Nektar Therapeutics Reports Second Quarter 2011 Financial Results

Aug 04, 2011, 16:15 ET from Nektar Therapeutics

SAN FRANCISCO, Aug. 4, 2011 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the second quarter ended June 30, 2011.

Cash, cash equivalents, and investments at June 30, 2011 were $481.8 million as compared to $315.9 million at December 31, 2010.

Revenue for the second quarter of 2011 decreased to $17.3 million as compared to $42.6 million in the second quarter of 2010.  This decrease in revenue year over year is primarily attributable to the completion as of December 31, 2010 of the amortization of the $125.0 million upfront payment received in 2009 from AstraZeneca for the NKTR-118 and NKTR-119 license agreement.  

“Nektar continued to advance our pipeline programs in the second quarter of 2011,” said Howard W. Robin, President and Chief Executive Officer of Nektar. “In June, we finalized our pivotal study design for NKTR-102 in metastatic breast cancer with the FDA. AstraZeneca’s Phase 3 KODIAC program for NKTR-118 is continuing with the first regulatory filing planned for 2013.  We completed our first clinical study of NKTR-181, our novel opioid candidate, with positive proof-of-concept results.  Finally, we are on track to introduce a new IND candidate later this year.”

Total operating costs and expenses in the second quarter of 2011 increased by 27% to $51.6 million, compared to $40.7 million in the second quarter of 2010.  This increase was primarily a result of higher development expenses related to the advancement of multiple programs in clinical development.  Research and development expense increased to $32.3 million in the second quarter of 2011 as compared to $25.6 million for the second quarter in 2010.  General and administrative expense increased to $11.2 million in the second quarter of 2011 from $10.2 million in the second quarter of 2010.

Net loss for the second quarter ended June 30, 2011 was $36.4 million or $0.32 loss per share as compared to a net loss of $0.5 million or $0.01 loss per share in the second quarter of 2010.

Nektar also announced several upcoming data presentations for NKTR-102 and NKTR-181:

Phase 2 data for NKTR-102 in metastatic breast cancer will be presented in an oral session at the 2011 ASCO Breast Cancer Symposium on September 9, 2011:

  • Abstract #269: “Final results of NKTR-102, a topoisomerase I inhibitor-polymer conjugate, in patients (Pts) with pretreated metastatic breast cancer (MBC) demonstrating significant antitumor activity,” A. A. Garcia, et al.

Phase 1 data for NKTR-181 will be presented at American Academy of Pain Management (AAPM) Annual Clinical Meeting on September 21, 2011:

  • "Phase 1 Study of Oral NKTR-181, a Novel Opioid Analgesic Molecule with Reduced Abuse Potential and Favorable Safety Profile," Lynn Webster, MD, et al.
  • "NKTR-181: A Novel Mu-Opioid Agonist That Exhibits Reduced Abuse Potential and Maintains Full Analgesic Activity Following Repeat Dosing in Preclinical Rodent Models," Stephen D. Harrison, PhD, et al.

Conference Call to Discuss Second Quarter 2011 Financial Results

Nektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time (ET)/2:00 p.m. Pacific Time (PT) today, Thursday, August 4, 2011.

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. The web broadcast of the conference call will be available for replay through Friday, September 2, 2011.

To access the conference call, follow these instructions: Dial: (877) 299-4454 (U.S.); (617) 597-5447 (international) Passcode: 93854703 (Nektar Therapeutics is the host)

An audio replay will also be available shortly following the call through Friday, September 2, 2011 and can be accessed by dialing (888) 286-8010 (U.S.); or (617) 801-6888 (international) with a passcode of 53256804.

In the event that any non-GAAP financial measure is discussed on the conference call that is not 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 NKTR-118, an investigational drug candidate, being evaluated in Phase 3 clinical studies as a once-daily, oral tablet for the treatment of opioid-induced constipation.  The agreement also includes NKTR-119, an earlier stage development program that is a co-formulation of NKTR-118 and an opioid.  NKTR-181, a novel mu-opioid analgesic molecule, is being evaluated in Phase 1 clinical studies.  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.  

