter and full year ended December 31, 2021.
Cash and investments in marketable securities at December 31,
2021 were approximately $0.8 billion as compared to $1.2 billion at December 31, 2020.
"We are pleased with the significant progress that Nektar
has made advancing our clinical pipeline in 2021 in the areas of solid tumors, liquid tumors and auto-immune disorders," said Howard
W. Robin, President and CEO of Nektar. "In the first half of 2022, we expect topline results from three of our six registrational
trials evaluating bempegaldesleukin in combination with a checkpoint inhibitor in melanoma, renal cell carcinoma and bladder cancer. We
look forward to collaborating with our partner Bristol Myers to support timely potential regulatory filings for the first three studies
and to complete preparations to support a potential commercial launch."
Mr. Robin continued, "Our second oncology
cytokine program, NKTR-255, a full IL-15 agonist, is being combined with multiple mechanisms in both solid tumors and hematological malignancies
and we are excited that Merck KGaA and Pfizer will evaluate the combination of NKTR-255 with avelumab in the JAVELIN Bladder Medley,
which is expected to start in the first half of 2022. Eli Lilly and Nektar also made significant progress in 2021 and we now have
NKTR-358 in a broad set of clinical trials, including Phase 2 studies in lupus and ulcerative colitis with another planned in atopic
dermatitis and a fourth planned in another auto-immune indication. In December of 2021, Lilly presented the first proof-of-concept data
for NKTR-358 in atopic dermatitis which showed sustained disease control for at least 6 months after last treatment dose and highlighted
the potential for this T regulatory cell stimulating agent to differentiate from standard of care."
Summary of Financial Results
Revenue in the fourth quarter of 2021 was $25.0 million as compared
to $23.5 million in the fourth quarter of 2020. Revenue for the year ended December 31, 2021 was $101.9 million as compared
to $152.9 million in 2020 and was lower due to the recognition of $50.0 million in total milestones from Bristol-Myers Squibb for the
initiation of registrational trials of bempegaldesleukin plus Opdivo in adjuvant melanoma and muscle invasive bladder
Total operating costs and expenses in the fourth quarter of 2021 were
$137.9 million as compared to $134.2 million in the fourth quarter of 2020. The increase was due to an increase in G&A expense.
Total operating costs and expenses for the full year 2021 were $548.0 million as compared to $578.0 million in
2020. Operating costs and expenses for the full year 2021 decreased as compared to 2020 primarily due to the recording of $45.2 million
impairment charge in 2020 resulting from the discontinuation of the NKTR-181 program.
R&D expense in the fourth quarter of 2021 was $99.6 million as
compared to $102.7 million for the fourth quarter of 2020. R&D expense for the year ended December 31, 2021 was $400.3
million as compared to $408.7 million in 2020.
G&A expense was $32.1 million in the fourth quarter of 2021 and $27.1
million in the fourth quarter of 2020. G&A expense for the full year 2021 was $122.8 million compared to $104.7
million in 2020. G&A expense increased primarily due to an increase in pre-commercial costs for bempegaldesleukin.
Net loss for the fourth quarter of 2021 was $145.6 million or
$0.79 basic and diluted loss per share as compared to a net loss of $117.2 million or $0.65 basic and diluted loss
per share in the fourth quarter of 2020. Net loss for the year ended December 31, 2021 was $523.8 million or $2.86 basic and diluted loss
per share as compared to a net loss of $444.4 million or $2.49 basic and diluted loss per share in 2020.
2021 Business Highlights:
Conference Call to Discuss Fourth Quarter and Year-End 2021 Financial
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, Monday, February 28, 2022.
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 March 28, 2022.
