Full Press Release Details
Nektar Therapeutics Reports Third Quarter
2020 Financial Results
SAN FRANCISCO, November 5, 2020 -- Nektar Therapeutics
(NASDAQ: NKTR) today reported financial results for the third quarter ended September 30, 2020.
Cash and investments in marketable securities at September 30,
2020 were approximately $1.2 billion as compared to $1.6 billion at December 31, 2019.
"In Q3, we've continued to successfully advance our
late-stage registrational and early stage studies for our immune-oncology pipeline of candidates while navigating challenges in
the current COVID-19 environment," said Howard W. Robin, President and CEO of Nektar. "Enrollment in our five registrational
trials of bempegaldesleukin in combination with nivolumab is going well and our partner BMS recently initiated a new clinical study
in renal cell carcinoma to evaluate the doublet therapy with a TKI agent. We are also pleased to report that we are ahead of our
enrollment targets for the Phase 2 PROPEL study of bempegaldesleukin with pembrolizumab in patients with metastatic non-small cell
lung cancer and we look forward to sharing the initial data from this important study in the first part of 2021."
"Next week's 2020 SITC meeting will feature data
presentations that showcase the strength of Nektar's immune-oncology pipeline, including an oral presentation of 2 1/2 year
data for metastatic melanoma patients treated with bempegaldesleukin plus nivolumab, and promising early data for NKTR-255, our
IL-15 cytokine, as well as NKTR-262, our TLR agonist program," continued Robin. "In immunology, we presented positive
new data at ACR 2020 this week highlighting the disease activity observed in lupus patients with NKTR-358, our T regulatory cell
agent. We are exceptionally pleased that our partner Lilly is undertaking a broad clinical development program for NKTR-358 with
two Phase 1b studies in atopic dermatitis and psoriasis, a Phase 2 study underway in patients with systemic lupus erythematosus
and a new Phase 2 study being planned in ulcerative colitis."
Summary of Q3 2020 Financial Results
Revenue in the third quarter of 2020 was $30.0 million compared
to $29.2 million in the third quarter of 2019. Year-to-date revenue for 2020 was $129.5 million compared to $80.8 million for the
first nine months of 2019. Revenue was higher due to the recognition of $50.0 million in total milestones from Bristol-Myers Squibb
related to the start of two new registrational trials of bempegaldesleukin plus Opdivo in adjuvant melanoma and muscle-invasive
Total operating costs and expenses in the third quarter of 2020
were $133.1 million compared to $128.0 million in the third quarter of 2019. Total operating costs and expenses in the first nine
months of 2020 were $443.8 million compared to $411.2 million in the first nine months of 2019. Year-to-date operating costs and
expenses increased primarily as a result of $45.2 million in impairment charges in the first quarter of 2020 resulting from the
discontinuation of the NKTR-181 program, partially offset by a decrease in R&D expense.
R&D expense in the third quarter of 2020 was $100.5 million
compared to $99.0 million for the third quarter of 2019. For the first nine months of 2020, R&D expense was $306.0 million
compared to $324.2 million in the first nine months of 2019. Excluding pre-commercial manufacturing costs for NKTR-181 incurred
during 2019, research and development expense increased for the third quarter and the first nine months of 2020 primarily due to
increases in clinical development costs, partially offset by a decrease in manufacturing costs for clinical trial materials.
Net loss for the third quarter of 2020 was $108.6 million or
$0.61 basic and diluted loss per share compared to a net loss of $98.6 million or $0.56 basic and diluted loss per share in the
third quarter of 2019. Net loss in the first nine months of 2020 was $327.2 million or $1.84 basic and diluted loss per share compared
to a net loss of $328.5 million or $1.88 basic and diluted loss per share in the first nine months of 2019.
Third Quarter 2020 and Recent Business Highlights
company also announced upcoming presentations at the following scientific congress:
Society for Immunotherapy of Cancer (SITC) Annual Meeting:
Call to Discuss Third Quarter Financial Results
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, November 5, 2020.
