UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
Date
of
Report (Date of earliest event reported): October
20, 2008
NEKTAR
THERAPEUTICS
(Exact
name of registrant as specified in its charter)
|
DELAWARE
|
|
0-24006
|
|
94-3134940
|
|
(State
or other jurisdiction of
incorporation)
|
|
(Commission
File Number)
|
|
(I.R.S.
Employer
Identification
No.)
|
201
Industrial Road
San
Carlos, California 94070
(650)
631-3100
(Address,
including zip code, and telephone number, including
area
code, of registrant’s principal executive offices)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry
into a Material Definitive Agreement
On
October 20, 2008, Nektar Therapeutics (“Nektar”) entered into an Asset Purchase
Agreement with Novartis Pharmaceuticals Corporation, a Delaware corporation,
Novartis Pharma AG, a Swiss corporation (together with its affiliate Novartis
Pharmaceuticals Corporation, “Novartis”), and AeroGen, Inc., a Delaware
corporation and a subsidiary of Nektar. Nektar is transferring to Novartis
certain of its assets related to its pulmonary business and associated
technology, and intellectual property. Upon the completion of the transaction,
Nektar will be entitled to proceeds of $115 million in cash.
Pursuant
to the agreement, Nektar is transferring to Novartis assets which include
certain dry powder and liquid pulmonary formulation and manufacturing assets,
including capital equipment and manufacturing facility lease obligations;
certain intellectual property and manufacturing methods and associated
information systems related to the pulmonary business; manufacturing and
associated payments for Ciprofloxacin inhaled powder, and manufacturing and
royalty rights to the Tobramycin inhalation powder (TIP) program and certain
other interests in two private companies. In addition, Novartis is expected
to
hire approximately 140 Nektar pulmonary personnel.
Pursuant
to the agreement, Nektar will retain its Bayer HealthCare partnered program
NKTR-061 (the “Amikacin Agreement”), all royalty rights relating to its other
Bayer HealthCare partnered program, Ciprofloxacin inhaled powder, its
development program related to NKTR-063 (inhaled vancomycin) and intellectual
property specific to inhaled insulin.
Novartis
is generally responsible for liabilities related to the pulmonary business
arising after the consummation of the transactions and Nektar is generally
responsible for liabilities (including environmental, intellectual property,
employment, contracts, taxes, and others) arising before the consummation.
Nektar and Novartis will split the cost of California sales tax and Nektar
shall
bear the cost of other transfer taxes and costs.
The
parties make customary representations and warranties and indemnify each
other
for breach of the representations and warranties or the failure to perform
covenants in the agreement. Certain of the indemnification obligations of
the
parties do not contain a cap on liability and survive beyond the 18-month
anniversary of the agreement.
The
agreement provides that Nektar, until the completion of the transaction,
will
follow certain customary interim covenants intended to preserve the value
of the
business and assets to be transferred. Nektar and Novartis agree to certain
covenants regarding the employees to be transferred to Novartis and their
benefits.
Pursuant
to the agreement, the parties have agreed to customary confidentiality
obligations, information sharing and mutual cooperation covenants, tax
obligations, and regulatory covenants. Novartis has an exclusive option to
receive for no additional consideration an assignment or exclusive license
of
certain SEDS technology and intellectual property and related agreements.
The
agreement contains customary closing conditions for Novartis and Nektar,
including no injunctions, compliance with anti-trust requirements and obtaining
of any other government consents, correctness of representations and warranties,
and material compliance with covenants. Novartis does not have to complete
the
transaction unless, among other things, Nektar has obtained certain required
third party consents, and there is no litigation with merit against the
transaction.
Prior
to
closing the agreement is terminable by mutual agreement, in the event the
transaction has not been consummated by October 20, 2009, or in the event
of
certain serious breaches by the parties.
The
representations, warranties and covenants of Nektar and Novartis contained
in
the agreement were made only for purposes of the agreement and as of specific
dates, were solely for the benefit of the parties to the agreement, and may
be
subject to limitations agreed by the contracting parties, including being
qualified by disclosures exchanged between the parties in connection with
the
execution of the agreement, and may be subject to standards of materiality
applicable to the contracting parties that differ from those applicable to
investors. Investors are not third-party beneficiaries under the agreement
and
should not rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of facts or
conditions of Nektar or Novartis or any of their respective assets.