To access the conference call, follow these instructions:
Dial: (877) 881-2183 (U.S.); (970) 315-0453 (International)
Conference ID: 8890486 (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 this press release, or explained on the conference call, related information will be made available
on the Investors section of 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, immunology, and virology 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: "will," "may," "design," "potential," "initiate,"
"plan," "advance" and similar references to future periods. Examples of forward-looking statements include,
among others, statements we make regarding the therapeutic potential of, and future development plans for, bempegaldesleukin, NKTR-358
and NKTR-255, the prospects and plans for our collaborations with other companies, and the timing of the initiation of clinical
studies and the data readouts for 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) our statements regarding the therapeutic
potential of bempegaldesleukin, NKTR-358 and NKTR-255 are based on preclinical and clinical findings and observations and are subject
to change as research and development continue; (ii) bempegaldesleukin, 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-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 Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on November 5, 2021. 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
Vivian Wu of Nektar Therapeutics
CONDENSED CONSOLIDATED BALANCE SHEETS
| ASSETS | December 31, 2021 | December 31, 2020 (1) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 25,218 | $ | 198,955 | ||||
| Short-term investments | 708,737 | 862,941 | ||||||
| Accounts receivable | 22,492 | 38,889 | ||||||
| Inventory | 15,801 | 15,292 | ||||||
| Other current assets | 23,333 | 21,928 | ||||||
| Total current assets | 795,581 | 1,138,005 | ||||||
| Long-term investments | 64,828 | 136,662 | ||||||
| Property, plant and equipment, net | 60,510 | 59,662 | ||||||
| Operating lease right-of-use assets | 117,025 | 126,476 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 2,744 | 1,461 | ||||||
| Total assets | $ | 1,117,189 | $ | 1,538,767 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 9,747 | 22,139 | ||||||
| Accrued compensation | 15,735 | 14,532 | ||||||
| Accrued clinical trial expenses | 26,809 | 44,207 | ||||||
| Other accrued expenses | 15,468 | 20,986 | ||||||
| Operating lease liabilities, current portion | 17,441 | 13,915 | ||||||
| Total current liabilities | 85,200 | 115,779 | ||||||
| Operating lease liabilities, less current portion | 125,736 | 136,373 | ||||||
| Development derivative liability | 27,726 | - | ||||||
| Liabilities related to the sales of future royalties, net | 195,427 | 200,340 | ||||||
| Other long-term liabilities | 3,592 | 8,980 | ||||||
| Total liabilities | 437,681 | 461,472 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 19 | 18 | ||||||
| Capital in excess of par value | 3,516,641 | 3,388,730 | ||||||
| Accumulated other comprehensive loss | (4,157 | ) | (2,295 | ) | ||||
| Accumulated deficit | (2,832,995 | ) | (2,309,158 | ) | ||||
| Total stockholders' equity | 679,508 | 1,077,295 | ||||||
| Total liabilities and stockholders' equity | $ | 1,117,189 | $ | 1,538,767 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 5,890 | $ | 2,884 | $ | 23,725 | $ | 17,504 | ||||||||
| Royalty revenue | - | (412 | ) | - | 30,999 | |||||||||||
| Non-cash royalty revenue related to the sales of future royalties | 19,079 | 20,562 | 77,746 | 48,563 | ||||||||||||
| License, collaboration and other revenue | 40 | 428 | 436 | 55,849 | ||||||||||||
| Total revenue | 25,009 | 23,462 | 101,907 | 152,915 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 6,163 | 4,323 | 24,897 | 19,477 | ||||||||||||
| Research and development | 99,614 | 102,724 | 400,269 | 408,678 | ||||||||||||
| General and administrative | 32,142 | 27,136 | 122,844 | 104,682 | ||||||||||||
| Impairment of assets and other costs for terminated program | - | - | - | 45,189 | ||||||||||||
| Total operating costs and expenses | 137,919 | 134,183 | 548,010 | 578,026 | ||||||||||||
