Nektar Therapeutics
Nov 7, 2017
PDF

Nektar Therapeutics Reports Financial Results for the Third Quarter of 2017

SAN FRANCISCO, Nov. 7, 2017 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the third quarter ended September 30, 2017.

Cash and investments in marketable securities at September 30, 2017 were $412.2 million as compared to $389.1 million at December 31, 2016.  The cash balance includes the $150.0 million upfront payment from Nektar's collaboration with Eli Lilly & Company for the development and commercialization of NKTR-358.

"Nektar's immuno-oncology portfolio continues to expand as we add novel drug candidates to our growing pipeline," said Howard W. Robin, President and CEO of Nektar. "NKTR-214 is the first I-O agent to both increase tumor-infiltrating lymphocytes (TILs) and increase PD-1 expression on human immune cells, which uniquely complements checkpoint inhibition and other anti-cancer mechanisms. As the majority of cancer patients have tumors that do not express PD-L1 and these patients receive limited benefit from treatment with checkpoint inhibitors, the potential of NKTR-214 to help patients is significant.  Finally, based on recent positive conversations with the agency regarding our regulatory plans for NKTR-181, we are now planning to submit an NDA for NKTR-181 by April 2018 with our data package of over 2,100 patients and healthy volunteers."

Revenue in the third quarter of 2017 was $152.9 million as compared to $36.3 million in the third quarter of 2016.  Year-to-date revenue for 2017 was $212.2 million as compared to $128.0 million in the first nine months of 2016.  Revenue in 2017 included recognition of $127.6 million of the $150.0 million upfront payment from Nektar's collaboration with Eli Lilly & Company for the development and commercialization of NKTR-358.

Total operating costs and expenses in the third quarter of 2017 were $83.4 million as compared to $69.2 million in the third quarter of 2016.  Year-to-date total operating costs and expenses in 2017 were $247.9 million as compared to $208.7 million for the same period in 2016.  Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.

Research and development expense in the third quarter of 2017 was $65.7 million as compared to $52.0 million in the third quarter of 2016.  Year-to-date R&D expense for 2017 was $187.0 million as compared to $153.6 million for the same period in 2016.  R&D expense was higher in the third quarter and first nine months of 2017 as compared to the same periods in 2016 primarily because of expenses for our pipeline programs, including Phase 3 clinical studies for NKTR-181, Phase 1/2 clinical studies of NKTR-214 and NKTR-358 and IND-enabling activities for NKTR-262 and NKTR-255.

General and administrative expense was $12.1 million in the third quarter of 2017 as compared to $10.3 million in the third quarter of 2016.  G&A expense in the first nine months of 2017 was $40.0 million as compared to $31.5 million for the same period in 2016. G&A expense in the first nine months of 2017 includes a $3.3 million charge for a litigation settlement related to a cross-license agreement. 

Net income in the third quarter of 2017 was $60.9 million or $0.39 basic income per share as compared to net loss of $43.2 million or $0.32 basic loss per share in the third quarter of 2016. Net loss in the first nine months of 2017 was $62.9 million or $0.41 basic loss per share as compared to $111.3 million or $0.82 basic loss per share in the first nine months of 2016.

The company also announced upcoming presentations at the following scientific congresses during the fourth quarter of 2017:

Society for Immunotherapy in Cancer (SITC) 32nd Annual Meeting, National Harbor, MD:

Oral Presentation: "PIVOT-02: Preliminary safety, efficacy and biomarker results from the Phase 1/2 study of CD-122-biased agonist NKTR-214 plus nivolumab in patients with locally advanced/metastatic solid tumors"  
Presenter: Dr. Adi Diab, Assistant Professor, Department of Melanoma Medical Oncology, Division of Cancer Medicine, The University of Texas MD Anderson Cancer Center, Houston, Texas
Session: Clinical Trials: Novel Combinations
Date: Saturday, November 11, 2017, 5:00 p.m. Eastern Time

Poster #P77: "The Novel IL-2 Cytokine Immune Agonist NKTR-214 Harnesses the Adaptive and Innate Immune System for the Treatment of Solid Cancers"
Presenter: Salah Eddine Bentebibel, University of Texas MD Anderson Cancer Center
Session: Biomarkers and Immune Monitoring
Date: Friday, November 10, 2017, 12:30-2:00 p.m. Eastern Time

Poster #P140: "NKTR-214 enhances anti-tumor T-cell immune responses induced by checkpoint blockade or vaccination"
Presenter: Meenu Sharma, University of Texas MD Anderson Cancer Center
Session: Cancer Vaccines
Date: Saturday, November 11, 2017, 12:30-2:00 p.m. Eastern Time

