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Nektar Therapeutics Reports Third Quarter 2011 Financial Results

16:15 EDT Wednesday, November 02, 2011

SAN FRANCISCO, Calif., Nov. 2, 2011 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the third quarter ended September 30, 2011.

Cash, cash equivalents, and investments at September 30, 2011 were $458.0 million as compared to $315.9 million at December 31, 2010.

Revenue for the third quarter of 2011 was $27.1 million, a decrease as compared to $37.9 million in the third quarter of 2010 primarily as a result of 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 is highly focused on continuing to advance our important proprietary drug candidates in pain and cancer," said Howard W. Robin, President and Chief Executive Officer of Nektar. "AstraZeneca's Phase 3 KODIAC program for NKTR-118 for opioid-induced constipation is continuing on-track with AZ targeting regulatory filing in 2013.  We are targeting the start of the Phase 3 BEACON study for NKTR-102 in metastatic breast cancer before year-end.  NKTR-181, our novel opioid candidate to treat chronic pain, is moving rapidly through Phase 1 clinical development and we plan to announce topline data before year-end.  Finally, we plan to file an IND for NKTR-192, our new clinical candidate to treat acute pain, in the first quarter of 2012." 

Total operating costs and expenses in the third quarter of 2011 were $48.4 million, an increase compared to $44.2 million in the third quarter of 2010. The increase is primarily a result of higher development expenses related to the advancement of multiple programs in clinical development.  Research and development expense increased to $31.0 million in the third quarter of 2011 as compared to $27.7 million for the same quarter in 2010.  General and administrative expense was $12.4 million in the third quarter of 2011 as compared to $10.2 million in the third quarter of 2010.  

Net loss for the third quarter ended September 30, 2011 was $24.1 million or $0.21 loss per share.

The company also announced upcoming presentations at medical meetings and scientific congresses scheduled for the fourth quarter of 2011:

Chemotherapy Foundation Symposium XXIX: Innovative Cancer Therapy for Tomorrow, New York, NY:

  • Session Title: "Evaluating Single-Agent NKTR-102 in Metastatic Breast Cancer"
  • Presenter: Edith Perez, MD
  • Session Type: Oral
  • Program Track: Breast Cancer
  • Date and Time: November 10, 2011, 1:25 PM Eastern Time

Neuroscience 2011: Society for Neuroscience Annual Meeting, Washington, DC:

Preclinical data for NKTR-192, a new opioid drug candidate being developed to treat acute pain, will be presented.

  • Abstract Title: "Pharmacological characterization of an orally active opioid analgesic with rapid onset of activity and low abuse liability." Harrison, S., et al.  
  • Abstract/Poster Number: #178.10/NN20
  • Session Title/Track:  "Pharmacology Relevant to Pain, Addiction, and Development"
  • Date and Time: Nov 13, 2011, 8:00 AM - 12:00 PM Eastern Time

2011 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics, San Francisco, CA

Preclinical data for NKTR-102 in ovarian cancer will be presented.

  • Abstract Title: "Strong synergistic activity of NKTR-102 - pegylated liposomal doxorubicin (PLD) combination therapy in a nonclinical model of platinum-resistant A2780 human ovarian cancer." Hoch, et al.
  • Abstract/Poster Number: C209
  • Session Title/Track:  Topoisomerase Inhibitors
  • Date and Time: Nov 15, 2011, 12:30 PM - 2:30 PM Pacific Time

Conference Call to Discuss Third 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, Wednesday, November 2, 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 December 1, 2011.

To access the conference call, follow these instructions:

Dial: (866) 203-3436 (U.S.); (617) 213-8849 (international)Passcode: 16610535 (Nektar Therapeutics is the host)

An audio replay will also be available shortly following the call through Thursday, December 1, 2011 and can be accessed by dialing (888) 286-8010 (U.S.); or (617) 801-6888 (international) with a passcode of 41636531.

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 therapeutic 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 wholly-owned by Nektar, is being evaluated in Phase 1 clinical studies.  In oncology, NKTR-102, a novel proprietary 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. Additional development stage products that leverage Nektar's proprietary technology platform include peginesatide, for which Affymax and partner Takeda submitted an NDA to the FDA in May 2011, and Baxter's BAX 855, a long-acting PEGylated rFVIII program planned to enter Phase 1 clinical development in 2011.