| Loss from operations | (112,910 | ) | (110,721 | ) | (446,103 | ) | (425,111 | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Change in fair value of development derivative liability | (383 | ) | - | (8,023 | ) | - | ||||||||||
| Non-cash interest expense on liabilities related to the sales of future royalties | (8,127 | ) | (8,183 | ) | (47,313 | ) | (30,267 | ) | ||||||||
| Loss on revaluation of liability related to the sale of future royalties | (24,410 | ) | - | (24,410 | ) | - | ||||||||||
| Interest income and other income (expense), net | 181 | 1,829 | 2,569 | 18,282 | ||||||||||||
| Interest expense | - | - | - | (6,851 | ) | |||||||||||
| Total non-operating expense, net | (32,739 | ) | (6,354 | ) | (77,177 | ) | (18,836 | ) | ||||||||
| Loss before provision for income taxes | (145,649 | ) | (117,075 | ) | (523,280 | ) | (443,947 | ) | ||||||||
| Provision for income taxes | (4 | ) | 128 | 557 | 493 | |||||||||||
| Net loss | $ | (145,645 | ) | $ | (117,203 | ) | $ | (523,837 | ) | $ | (444,440 | ) | ||||
| Basic and diluted net loss per share | $ | (0.79 | ) | $ | (0.65 | ) | $ | (2.86 | ) | $ | (2.49 | ) | ||||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 184,964 | 179,684 | 183,298 | 178,581 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (523,837 | ) | $ | (444,440 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash royalty revenue related to the sales of future royalties | (77,746 | ) | (48,563 | ) | ||||
| Non-cash interest expense on liabilities related to the sales of future royalties | 47,313 | 30,267 | ||||||
| Loss on revaluation of liability related to the sale of future royalties | 24,410 | - | ||||||
| Change in fair value of development derivative liability | 8,023 | - | ||||||
| Non-cash research and development expense | 16,703 | - | ||||||
| Stock-based compensation | 94,674 | 94,261 | ||||||
| Depreciation and amortization | 14,146 | 14,182 | ||||||
| Impairment of advance payments to contract manufacturers and equipment for terminated program | - | 20,351 | ||||||
| Amortization of premiums (discounts), net and other non-cash transactions | 6,730 | 3,943 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 12,397 | 1,913 | ||||||
| Inventory | (509 | ) | (2,627 | ) | ||||
| Operating leases, net | 2,340 | 2,743 | ||||||
| Other assets | (2,688 | ) | 4,476 | |||||
| Accounts payable | (11,690 | ) | 2,382 | |||||
| Accrued compensation | 1,203 | 4,697 | ||||||
| Other accrued expenses | (23,524 | ) | 8,644 | |||||
| Deferred revenue | (605 | ) | (5,516 | ) | ||||
| Net cash used in operating activities | (412,660 | ) | (313,287 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of investments | (960,689 | ) | (987,533 | ) | ||||
| Maturities of investments | 1,166,951 | 1,449,304 | ||||||
| Sales of investments | 11,504 | 41,700 | ||||||
| Purchases of property, plant and equipment | (14,989 | ) | (7,258 | ) | ||||
| Net cash provided by investing activities | 202,777 | 496,213 | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from sale of future royalties, net of $3.8 million of transaction costs | - | 146,250 | ||||||
| Repayment of senior notes | - | (250,000 | ) | |||||
| Cash receipts from development derivative liability | 3,000 | - | ||||||
| Proceeds from shares issued under equity compensation plans | 33,238 | 23,396 | ||||||
| Net cash provided by (used in) financing activities | 36,238 | (80,354 | ) | |||||
| Effect of foreign exchange rates on cash and cash equivalents | (92 | ) | 20 | |||||
| Net increase (decrease) in cash and cash equivalents | (173,737 | ) | 102,592 | |||||
| Cash and cash equivalents at beginning of year | 198,955 | 96,363 | ||||||
| Cash and cash equivalents at end of year | $ | 25,218 | $ | 198,955 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | - | $ | 9,742 | ||||
| Cash paid for income taxes | $ | 325 | $ | 539 | ||||
| Operating lease right-of-use assets recognized in exchange for lease liabilities | $ | 1,057 | $ | 2,133 | ||||
| Accounts receivable recognized in exchange for long-term liabilities | $ | - | $ | 4,000 |