Poster #P274: "Combination of NKTR-214 and radiotherapy (RT) to reverse anergy and expand tumor-specific CD8 T-Cells"
Presenter: Joshua Walker, Oregon Health & Science University
Session: Combination Therapy
Date: Saturday, November 11, 2017, 12:30-2:00 p.m. Eastern Time

Poster #P275: "Harnessing the innate and adaptive immune system to eradicate treated and distant untreated solid tumors"
Presenter: Saul Kivimae, Nektar Therapeutics
Session: Combination Therapy
Date: Friday, November 10, 2017, 12:30-2:00 p.m. Eastern Time

Poster #P332: "Pre-clinical efficacy and tolerability of NKTR-255, a polymer-conjugated IL-15 for immuno-oncology"
Presenter: Peiwen Kuo, Nektar Therapeutics
Session: Combination Therapy
Date: Saturday, November 11, 2017, 12:30-2:00 p.m. Eastern Time

Poster #434: "Great Apes Adenoviral vaccine encoding neoantigens synergizes with immunomodulators to cure established tumors in mice"
Presenter: Anna Morena D'Alise, Nouscom srl
Session: Personalized Vaccines and Technologies/Personalized Medicines 
Date: Saturday, November 11, 2017, 12:30-2:00 p.m. Eastern Time

American College of Neuropsychopharmacology 56th Annual Meeting, Palm Springs, CA:

Poster #T166: "Abuse potential of NKTR-181 in recreational opioid users: results from a randomized, double-blind crossover oral study"
Presenter: Snow Ge, Nektar Therapeutics 
Session: Poster Session II
Date: Tuesday, December 5, 2017, 5:30-7:30 p.m. Pacific Time 

Conference Call to Discuss Third Quarter 2017 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, Tuesday, November 7, 2017.

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: http://ir.nektar.com/index.cfm. The web broadcast of the conference call will be available for replay through Monday, December 11, 2017.

To access the conference call, follow these instructions:
Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)    
Passcode4677348 (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 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 research-based development stage biopharmaceutical company whose mission is to discover and develop innovative medicines to address the unmet medical needs of patients. Our R&D pipeline of new investigational medicines includes treatments for cancer, auto-immune disease and chronic pain. We leverage Nektar's proprietary and proven chemistry platform in the discovery and design of our new therapeutic candidates. 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 uncertain or forward-looking statements which can be identified by words such as: "could," "plan," "expect," "should," "may," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the potential therapeutic benefits of and future development plans for our products (including NKTR-181, NKTR-358, NKTR-214, NKTR-262 and NKTR-255), the potential impact of NKTR-181 with respect to the opioid abuse epidemic, the timing and strategy for regulatory filings (including the timing and strategy for filing a new drug application, "NDA") and meetings with representatives of the Food and Drug Administration (FDA) and other governmental officials, and the results of clinical trials.  Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions and 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 and you should not rely on such statements. Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include: (i) clinical study outcomes remain very unpredictable and it is possible that a clinical study could fail even after positive interim data is observed; (ii) the regulatory pathway to review and approve pharmaceutical products is subject to substantial uncertainty; (iii) the data package required for filing and approval of an NDA to the FDA is very uncertain and difficult to predict due to broad FDA regulatory discretion, established guidance and precedent (e.g., the practice of typically requiring two placebo-controlled pivotal studies to support NDA approvals for drugs like NKTR-181), and changing FDA regulatory guidelines; (iv)   the final outcomes and conclusions from sponsor meetings with FDA are subject to substantial FDA discretion associated with issuing final meeting minutes and outcomes; (v)  regulations concerning and controlling access to opioid-based pharmaceuticals are strict and is difficult to predict which scheduling category will apply to NKTR-181 if regulatory approval is achieved; (vi) 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 (vii) 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 9, 2017.  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.   

Contact: 
For Investors: 
Jennifer Ruddock of Nektar Therapeutics
415-482-5585
Jodi Sievers of Nektar Therapeutics
415-482-5593

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)







ASSETS


September 30, 2017


December 31, 2016

(1)

Current assets:







Cash and cash equivalents


$                     37,967


$                   59,640



Short-term investments


314,600


329,462



Accounts receivable, net


3,314


15,678



Inventory


13,654


11,109



Other current assets


13,260


10,063




Total current assets


382,795


425,952










Long-term investments


59,596


-


Property, plant and equipment, net


62,396


65,601


Goodwill


76,501


76,501


Other assets


767


817




Total assets


$                  582,055


$                 568,871










LIABILITIES AND STOCKHOLDERS' EQUITY












Current liabilities:







