Full Press Release Details
Nektar Therapeutics Reports Third Quarter 2021
SAN FRANCISCO, November 4, 2021 -- Nektar Therapeutics (Nasdaq:
NKTR) today reported financial results for the third quarter ended September 30, 2021.
Cash and investments in marketable securities at September 30, 2021
were approximately $955.3 million as compared to $1.2 billion at December 31, 2020.
"We made significant progress across
our portfolio this past quarter ahead of multiple late-stage registrational trial data readouts anticipated in the first half of
2022," said Howard W. Robin, President and CEO of Nektar. "For bempegaldesleukin, we remain on track to report data from
the first three of our five registrational studies with nivolumab in melanoma, renal cell carcinoma and bladder cancer in the first
half of 2022. We also plan to present initial data from our PROPEL study evaluating the combination of bempegaldesleukin plus
pembrolizumab in patients with previously untreated metastatic non-small cell lung cancer at the upcoming ESMO Immuno-Oncology
Mr. Robin continued, "At the upcoming
SITC and ASH meetings in the fourth quarter, we look forward to showcasing our IL-15 program, NKTR-255, which is being developed in
solid tumors and hematological malignancies. We recently expanded the development plans for NKTR-255 with a new clinical
collaboration with Merck KGaA and Pfizer designed to evaluate the combination of NKTR-255 with avelumab, a PD-L1 inhibitor, in the
JAVELIN Bladder Medley study. Importantly, our partner Eli Lilly continues to advance a broad development program for NKTR-358,
demonstrating its potential to be transformative in the treatment of autoimmune disease, with ongoing Phase 2 studies in both lupus
and ulcerative colitis and plans to initiate additional Phase 2 studies in two different immune-mediated diseases."
Summary of Financial Results
Revenue in the third quarter of 2021 was $24.9 million as compared
to $30.0 million in the third quarter of 2020. In the first nine months of
2021 revenue was $76.9 million as compared to $129.5 million for the first nine months of 2020. Revenue was lower
relative to 2020 due to the recognition in the first nine months of 2020 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
Total operating costs and expenses in the third quarter of 2021 were
$138.5 million as compared to $133.1 million in the third quarter of 2020. The increase was due to increases in research and development
(R&D) expense and general and administrative (G&A) expense. Total operating costs and expenses in the first nine months of 2021
were $410.1 million as compared to $443.8 million in the first nine months of 2020. Operating costs and expenses
decreased relative to 2020 primarily due to the recording of $45.2 million in impairment charges in the first quarter of 2020 resulting
from the discontinuation of the NKTR-181 program.
R&D expense in the third quarter of 2021 was $103.7 million as
compared to $100.5 million for the third quarter of 2020. For the first nine months of 2021, R&D expense was $300.7
million as compared to $306.0 million in the first nine months of 2020.
G&A expense was $29.5 million in the third quarter of 2021 and $27.0
million in the third quarter of 2020. For the first nine months of 2021, G&A expense was $90.7 million compared to $77.6
million in the first nine months of 2020. G&A expense increased primarily due to an increase in pre-commercial costs for bempegaldesleukin.
Net loss for the third quarter of 2021 was $129.7 million or $0.70
basic and diluted loss per share as compared to a net loss of $108.6 million or $0.61 basic and diluted loss per share
in the third quarter of 2020. Net loss in the first nine months of 2021 was $378.2 million or $2.07 basic and diluted loss per share as
compared to a net loss of $327.2 million or $1.84 basic and diluted loss per share in the first nine months of 2020.
Nektar also announced upcoming presentations at the following scientific
The Society for Immunotherapy
of Cancer (SITC) Annual Meeting
November 10-14, 2021 (In person and virtual)
ESMO Immuno-Oncology Congress 2021
December 8-11, 2021 (In person and virtual)
2021 American Society of Hematology (ASH) Annual Meeting
December 11-14, 2021 (In person and virtual)
Conference Call to Discuss Third Quarter 2021 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, Thursday, November 4, 2021.
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 December 2, 2021.
