Nektar Therapeutics Reports Fourth Quarter and Year End 2010 Financial Results

Mar 01, 2011, 16:15 ET from Nektar Therapeutics

SAN FRANCISCO, March 1, 2011 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the fourth quarter and year ended December 31, 2010.

Cash, cash equivalents, and short-term investments at December 31, 2010 were $315.9 million.  The cash balance at December 31, 2010 does not include proceeds of $220.4 million received from the completion of a public equity offering in January 2011.  

Revenue for the fourth quarter of 2010 increased to $45.3 million as compared to $39.0 million in the fourth quarter of 2009.  Revenue for the full year 2010 increased to $159.0 million as compared to $71.9 million for the full year 2009.  The increase in revenue year over year is the result of amortization of a $125.0 million milestone payment received from AstraZeneca in September 2009 under the partnership agreement for NKTR-118.  

Total operating costs and expenses in the fourth quarter of 2010 were $65.9 million compared to $44.5 million in the fourth quarter 2009.  The increase in total operating costs and expenses in fourth quarter 2010 was primarily due to increased research and development expenses and a non-cash facilities impairment charge of $12.6 million.

Research and development expenses increased to $31.5 million in the fourth quarter of 2010 as compared to $24.7 million for the same quarter in 2009.  For the full year 2010, research and development expenses increased to $108.1 million as compared to $95.1 million in 2009.  General and administrative expense was $11.6 million in the fourth quarter 2010 as compared to $11.0 million in the fourth quarter of 2009.  For the full year 2010, general and administrative expense was flat year-over-year at $41.0 million.

"2010 was a year of great advancement for Nektar,” said Howard W. Robin, President and Chief Executive Officer of Nektar.  “Our lead oncology program, NKTR-102, demonstrated positive results in Phase 2 studies in both ovarian and breast cancers, and we plan to move into Phase 3 in 2011.  NKTR-118, partnered with AstraZeneca, and NKTR-061, partnered with Bayer, are both planned to move into Phase 3 this year as well.  Lastly, Nektar’s research pipeline is on track to deliver one new clinical candidate each year, and we are looking forward to starting Phase 1 clinical studies of NKTR-181, our novel opioid analgesic, this month."

Net loss for the fourth quarter ended December 31, 2010 was $22.6 million or $0.24 per share, as compared to a net loss of $7.7 million or $0.08 per share in the fourth quarter of 2009.  The fourth quarter 2010 net loss includes a non-cash impairment charge of $12.6 million, or $0.13 per share, for the write-down related to the move to Nektar’s new San Francisco, California Mission Bay R&D center from its San Carlos facility.  Net loss for the full year 2010 improved to $37.9 million, or $0.40 per share, as compared to a net loss of $102.5 million, or $1.11 per share, in 2009.  

Conference Call to Discuss Fourth Quarter and Year End 2010 Financial Results

A conference call to review the financial results will be held today, Tuesday, March 1, 2011 at 2 PM Pacific Time/5 PM Eastern time.  

Details are below:

The 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 Investor Relations section of the Nektar website: http://www.nektar.com.

   To access the conference call, follow these instructions:

Dial: 1-866-713-8307; 617-597-5307 (international)

Passcode: 79375407 (Nektar Therapeutics is the host)

An audio replay will also be available shortly following the call through Tuesday, March 29, 2011 and can be accessed by dialing (888) 286-8010 (U.S.); or (617) 801-6888 (international) with a passcode of 10590598.

In 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 Investor Relations page at the Nektar website as soon as practical after the conclusion of the conference call.

About Nektar

Nektar Therapeutics is a biopharmaceutical company developing novel therapeutics based on its PEGylation and advanced polymer conjugation technology platforms. Nektar has a robust R&D pipeline of potentially high-value therapeutics in oncology, pain and other areas. In the area of pain, Nektar has an exclusive worldwide license agreement with AstraZeneca for Nektar's oral NKTR-118 late-stage development program to treat opioid-induced constipation and its NKTR-119 earlier stage development program for the treatment of pain without constipation side effects.  NKTR-181, a novel mu-opioid analgesic molecule, is scheduled to enter Phase 1 clinical studies in the first part of 2011.  In oncology, NKTR-102, a novel topoisomerase I-inhibitor, is being evaluated in Phase 2 clinical studies for the treatment of breast, ovarian and colorectal cancers. NKTR-105, a novel anti-mitotic agent, is in a Phase 1 clinical study in cancer patients with refractory solid tumors.

Nektar's technology has enabled seven approved products in the U.S. or Europe through partnerships with leading biopharmaceutical companies, including UCB's Cimzia(R) for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS(R) for hepatitis C and Amgen's Neulasta(R) for neutropenia.

Nektar is headquartered in San Francisco, California, with additional R&D 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.

This press release contains forward-looking statements that reflect management's current views regarding the value and potential of Nektar's drug candidate pipeline and the plan to move new drug candidates into clinical development, the planned start of the Phase 3 programs for NKTR-118 and Amikacin Inhale, and the timing of the commencement of the Phase 1 clinical trial for NKTR-181.  These forward-looking statements involve numerous risks and uncertainties, including but not limited to: (i) Nektar's product candidates and those of its collaboration partners 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 for numerous reasons including safety and efficacy findings even after positive findings in preclinical and clinical studies; (ii) the timing of the commencement or end of clinical trials and the successful commercial launch of our drug candidates may be delayed or unsuccessful due to slower than anticipated patient enrollment, manufacturing challenges, changing standards of care, regulatory delay, 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; (iii) scientific discovery of new medical breakthroughs is an inherently uncertain process and the future success of the application of Nektar's technology platform to potential new drug candidates is therefore highly uncertain and unpredictable and one or more research and development programs could fail; (iv) Nektar's patent applications for its proprietary or partner product candidates may not issue, patents that have issued may not be enforceable, or additional intellectual property licenses from third parties may be required in the future; (v) the outcome of any future intellectual property or other litigation related to Nektar's proprietary product candidates or complex commercial agreements; and (vi) certain other important risks and uncertainties set forth in Nektar's Annual Report on Form 10-K and Current Report on Form 8-K filed with the Securities and Exchange Commission on March 1, 2011.  Actual results could differ materially from the forward-looking statements contained in this press release.  Nektar undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.