Nektar
knows of no material relationships between it or its affiliates and Novartis
other than in respect of the agreement and the TIP program.
Item
7.01 Regulation
FD Disclosure.
On
October 21, 2008, Nektar issued the press release which is filed herewith as
Exhibit 99.1 to the report. The information in this Item 7.01, including
Exhibit 99.1, is being furnished and shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liability of that Section, nor
shall such information be deemed to be incorporated by reference in any
registration statement or other document filed under the Securities Act of
1933,
as amended, or the Exchange Act, except as otherwise stated in such
filing.
Item
8.01 Other
Events.
Nektar
does not have any changes to its prior financial guidance for the year ending
December 31, 2008 except that upon the expected closing of the transaction
with Novartis on December 31, 2008, Nektar’s year-end cash position
is expected to increase to approximately $440 million. If Nektar
had not entered into the agreement with Novartis or if the expected closing
of
the transaction does not occur on or before December 31, 2008, Nektar’s year-end
cash position is expected to be approximately $330 million.
Safe
Harbor Statement
This
Current Report on Form 8-K contains forward-looking statements regarding the
transaction with Novartis, Nektar’s cash position, and reflecting Nektar’s
current views as to its products, development programs, science and technology
and business prospects. These forward-looking statements involve risks and
uncertainties, including but not limited to: (i) the transaction cannot close
unless certain conditions are satisfied, including Hart-Scott-Rodino, obtaining
of third party consents, and the company’s representations and warranties being
materially true at closing; (ii) Nektar and Novartis have mutual
indemnifications obligations; (iii) Nektar’s proprietary product candidates and
those of its partners are in the early phases of clinical development and the
risk of failure is high and can occur at any stage prior to regulatory approval.
Important risks and uncertainties are detailed in Nektar’s reports and other
filings with the Securities and Exchange Commission, including its most recent
Quarterly Report on Form 10-Q filed on August 8, 2008. 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. For more
information on Nektar Therapeutics, please visit http://www.nektar.com.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits.
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Exhibit
Number
|
Description
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99.1
|
Press
Release issued by Nektar Therapeutics on October 21,
2008
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SIGNATURES
Pursuant
to the requirement of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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Date:
October 21, 2008
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By: | /s/ Gil M. Labrucherie |
|
Gil M. Labrucherie |
||
| General Counsel and Secretary | ||
Exhibit
Index
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Exhibit
Number
|
Description
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99.1
|
Press
Release issued by Nektar Therapeutics on October 21,
2008
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|
News
Release
Nektar
Therapeutics 201 Industrial Road San Carlos, CA 94070 650-631-3100
Phone
650-631-3150 Fax
www.nektar.com
|
Nektar
Sells Pulmonary Business to Novartis for $115 Million and Nektar Retains
Key
Pulmonary Programs Including Amikacin Inhale, Inhaled Vancomycin, and
Ciprofloxacin Inhalation Powder
SAN
CARLOS, Calif., Oct 21, 2008 -- Nektar Therapeutics (Nasdaq: NKTR) today
announced that Novartis AG has agreed to acquire from Nektar specific pulmonary
delivery assets, technology, and intellectual property for $115 million in
cash.
“This
agreement will allow us to focus our efforts on the development of novel
therapeutics using our PEGylation and conjugate chemistry-based drug development
platforms,” said Nektar President and CEO Howard W. Robin. “The transaction also
strengthens our balance sheet and significantly reduces expenses. It is a
perfect example of our ability to monetize assets that had little future
value
for Nektar.”
Novartis
will assume ownership of certain dry powder and liquid pulmonary formulation
and
manufacturing assets, including capital equipment and manufacturing facility
capital lease obligations. The agreement also transfers to Novartis
approximately 140 Nektar personnel, as well as certain intellectual property
and
manufacturing methods. Additionally, Nektar will transfer manufacturing and
royalty rights to the Tobramycin inhalation powder (TIP) program, already
partnered with Novartis.