Nektar's technology has enabled seven approved products in the U.S. or Europe through partnerships with leading biopharmaceutical companies, including UCB's Cimzia® for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS® for hepatitis C and Amgen's Neulasta® 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, the value and potential of Nektar's technology platform, the timing of the commencement of clinical trials and regulatory submissions, and the value and potential of certain of Nektar's collaborations with third parties.  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 related regulatory submissions) 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 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 29, 2011 and the Current Report on Form 8-K filed today.  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

June 30, 2011

December 31, 2010

(1)

Current assets:

Cash and cash equivalents

$                                   11,626

$                                  17,755

Short-term investments

351,280

298,177

Accounts receivable

8,460

25,102

Inventory

9,797

7,266

Other current assets

7,932

5,679

Total current assets

389,095

353,979

Long-term investments

118,941

-

Property and equipment, net

85,381

89,773

Goodwill

76,501

76,501

Other assets

936

972

Total assets

$                                 670,854

$                                521,225

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                                     3,243

$                                    7,194

Accrued compensation

9,435

9,252

Accrued expenses

8,129

8,540

Accrued clinical trial expenses

13,832

12,144

Deferred revenue, current portion

19,867

20,584

Other current liabilities

6,768

6,394

Total current liabilities

61,274

64,108

Convertible subordinated notes

214,955

214,955

Capital lease obligations

15,863

17,014

Deferred revenue

117,931

124,763

Deferred gain

3,715

4,152

Other long-term liabilities

5,840

5,571

Total liabilities

419,578

430,563

Commitments and contingencies

Stockholders' equity:

Preferred stock

-

-

Common stock

11

9

Capital in excess of par value

1,587,461

1,354,232

Accumulated other comprehensive income

766

968

Accumulated deficit

(1,336,962)

(1,264,547)

Total stockholders' equity

251,276

90,662

Total liabilities and stockholders' equity

$                                 670,854

$                                521,225

(1) The consolidated balance sheet at December 31, 2010 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

Six Months Ended

June 30,

June 30,

2011

2010

2011

2010

Revenue:

Product sales and royalties

$  11,008

$ 11,154

$  15,801

$ 14,738

License, collaboration and other

6,323

31,409

12,829

61,062

Total revenue

17,331

42,563

28,630

75,800

Operating costs and expenses:

Cost of goods sold

8,140

4,889

11,403

9,185

Research and development

32,270

25,600

62,446

48,886

General and administrative

11,185

10,207

22,912

19,220

Total operating costs and expenses

51,595

40,696

96,761

77,291

Income (loss) from operations

(34,264)

1,867

(68,131)

(1,491)

Non-operating income (expense):

Interest income

529

393

961

856

Interest expense

(2,570)

(2,909)

(5,155)

(5,860)

Other income (expense), net

(16)

163

118

187

Total non-operating expense

(2,057)

(2,353)

(4,076)

(4,817)

Loss before provision for income taxes

(36,321)

(486)

(72,207)

(6,308)

Provision for income taxes

60

31

208

339

Net loss

$ (36,381)

$    (517)

$ (72,415)

$ (6,647)

Basic and diluted net loss per share

$     (0.32)

$   (0.01)

$     (0.65)

$   (0.07)

Shares used in computing basic and

diluted net loss per share

114,153

94,065

111,430

93,849

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended June 30,

2011

2010

Cash flows from operating activities:

Net loss

$   (72,415)

$   (6,647)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

7,649

8,334

Stock-based compensation

9,682

8,105

Other non-cash transactions

620

(205)

Changes in operating assets and liabilities:

Accounts receivable

16,642

(4,645)

Inventory

(2,531)

(3,306)

Other assets

(2,191)

(136)

Accounts payable

(3,149)

2,183

Accrued compensation

183

(2,144)

Accrued expenses

2,371

1,012

Accrued clinical trial expenses

1,688

(818)

Deferred revenue

(7,549)

(55,120)

Other liabilities

(658)

(729)

Net cash used in operating activities

$   (49,658)

$ (54,116)

Cash flows from investing activities:

Purchases of investments

(509,681)

(218,275)

Sales of investments

180,478

8,197

Maturities of investments

156,962

241,256

Purchases of property and equipment

(6,845)

(8,796)

Net cash (used in) provided by investing activities

$ (179,086)

$  22,382

Cash flows from financing activities:

Payments of loan and capital lease obligations

(934)

(731)

Proceeds from issuances of common stock

223,549

6,148

Net cash provided by financing activities

$  222,615

$    5,417

Effect of exchange rates on cash and cash equivalents

-

(36)

Net decrease in cash and cash equivalents

$     (6,129)

$ (26,353)

Cash and cash equivalents at beginning of period

17,755

49,597

Cash and cash equivalents at end of period

$    11,626

$  23,244

SOURCE Nektar Therapeutics



RELATED LINKS

http://www.nektar.com