Nektar Therapeutics
NEKTAR THERAPEUTICS (Form: 8-K, Received: 11/07/2017 16:52:37)

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): November 7, 2017 

NEKTAR THERAPEUTICS

(Exact Name of Registrant as Specified in Charter)

 

Delaware 0-24006 94-3134940

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

455 Mission Bay Boulevard South

San Francisco, California 94158

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (415) 482-5300

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:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 

   
Item 2.02 Results of Operations and Financial Condition.

 

On November 7, 2017, Nektar Therapeutics, a Delaware corporation (“Nektar”), issued a press release (the “Press Release”) announcing its financial results for the quarter ended September 30, 2017. A copy of the Press Release is furnished herewith as Exhibit 99.1.

 

On October 31, 2017, Nektar announced that it would hold a Webcast conference call on November 7, 2017 to review its financial results for the quarter ended September 30, 2017. This conference call is accessible through a link that is posted on the home page and Investors section of the Nektar website: http://www.nektar.com.

 

The information in this report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the Securities and Exchange Commission made by Nektar Therapeutics, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit
No.
  Description
   
99.1      Press release titled “Nektar Therapeutics Reports Financial Results for the Third Quarter of 2017” issued by Nektar Therapeutics on November 7, 2017.

 

 

 

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.

     
   
By: /s/  Mark A. Wilson
    Mark A. Wilson
    General Counsel and Secretary
   
Date:  

November 7, 2017

 

 

 

 Exhibit 99.1

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) 32 nd 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 56 th 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)    
Passcode 4677348 (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)

 

  September 30, 2017     December 31, 2016 (1)  
ASSETS                
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