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 Tuesday, December 1, 2020.
access the conference call, follow these instructions:
(877) 881-2183 (U.S.); (970) 315-0453 (international)
ID: 5192707 (Nektar Therapeutics is the host)
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.
Note Regarding Forward-Looking Statements
press release contains forward-looking statements which can be identified by words such as: "may," "design,"
"potential," "evaluate," "plan," "will," 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, our clinical drug candidates, and the timing of the initiation of clinical studies for clinical 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
in patients who have been diagnosed with COVID-19 infection are based on data that is evolving and do not include clinical testing
of bempegaldesleukin for this intended patient population, and there is no guarantee that the clinical evaluation of bempegaldesleukin
in COVID-19 patients will support the use of bempegaldesleukin in this patient population; (ii) our clinical drug candidates are
investigational agents and continued research and development for these drug candidates are subject to substantial risks, including
negative safety and efficacy findings in ongoing clinical studies (notwithstanding positive findings in earlier preclinical and
clinical studies); (iii) as our clinical drug candidates are currently in development, the risk of failure is high and failure
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 August 7, 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.
Isaacson of Nektar Therapeutics
Vivian Wu of Nektar Therapeutics
is a registered trademark of Bristol-Myers Squibb Company.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2020 | December 31, 2019 (1) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 55,843 | $ | 96,363 | ||||
| Short-term investments | 900,163 | 1,228,499 | ||||||
| Accounts receivable | 42,925 | 36,802 | ||||||
| Inventory | 12,892 | 12,665 | ||||||
| Advance payments to contract manufacturers | 10,483 | 31,834 | ||||||
| Other current assets | 21,550 | 15,387 | ||||||
| Total current assets | 1,043,856 | 1,421,550 | ||||||
| Long-term investments | 197,715 | 279,119 | ||||||
| Property, plant and equipment, net | 60,189 | 65,665 | ||||||
| Operating lease right-of-use assets | 128,985 | 134,177 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 1,420 | 344 | ||||||
| Total assets | $ | 1,508,666 | $ | 1,977,356 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Senior secured notes, net and interest payable | $ | - | $ | 252,891 | ||||
| Accounts payable | 15,484 | 19,234 | ||||||
| Accrued compensation | 29,504 | 11,467 | ||||||
| Accrued clinical trial expenses | 48,886 | 32,626 | ||||||
| Accrued contract manufacturing expenses | 7,141 | 7,304 | ||||||
| Other accrued expenses | 9,630 | 12,338 | ||||||
| Operating lease liabilities, current portion | 15,348 | 12,516 | ||||||
| Deferred revenue, current portion | 507 | 5,517 | ||||||
| Total current liabilities | 126,500 | 353,893 | ||||||
| Operating lease liabilities, less current portion | 139,022 | 142,730 | ||||||
| Liability related to the sale of future royalties, net | 66,378 | 72,020 | ||||||
| Deferred revenue, less current portion | 2,494 | 2,554 | ||||||
| Other long-term liabilities | 3,291 | 768 | ||||||
| Total liabilities | 337,685 | 571,965 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 18 | 17 | ||||||
| Capital in excess of par value | 3,363,998 | 3,271,097 | ||||||
| Accumulated other comprehensive income (loss) | (1,080 | ) | (1,005 | ) | ||||
| Accumulated deficit | (2,191,955 | ) | (1,864,718 | ) | ||||
| Total stockholders' equity | 1,170,981 | 1,405,391 | ||||||
| Total liabilities and stockholders' equity | $ | 1,508,666 | $ | 1,977,356 |
CONDENSED CONSOLIDATED STATEMENTS OF
(In thousands, except per share information)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 5,691 | $ | 5,558 | $ | 14,620 | $ | 14,302 | ||||||||
| Royalty revenue | 12,289 | 10,275 | 31,411 | 29,008 | ||||||||||||