Accounts payable


$                       8,563


$                      2,816



Accrued compensation


19,088


18,280



Accrued clinical trial expenses


7,000


7,958



Other accrued expenses


9,302


4,711



Interest payable


4,198


4,198



Capital lease obligations, current portion


2,482


2,908



Liability related to refundable upfront payment


12,500


12,500



Deferred revenue, current portion


25,491


14,352



Other current liabilities


3,920


4,499




Total current liabilities


92,544


72,222










Senior secured notes, net


244,771


243,464


Liability related to the sale of future royalties, net


98,394


105,950


Deferred revenue, less current portion


56,225


51,887


Other long-term liabilities


5,959


7,223




Total liabilities


497,893


480,746










Commitments and contingencies












Stockholders' equity:







Preferred stock


-


-



Common stock


15


15



Capital in excess of par value


2,170,169


2,111,483



Accumulated other comprehensive loss


(1,907)


(2,363)



Accumulated deficit


(2,084,115)


(2,021,010)




Total stockholders' equity


84,162


88,125



Total liabilities and stockholders' equity


$                  582,055


$                 568,871



(1) The consolidated balance sheet at December 31, 2016 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 September 30,


Nine Months Ended September 30,




2017


2016


2017


2016











Revenue:










 Product sales


$                       4,448


$                   14,698


$    24,897


$    41,664


Royalty revenue 


9,302


5,573


23,953


13,150


Non-cash royalty revenue related to sale of future royalties


8,066


7,692


21,367


22,341


License, collaboration and other revenue


131,112


8,373


142,028


50,829

Total revenue


152,928


36,336


212,245


127,984











Operating costs and expenses:










 Cost of goods sold


5,674


7,033


20,794


23,611


Research and development


65,714


51,951


187,032


153,569


General and administrative


12,055


10,253


40,027


31,515

Total operating costs and expenses


83,443


69,237


247,853


208,695











Income (loss) from operations


69,485


(32,901)


(35,608)


(80,711)











Non-operating income (expense):










 Interest expense


(5,540)


(5,614)


(16,452)


(16,918)


Non-cash interest expense on liability related to sale of future royalties


(4,471)


(4,902)


(13,535)


(14,929)


Interest income and other income (expense), net


1,599


332


3,163


1,666

Total non-operating expense, net


(8,412)


(10,184)


(26,824)


(30,181)











Income (loss) before provision for income taxes


61,073


(43,085)


(62,432)


(110,892)











Provision for income taxes


202


139


434


433

Net income (loss)


$                     60,871


$                  (43,224)


$   (62,866)


$ (111,325)











Net income (loss) per share:










Basic


$                         0.39


$                      (0.32)


$       (0.41)


$       (0.82)


Diluted


$                         0.37


$                      (0.32)


$       (0.41)


$       (0.82)











Weighted average shares outstanding used in computing net income (loss) per share:










Basic


156,411


137,094


155,153


136,415


Diluted


162,641


137,094


155,153


136,415

 

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)





Nine Months Ended September 30,





2017


2016

Cash flows from operating activities:






 Net loss


$                  (62,866)


$ (111,325)


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







Non-cash royalty revenue related to sale of future royalties


(21,367)


(22,341)



Non-cash interest expense on liability related to sale of future royalties 


13,535


14,929



Stock-based compensation 


25,118


18,793



Depreciation and amortization 


12,081


11,502



Other non-cash transactions


(1,370)


(2,190)


Changes in operating assets and liabilities:







Accounts receivable, net 


12,364


5,698



Inventory


(2,545)


592



Other assets 


(2,036)


6,041



Accounts payable 


5,729


4,799



Accrued compensation 


808


9,735



Accrued clinical trial expenses


(958)


2,726



Other accrued expenses 


4,971


2,386



Liability related to refundable upfront payment


-


12,500



Deferred revenue 


15,477


(12,665)



Other liabilities 


1,046


(5,793)


Net cash used in operating activities 


(13)


(64,613)








Cash flows from investing activities:







Purchases of investments 


(314,439)


(142,972)



Maturities of investments 


261,112


201,449



Sales of investments 


8,823


4,969



Purchases of property, plant and equipment 


(7,283)


(3,741)


Net cash (used in) provided by investing activities 


(51,787)


59,705








Cash flows from financing activities:







Payment of capital lease obligations 


(2,159)


(5,376)



Proceeds from shares issued under equity compensation plans


32,275


18,041


Net cash provided by financing activities 


30,116


12,665









Effect of exchange rates on cash and cash equivalents 


11


(32)


Net (decrease) increase in cash and cash equivalents 


(21,673)


7,725


Cash and cash equivalents at beginning of period


59,640


55,570


Cash and cash equivalents at end of period


$                   37,967


$    63,295








Supplemental disclosure of cash flow information:






Cash paid for interest


$                   14,989


$    15,513

 

View original content:http://www.prnewswire.com/news-releases/nektar-therapeutics-reports-financial-results-for-the-third-quarter-of-2017-300551330.html

SOURCE Nektar Therapeutics

News Provided by Acquire Media