SAN CARLOS, Calif., Aug 06, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Nektar Therapeutics (Nasdaq: NKTR) today announced the company's financial results for the second quarter and six-months ended June 30, 2008.
Cash, cash equivalents, and short-term investments were $373.9 million at June 30, 2008 compared to $412.6 million at March 31, 2008.
Revenue for the three month period ended June 30, 2008 was $20.4 million compared to revenue of $65.9 million in the second quarter of 2007. For the first half of 2008, revenue was $40.4 million as compared to $150.9 million in the same period of 2007. This decrease in revenue is the result of lower product manufacturing revenues due to the termination of the Exubera collaboration by Pfizer in late 2007.
Nektar has made significant improvements to our operating efficiencies as compared to a year ago. For the first half of 2008, the company's general and administrative expense was $24.8 million as compared to $29.9 million for the same period a year ago. Research and development expense was $70.9 million in the first half of 2008 as compared to $78.5 million for the same six month period in 2007. Included in the $70.9 million of overall research and development spending is approximately $32 million of new investments in Nektar's preclinical and clinical development programs.
Nektar reported a net loss for the quarter ended June 30, 2008 of $33.4 million or $0.36 per share, compared to a net loss of $27.5 million or $0.30 per share in the second quarter of 2007. For the first half of 2008, the company reported a net loss of $74.1 million or $0.80 per share, compared to a net loss of $53.2 million or $0.58 per share for the same period in 2007.
The increase in net loss for the second quarter and first half of 2008 compared to a year ago is primarily the result of a loss of gross margin associated with Pfizer's termination of the Exubera collaboration and maintenance of Exubera manufacturing capacity through April 2008. The final spending and charges associated with the termination of the Exubera inhaled insulin program were paid and recorded in the second quarter of 2008.
"Over the past year, Nektar has made excellent progress in expanding and advancing our pipeline while at the same time maintaining financial discipline," said Nektar President and CEO Howard W. Robin. "In 2008, we will have seven proprietary programs in clinical development and an impressive preclinical pipeline of important, high-value therapeutics. We have executed on our strategy of building valuable proprietary programs without pursuing any dilutive financings."
Nektar will host a conference call today for analysts and investors at 2:00 p.m. Pacific time to discuss the company's second quarter performance. This conference call will be available via webcast and can be accessed through a link that is posted on the Investor Relations section of the Nektar website, www.nektar.com. The web broadcast of the conference call will be available for replay through August 20, 2008.
To access the conference call, follow these instructions:
Dial: (866) 831-5605 (U.S.); (617) 213-8851 (international)
Passcode: 33430853 (Howard Robin is the host)
Audio replay dial-in and passcode:
Dial: (888) 286-8010 (U.S.); (617) 801-6888 (international)
Passcode: 67859021
About Nektar
Nektar Therapeutics is a biopharmaceutical company that develops and enables differentiated therapeutics with its industry-leading PEGylation and pulmonary drug development 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. For more information on Nektar Therapeutics, please visit http://www.nektar.com.
This press release contains forward-looking statements that reflect the company's current views regarding the potential, progress, and clinical plans for the company's proprietary and partnered product pipeline, and the value and potential of the company's technology platforms. These forward-looking statements involve risks and uncertainties, including but not limited to: (i) the company's proprietary product candidates and those of its partners are in various stages of clinical development and the risk of failure is high and can occur at any stage prior to regulatory approval; (ii) the timing or success of the commencement or end of clinical trials and commercial launch of partnered products may be delayed or unsuccessful due to slower than anticipated patient enrollment, drug manufacturing challenges, changing standards of care, clinical trial design, clinical outcomes, or delay or failure in obtaining regulatory approval in one or more important markets; (iii) clinical trials are long, expensive and uncertain processes and the risk of failure of any product that is in clinical development and prior to regulatory approval remains high and can occur at any stage due to efficacy, safety or other factors; (iv) the company's patent applications for its 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; and (v) the outcome of any existing or future intellectual property or other litigation related to the company's proprietary product candidates or complex commercial agreements. Other important risks and uncertainties are detailed in the company's reports and other filings with the Securities and Exchange Commission, including its most recent Quarterly Report on Form 10-Q. 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.