To access the conference call, follow these instructions:
Dial: (877) 881-2183 (U.S.); (970) 315-0453 (International)
Conference ID: 8264398 (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," "continue," "remain" 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 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 August 6, 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
| September 30, 2021 | December 31, 2020 (1) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 54,017 | $ | 198,955 | ||||
| Short-term investments | 867,063 | 862,941 | ||||||
| Accounts receivable | 28,994 | 38,889 | ||||||
| Inventory | 15,330 | 15,292 | ||||||
| Other current assets | 20,731 | 21,928 | ||||||
| Total current assets | 986,135 | 1,138,005 | ||||||
| Long-term investments | 34,219 | 136,662 | ||||||
| Property, plant and equipment, net | 58,830 | 59,662 | ||||||
| Operating lease right-of-use assets | 119,714 | 126,476 | ||||||
| Goodwill | 76,501 | 76,501 | ||||||
| Other assets | 1,844 | 1,461 | ||||||
| Total assets | $ | 1,277,243 | $ | 1,538,767 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 23,660 | 22,139 | ||||||
| Accrued compensation | 32,882 | 14,532 | ||||||
| Accrued clinical trial expenses | 37,633 | 44,207 | ||||||
| Accrued contract manufacturing expenses | 8,088 | 11,310 | ||||||
| Other accrued expenses | 19,966 | 9,676 | ||||||
| Operating lease liabilities, current portion | 17,740 | 13,915 | ||||||
| Total current liabilities | 139,969 | 115,779 | ||||||
| Operating lease liabilities, less current portion | 128,718 | 136,373 | ||||||
| Development derivative liability | 21,387 | - | ||||||
| Liabilities related to the sales of future royalties, net | 181,760 | 200,340 | ||||||
| Other long-term liabilities | 3,869 | 8,980 | ||||||
| Total liabilities | 475,703 | 461,472 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 18 | 18 | ||||||
| Capital in excess of par value | 3,492,435 | 3,388,730 | ||||||
| Accumulated other comprehensive loss | (3,563 | ) | (2,295 | ) | ||||
| Accumulated deficit | (2,687,350 | ) | (2,309,158 | ) | ||||
| Total stockholders' equity | 801,540 | 1,077,295 | ||||||
| Total liabilities and stockholders' equity | $ | 1,277,243 | $ | 1,538,767 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 5,194 | $ | 5,691 | $ | 17,835 | $ | 14,620 | ||||||||
| Royalty revenue | - | 12,289 | - | 31,411 | ||||||||||||
| Non-cash royalty revenue related to sales of future royalties | 19,413 | 10,422 | 58,667 | 28,001 | ||||||||||||
| License, collaboration and other revenue | 314 | 1,631 | 396 | 55,421 | ||||||||||||
| Total revenue | 24,921 | 30,033 | 76,898 | 129,453 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 5,311 | 5,570 | 18,734 | 15,154 | ||||||||||||
| Research and development | 103,738 | 100,531 | 300,655 | 305,954 | ||||||||||||
| General and administrative | 29,468 | 26,982 | 90,702 | 77,546 | ||||||||||||
| Impairment of assets and other costs for terminated program | - | - | - | 45,189 | ||||||||||||
| Total operating costs and expenses | 138,517 | 133,083 | 410,091 | 443,843 | ||||||||||||
| Loss from operations | (113,596 | ) | (103,050 | ) | (333,193 | ) | (314,390 | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Non-cash interest expense on liabilities related to sales of future royalties | (12,801 | ) | (8,425 | ) | (39,186 | ) | (22,084 | ) | ||||||||
| Change in fair value of development derivative liability | (3,328 | ) | - | (7,640 | ) | - | ||||||||||
| Interest income and other income (expense), net | 131 | 2,910 | 2,388 | 16,453 | ||||||||||||
| Interest expense | - | - | - | (6,851 | ) | |||||||||||
| Total non-operating income (expense), net | (15,998 | ) | (5,515 | ) | (44,438 | ) | (12,482 | ) | ||||||||
| Loss before provision for income taxes | (129,594 | ) | (108,565 | ) | (377,631 | ) | (326,872 | ) | ||||||||
| Provision for income taxes | 112 | 21 | 561 | 365 | ||||||||||||
| Net loss | $ | (129,706 | ) | $ | (108,586 | ) | $ | (378,192 | ) | $ | (327,237 | ) | ||||
| Basic and diluted net loss per share | $ | (0.70 | ) | $ | (0.61 | ) | $ | (2.07 | ) | $ | (1.84 | ) | ||||
| Weighted average shares outstanding used in computing basic and diluted net loss per share | 184,110 | 179,090 | 182,736 | 178,203 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine months ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (378,192 | ) | $ | (327,237 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non-cash royalty revenue related to sales of future royalties | (58,667 | ) | (28,001 | ) | ||||
| Non-cash interest expense on liabilities related to sales of future royalties | 39,186 | 22,084 | ||||||
| Change in fair value of development derivative liability | 7,640 | - | ||||||
| Non-cash research and development expense | 11,497 | - | ||||||
| Stock-based compensation | 72,269 | 72,274 | ||||||
| Depreciation and amortization | 10,710 | 10,937 | ||||||
| Impairment of advance payments to contract manufacturers and equipment for terminated program | - | 20,351 | ||||||
| Amortization of premiums (discounts), net and other non-cash transactions | 5,677 | 1,150 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 9,895 | (6,123 | ) | |||||
| Inventory | (38 | ) | (227 | ) | ||||
| Operating leases, net | 2,932 | 4,316 | ||||||
| Other assets | 814 | (5,588 | ) | |||||
| Accounts payable | 1,247 | (3,337 | ) | |||||
| Accrued compensation | 18,350 | 20,478 | ||||||
| Other accrued expenses | (3,837 | ) | 9,340 | |||||
| Deferred revenue | (605 | ) | (5,070 | ) | ||||
| Net cash used in operating activities | (261,122 | ) | (214,653 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of investments | (816,049 | ) | (791,445 | ) | ||||
| Maturities of investments | 902,687 | 1,158,722 | ||||||
| Sales of investments | 5,035 | 41,700 | ||||||
| Purchases of property, plant and equipment | (9,093 | ) | (5,504 | ) | ||||
| Net cash provided by investing activities | 82,580 | 403,473 | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from shares issued under equity compensation plans | 31,436 | 20,651 | ||||||
| Cash receipts from development derivative liability | 2,250 | - | ||||||
| Repayment of senior notes | - | (250,000 | ) | |||||
| Net cash provided by (used in) financing activities | 33,686 | (229,349 | ) | |||||
| Effect of foreign exchange rates on cash and cash equivalents | (82 | ) | 9 | |||||
| Net decrease in cash and cash equivalents | (144,938 | ) | (40,520 | ) | ||||
| Cash and cash equivalents at beginning of period | 198,955 | 96,363 | ||||||
| Cash and cash equivalents at end of period | $ | 54,017 | $ | 55,843 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | - | $ | 9,742 | ||||
| Operating lease right-of-use asset recognized in exchange for lease liabilities | $ | 1,057 | $ | 2,133 |