Nektar Investor Inquiries:

Jennifer Ruddock/Nektar Therapeutics

(415) 482-5585

Susan Noonan/SA Noonan Communications, LLC

(212) 966-3650

Nektar Media Inquiries:

Karen Bergman/BCC Partners

(650) 575-1509

Michelle Corral/BCC Partners

(415) 794-8662

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ASSETS

December 31, 2010

December 31, 2009

(1)

Current assets:

Cash and cash equivalents

$                 17,755

$                 49,597

Short-term investments

298,177

346,614

Accounts receivable

25,102

4,801

Inventory

7,266

6,471

Other current assets

5,679

6,183

Total current assets

353,979

413,666

Property and equipment, net

89,773

78,263

Goodwill

76,501

76,501

Other assets

972

7,088

Total  assets

$               521,225

$               575,518

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                   7,194

$                   3,066

Accrued compensation

9,252

10,052

Accrued expenses

8,540

4,354

Accrued clinical trial expenses

12,144

14,167

Deferred revenue, current portion

20,584

115,563

Other current liabilities

6,394

5,814

Total current liabilities

64,108

153,016

Convertible subordinated notes

214,955

214,955

Capital lease obligations

17,014

18,800

Deferred revenue

124,763

76,809

Deferred gain

4,152

5,027

Other long-term liabilities

5,571

4,544

Total liabilities

430,563

473,151

Commitments and contingencies

Stockholders' equity:

Preferred stock

-

-

Common stock

9

9

Capital in excess of par value

1,354,232

1,327,942

Accumulated other comprehensive income

968

1,025

Accumulated deficit

(1,264,547)

(1,226,609)

Total stockholders' equity

90,662

102,367

Total liabilities and stockholders' equity

$               521,225

$               575,518

(1) The consolidated balance sheet at December 31, 2009 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.

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share information)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2010

2009

2010

2009

Revenue:

Product sales and royalties

$  12,699

$ 10,832

$  34,667

$    35,288

License, collaboration and other

32,615

28,177

124,372

36,643

Total revenue

45,314

39,009

159,039

71,931

Operating costs and expenses:

Cost of goods sold

10,237

8,809

25,667

30,948

Research and development

31,455

24,713

108,065

95,109

General and administrative

11,585

10,982

40,986

41,006

Impairment of long-lived assets

12,576

-

12,576

-

Total operating costs and expenses

65,853

44,504

187,294

167,063

Loss from operations

(20,539)

(5,495)

(28,255)

(95,132)

Non-operating income (expense):

Interest income

320

528

1,545

3,688

Interest expense

(2,488)

(2,963)

(11,174)

(12,176)

Other income, net

391

480

827

848

Total non-operating expense

(1,777)

(1,955)

(8,802)

(7,640)

Loss before provision (benefit) for income taxes

(22,316)

(7,450)

(37,057)

(102,772)

Provision (benefit) for income taxes

264

226

881

(253)

Net loss

$ (22,580)

$ (7,676)

$ (37,938)

$ (102,519)

Basic and diluted net loss per share

$     (0.24)

$   (0.08)

$     (0.40)

$       (1.11)

Weighted average shares outstanding used in

computing basic and diluted net loss per

share

94,398

93,219

94,079

92,772

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Twelve Months Ended December 31,

2010

2009

Cash flows from operating activities:

Net loss

$ (37,938)

$ (102,519)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

16,551

14,881

Stock-based compensation

17,399

10,326

Other non-cash transactions

198

(657)

Impairment of long-lived assets

12,576

-

Changes in operating assets and liabilities:

Accounts receivable

(20,301)

6,034

Inventory

(795)

2,848

Other assets

577

(200)

Accounts payable

4,274

(8,046)

Accrued compensation

(800)

(1,518)

Accrued expenses

1,683

(4,191)

Accrued clinical trial expenses

(2,023)

(3,455)

Deferred revenue

(47,025)

126,795

Other liabilities

(247)

(559)

Net cash (used in) provided by operating activities

(55,871)

39,739

Cash flows from investing activities:

Purchases of investments

(443,122)

(451,918)

Sales of investments

15,479

17,318

Maturities of investments

475,813

310,707

Purchases of property and equipment

(31,457)

(16,390)

Advance payments for property and equipment

-

(4,312)

Transaction costs from Novartis pulmonary asset sale

-

(4,440)

Net cash provided by (used in) investing activities

16,713

(149,035)

Cash flows from financing activities:

Payments of loan and capital lease obligations

(1,356)

(1,285)

Proceeds from issuances of common stock

8,891

4,820

Net cash provided by financing activities

7,535

3,535

Effect of exchange rates on cash and cash equivalents

(219)

(226)

Net decrease in cash and cash equivalents

$ (31,842)

$ (105,987)

Cash and cash equivalents at beginning of period

49,597

155,584

Cash and cash equivalents at end of period

$  17,755

$    49,597

SOURCE Nektar Therapeutics



RELATED LINKS

http://www.nektar.com