Nektar
will retain ownership of its Bayer HealthCare-partnered program NKTR-061
(Amikacin Inhale), scheduled to enter Phase 3 clinical trials by year-end,
and
royalties to Ciprofloxacin inhaled powder (CIP), also partnered with Bayer
HealthCare. Likewise, Nektar will retain NKTR-063 (inhaled vancomycin), a
proprietary program scheduled to enter Phase 2 development in the U.S. early
next year, as well as all intellectual property specific to inhaled
insulin.
The
transaction is subject to customary closing and regulatory conditions, including
expiration of the 30-day waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. Novartis and Nektar expect to complete the transaction
on December 31, 2008. Nektar's financial guidance for 2008 will remain
unchanged, excluding the positive effects of this transaction.
JPMorgan
acted as exclusive financial advisor to Nektar.
Nektar
to Host Investor Conference Call Tuesday October 21 at 7:30 AM Pacific
time/10:30 AM Eastern to Discuss Novartis Transaction
Howard
Robin, president and chief executive officer, will host a conference call
Tuesday, October 21, 2008, beginning at 7:30 AM Pacific time/10:30 am Pacific
time. A
live
audio-only Webcast of the conference call can be accessed through a link
that is
posted on the Investor Relations section of the Nektar website: http://www.nektar.com.
The web
broadcast of the conference call will be available for replay through Tuesday,
November 4, 2008.
To
access
the conference call by phone, follow these instructions:
Dial:
866-713-8566 (U.S.); +1-617-597-5325 (international)
Passcode:
44107011 (Howard Robin is the host)
An
audio
replay of the call will also be available shortly following the call through
Tuesday, November 4, 2008 and can be accessed by dialing (888-286-8010) (U.S.);
or 617-801-6888 (international) with a passcode of 50627256.
About
Nektar
Nektar
Therapeutics is a biopharmaceutical company developing novel therapeutics
based
on its PEGylation and conjugate chemistry technology platforms. Nektar's
technology and drug development expertise have enabled nine approved products
for partners, which include leading biopharmaceutical companies. Nektar is
also
developing a robust pipeline of its own high-value therapeutics that addresses
unmet medical needs by leveraging and expanding its technology platforms
to
improve and enable molecules.
This
press release contains forward-looking statements regarding the transaction
with
Novartis and reflect the company's current views as to its products, development
programs, science and technology and business prospects. These forward-looking
statements involve risks and uncertainties, including but not limited to:
(i)
the transaction cannot close unless certain conditions are satisfied, including
Hart-Scott-Rodino, obtaining of third party consents, and the company’s
representations and warranties being materially true at closing; (ii); the
company and Novartis have mutual indemnifications obligations; (iii) the
company's proprietary product candidates and those of its partners are in
the
early phases of clinical development and the risk of failure is high and
can
occur at any stage prior to regulatory approval; (iv) the company or its
partners may not be able to successfully obtain regulatory approval for product
candidates; and (v) the company's patent applications for its technology
platforms and proprietary or partner product candidates may not issue, patents
that have issued may not be enforceable, or intellectual property licenses
from
third parties may be required in the future. Important risks and uncertainties
are detailed in the company's reports and other filings with the Securities
and
Exchange Commission, including the Form 8-K filed today and its most recent
Quarterly Report on Form 10-Q filed on August 8, 2008. Actual results could
differ materially from the forward-looking statements contained in this press
release. The company undertakes no obligation to update forward-looking
statements, whether as a result of new information, future events or otherwise.
For more information on Nektar Therapeutics, please visit http://www.nektar.com.
Nektar
Contacts:
For
Investors:
Stephan
Herrera
Senior
Director, Investor Relations
+1
415
488 7699
Email:
sherrera@nektar.com
and
Jennifer
Ruddock
Senior
Director, Investor Relations
Nektar
Therapeutics
+1
650
631 4954
Email:
jruddock@nektar.com
For
Media:
Susan
Noonan
The
SAN
Group
susan@sanoonan.com
+1
212
966 3650
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