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 including but not limited to Nektar's plans to initiate the Phase 3 BEACON study for NKTR-102 in metastatic breast cancer before year-end, plans to complete a Phase 1 clinical study for NKTR-181 and announce those results before year end, AstraZeneca's plans for regulatory filings in 2013, Baxter's plans to advance BAX 855 into Phase 1 clinical development prior to year end, Nektar's plan to file an investigational new drug application for NKTR-192 in the first quarter of 2012, and the value and potential of Nektar's R&D pipeline.  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, the announcement of clinical trial results, and the commercial launch of our drug candidates 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; (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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 5, 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

September 30, 2011

December 31, 2010

(1)

Current assets:

Cash and cash equivalents

$                  43,008

$                 17,755

Short-term investments

223,479

298,177

Accounts receivable

12,914

25,102

Inventory

10,654

7,266

Other current assets

7,565

5,679

Total current assets

297,620

353,979

Long-term investments

191,478

-

Property and equipment, net

81,649

89,773

Goodwill

76,501

76,501

Other assets

845

972

Total assets

$                648,093

$               521,225

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                    2,175

$                   7,194

Accrued compensation

11,760

9,252

Accrued expenses

11,777

8,540

Accrued clinical trial expenses

13,612

12,144

Deferred revenue, current portion

19,982

20,584

Convertible subordinated notes, current portion

214,955

-

Other current liabilities

4,781

6,394

Total current liabilities

279,042

64,108

Convertible subordinated notes

-

214,955

Capital lease obligations

15,250

17,014

Deferred revenue

113,045

124,763

Deferred gain

3,497

4,152

Other long-term liabilities

6,462

5,571

Total liabilities

417,296

430,563

Commitments and contingencies

Stockholders' equity:

Preferred stock

-

-

Common stock

11

9

Capital in excess of par value

1,592,803

1,354,232

Accumulated other comprehensive income (loss)

(987)

968

Accumulated deficit

(1,361,030)

(1,264,547)

Total stockholders' equity

230,797

90,662

Total liabilities and stockholders' equity

$                648,093

$               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

Nine Months Ended

September 30,

September 30,

2011

2010

2011

2010

Revenue:

Product sales and royalties

$  10,222

$  7,230

$  26,023

$  21,968

License, collaboration and other

16,846

30,695

29,675

91,757

Total revenue

27,068

37,925

55,698

113,725

Operating costs and expenses:

Cost of goods sold

5,038

6,245

16,441

15,430

Research and development

31,018

27,724

93,464

76,610

General and administrative

12,350

10,181

35,262

29,401

Total operating costs and expenses

48,406

44,150

145,167

121,441

Loss from operations

(21,338)

(6,225)

(89,469)

(7,716)

Non-operating income (expense):

Interest income

622

369

1,583

1,225

Interest expense

(2,543)

(2,826)

(7,698)

(8,686)

Other income (expense), net

(717)

249

(599)

436

Total non-operating expense

(2,638)

(2,208)

(6,714)

(7,025)

Loss before provision for income taxes

(23,976)

(8,433)

(96,183)

(14,741)

Provision for income taxes

92

278

300

617

Net loss

$ (24,068)

$ (8,711)

$ (96,483)

$ (15,358)

Basic and diluted net loss per share

$     (0.21)

$   (0.09)

$     (0.86)

$     (0.16)

Weighted average shares outstanding used in

computing basic and diluted net loss per share

114,413

94,213

112,435

93,972

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended September 30,

2011

2010

Cash flows from operating activities:

Net loss

$   (96,483)

$ (15,358)

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

Depreciation and amortization

11,424

12,499

Stock-based compensation

14,501

12,716

Other non-cash transactions

967

(176)

Changes in operating assets and liabilities:

Accounts receivable

12,188

(752)

Inventory

(3,388)

(4,989)

Other assets

(1,750)

1

Accounts payable

(4,200)

1,755

Accrued compensation

2,508

500

Accrued expenses

6,238

4,090

Accrued clinical trial expenses

1,468

(1,408)

Deferred revenue

(12,320)

(83,107)

Other liabilities

(2,681)

(2,049)

Net cash used in operating activities

$   (71,528)

$ (76,278)

Cash flows from investing activities:

Purchases of investments

(627,529)

(315,160)

Sales of investments

218,660

10,290

Maturities of investments

290,810

360,906

Purchases of property and equipment

(8,294)

(22,160)

Net cash (used in) provided by investing activities

$ (126,353)

$  33,876

Cash flows from financing activities:

Payments of loan and capital lease obligations

(1,431)

(1,119)

Issuance of common stock, net of issuance costs

224,072

7,142

Net cash provided by financing activities

$  222,641

$    6,023

Effect of exchange rates on cash and cash equivalents

493

(312)

Net increase (decrease) in cash and cash equivalents

$    25,253

$ (36,691)

Cash and cash equivalents at beginning of period

17,755

49,597

Cash and cash equivalents at end of period

$    43,008

$  12,906

SOURCE Nektar Therapeutics




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