| Non-cash royalty revenue related to sale of future royalties | 10,422 | 10,264 | 28,001 | 27,585 | ||||||||||||
| License, collaboration and other revenue | 1,631 | 3,121 | 55,421 | 9,860 | ||||||||||||
| Total revenue | 30,033 | 29,218 | 129,453 | 80,755 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 5,570 | 4,927 | 15,154 | 15,385 | ||||||||||||
| Research and development | 100,531 | 99,048 | 305,954 | 324,197 | ||||||||||||
| General and administrative | 26,982 | 23,983 | 77,546 | 71,570 | ||||||||||||
| Impairment of assets and other costs for terminated program | - | - | 45,189 | - | ||||||||||||
| Total operating costs and expenses | 133,083 | 127,958 | 443,843 | 411,152 | ||||||||||||
| Loss from operations | (103,050 | ) | (98,740 | ) | (314,390 | ) | (330,397 | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest expense | - | (5,425 | ) | (6,851 | ) | (15,882 | ) | |||||||||
| Non-cash interest expense on liability related to sale of future royalties | (8,425 | ) | (5,813 | ) | (22,084 | ) | (17,853 | ) | ||||||||
| Interest income and other income (expense), net | 2,910 | 11,492 | 16,453 | 35,964 | ||||||||||||
| Total non-operating income (expense), net | (5,515 | ) | 254 | (12,482 | ) | 2,229 | ||||||||||
| Loss before provision for income taxes | (108,565 | ) | (98,486 | ) | (326,872 | ) | (328,168 | ) | ||||||||
| Provision for income taxes | 21 | 99 | 365 | 335 | ||||||||||||
| Net loss | $ | (108,586 | ) | $ | (98,585 | ) | $ | (327,237 | ) | $ | (328,503 | ) | ||||
| Basic and diluted net loss per share | $ | (0.61 | ) | $ | (0.56 | ) | $ | (1.84 | ) | $ | (1.88 | ) | ||||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 179,090 | 175,402 | 178,203 | 174,609 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine months ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (327,237 | ) | $ | (328,503 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash royalty revenue related to sale of future royalties | (28,001 | ) | (27,585 | ) | ||||
| Non-cash interest expense on liability related to sale of future royalties | 22,084 | 17,853 | ||||||
| Stock-based compensation | 72,274 | 74,787 | ||||||
| Depreciation and amortization | 10,937 | 9,582 | ||||||
| Impairment of advance payments to contract manufacturers and equipment for terminated program | 20,351 | - | ||||||
| Accretion of premiums (discounts), net and other non-cash transactions | 1,150 | (9,147 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (6,123 | ) | 2,008 | |||||
| Inventory | (227 | ) | (2,339 | ) | ||||
| Operating leases, net | 4,316 | 11,550 | ||||||
| Other assets | (5,588 | ) | 18,127 | |||||
| Accounts payable | (3,337 | ) | 16,109 | |||||
| Accrued compensation | 20,478 | 13,164 | ||||||
| Other accrued expenses | 9,340 | 10,401 | ||||||
| Deferred revenue | (5,070 | ) | (9,465 | ) | ||||
| Net cash used in operating activities | (214,653 | ) | (203,458 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of investments | (791,445 | ) | (1,028,883 | ) | ||||
| Maturities of investments | 1,158,722 | 1,122,902 | ||||||
| Sales of investments | 41,700 | - | ||||||
| Purchases of property, plant and equipment | (5,504 | ) | (22,614 | ) | ||||
| Net cash provided by investing activities | 403,473 | 71,405 | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from shares issued under equity compensation plans | 20,651 | 18,449 | ||||||
| Repayment of senior notes | (250,000 | ) | - | |||||
| Net cash provided by (used in) financing activities | (229,349 | ) | 18,449 | |||||
| Effect of foreign exchange rates on cash and cash equivalents | 9 | (77 | ) | |||||
| Net decrease in cash and cash equivalents | (40,520 | ) | (113,681 | ) | ||||
| Cash and cash equivalents at beginning of period | 96,363 | 194,905 | ||||||
| Cash and cash equivalents at end of period | $ | 55,843 | $ | 81,224 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | 9,742 | $ | 14,299 | ||||
| Operating lease right-of-use asset recognized in exchange for lease liabilities | $ | 2,133 | $ | 56,025 |