Stephan Herrera, 415-488-7699
sherrera@nektar.com
Jennifer Ruddock, 650-631-4954
jruddock@nektar.com
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
Unaudited Unaudited
Three-Months Ended Six-Months Ended
June 30, June 30,
2008 2007 2008 2007
Revenue:
Product sales and royalties $9,010 $49,302 $19,381 $122,321
Contract research 11,391 16,615 21,012 28,612
Total revenue 20,401 65,917 40,393 150,933
Operating costs and expenses:
Cost of goods sold 5,444 39,490 12,671 96,012
Idle Manufacturing Costs 1,487 - 6,821 -
Research and development 33,500 41,000 70,873 78,492
General and administrative 13,091 13,178 24,802 29,913
Amortization of other
intangible assets 237 237 473 473
Total operating costs and expenses 53,759 93,905 115,640 204,890
Loss from operations (33,358) (27,988) (75,247) (53,957)
Non-operating income (expense):
Interest income 3,190 5,452 8,203 10,925
Interest expense (3,929) (4,702) (7,847) (9,635)
Other expense, net 769 (22) 1,071 (16)
Total non-operating income 30 728 1,427 1,274
Loss before provision for income
taxes (33,328) (27,260) (73,820) (52,683)
Provision for income taxes 47 250 260 500
Net loss $(33,375) $(27,510) $(74,080) $(53,183)
Basic and diluted net loss per
share $(0.36) $(0.30) $(0.80) $(0.58)
Shares used in computing basic and
diluted net loss per share 92,400 91,804 92,365 91,630
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2008 2007
(unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $31,829 $76,293
Short-term investments 342,078 406,060
Accounts receivable, net of
allowance 12,067 21,637
Inventory 10,166 12,187
Other current assets 13,988 7,106
Total current assets 410,128 523,283
Property and equipment, net 114,229 114,420
Goodwill 78,431 78,431
Other intangible assets, net 2,207 2,680
Other assets 4,498 6,289
Total assets $609,493 $725,103
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,862 $3,589
Accrued compensation 11,276 14,680
Accrued expenses to contract
manufacturers - 40,444
Accrued expenses 21,545 12,446
Interest payable 2,645 2,638
Capital lease obligations, current
portion 1,833 2,335
Deferred revenue, current portion 17,053 19,620
Other current liabilities 2,546 2,340
Total current liabilities 58,760 98,092
Convertible subordinated notes 315,000 315,000
Capital lease obligations 21,016 21,632
Deferred revenue 58,595 61,349
Deferred credits 7,626 8,680
Other long-term liabilities 4,795 5,911
Total liabilities 465,792 510,664
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock 9 9
Capital in excess of par value 1,306,787 1,302,541
Accumulated other comprehensive
income 739 1,643
Accumulated deficit (1,163,834) (1,089,754)
Total stockholders' equity 143,701 214,439
Total liabilities and stockholders'
equity $609,493 $725,103
(1) The consolidated balance sheet at December 31, 2007 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. Certain 2007 amounts have been reclassified
between line items to conform with the 2008 presentation.
NEKTAR THERAPEUTICS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share information)
(unaudited)
Six Months Ended June 30,
2008 2007
Cash flows provided by (used in)
operating activities:
Net loss $(74,080) $(53,183)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Stock-based compensation 3,863 11,690
Depreciation and amortization 11,820 15,250
Amortization of gain related to sale
of building (437) (437)
Loss on sale or disposal of assets 128 904
Changes in assets and liabilities:
Decrease (increase) in trade accounts
receivable 9,570 (2,681)
Decrease (increase) in inventories 2,021 (2,572)
Decrease (increase) in other assets (6,026) 5,388
Increase (decrease) in accounts
payable (1,727) (4,264)
Increase (decrease) in accrued
compensation (3,676) 954
Increase (decrease) in accrued
expenses to contract manufacturers (40,444) -
Increase (decrease) in accrued
expenses 9,099 (1,600)
Increase (decrease) in interest
payable 7 (708)
Increase (decrease) in deferred
revenue (5,321) 16,952
Increase (decrease) in other
liabilities (1,222) (380)
Net cash used in operating activities (96,425) (14,687)
Cash flows from investing activities:
Purchases of investments (334,685) (273,540)
Maturities of investments 369,337 353,171
Sales of investments 28,590 -
Purchases of property and equipment (10,349) (11,765)
Net cash provided by investing
activities 52,893 67,866
Cash flows used in financing
activities:
Proceeds from issuance of common
stock 383 2,708
Payments of loan and capital lease
obligations (1,151) (823)
Repayments of convertible
subordinated notes - (36,026)
Net cash used in financing activities (768) (34,141)
Effect of exchange rates on cash and
cash equivalents (164) 58
Net increase (decrease) in cash and
cash equivalents $(44,464) $19,096
Cash and cash equivalents at
beginning of period $76,293 $63,760
Cash and cash equivalents at end of
period $31,829 $82,856
SOURCE Nektar Therapeutics
http://www.nektar.com
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