SAN CARLOS, Calif., Nov 06, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Nektar Therapeutics (Nasdaq: NKTR) today announced that it has repurchased 32%, or $100.0 million, of its outstanding convertible debt for approximately 48 cents on the dollar, for a total purchase price of $47.8 million. The company also reported its financial results for the third quarter and nine-months ended September 30, 2008.
"The turnaround at Nektar is now largely complete," said Nektar President and CEO Howard W. Robin. "We have created one of the most robust pipelines in biotech, dramatically improved the company's financial strength, assembled a new management team with a solid track record, and refocused the business around our powerful polymer and conjugate chemistry drug development platform."
Third Quarter 2008 Financial Results
Cash, cash equivalents, and short-term investments were $344.5 million at September 30, 2008 compared to $373.9 million at June 30, 2008.
Revenue for the three month period ended September 30, 2008 was $21.4 million compared to revenue of $56.3 million in the third quarter of 2007. For the first nine months of 2008, revenue was $61.8 million as compared to $207.3 million in the same period of 2007. This decrease in revenue is primarily the result of lower product manufacturing revenues due to the termination of the inhaled insulin collaboration by Pfizer in late 2007.
Nektar has continued to make significant improvements to its operating efficiencies as compared to a year ago. For the first nine months of 2008, the company's general and administrative expense was $37.0 million as compared to $42.3 million for the same period a year ago. Research and development expense was $109.1 million in the first nine months of 2008 as compared to $114.3 million for the same period in 2007. Included in the $109.1 million of overall research and development spending is approximately $66.0 million of new investments in Nektar preclinical and clinical development programs.
Nektar reported a net loss for the quarter ended September 30, 2008 of $37.0 million or $0.40 per share, compared to a net loss of $18.6 million or $0.20 per share in the third quarter of 2007. For the first nine months of 2008, the company reported a net loss of $111.1 million or $1.20 per share, compared to a net loss of $71.8 million or $0.78 per share for the same period in 2007.
Conference Call to Discuss Third Quarter 2008 Financial Results
Nektar will host a conference call today for analysts and investors at 2:00 p.m. Pacific time to discuss the company's third 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, http://www.nektar.com. The web broadcast of the conference call will be available for replay through November 20, 2008.
To access the conference call, follow these instructions:
Dial: 866-362-4666 (U.S.); 617-597-5313 (international)
Participant Passcode: 63756947 (Howard Robin is the host)
Audio replay dial-in and passcode:
To access the replay, follow these instructions:
Dial: 888-286-8010 (U.S.); 617-801-6888 (international)
Participant Passcode: 41304675
Nektar to Host Annual R&D Day on November 12
Nektar will host its second annual R&D Day meeting on Wednesday, November 12, 2008 from 12:00 pm to 3:30 pm Eastern time at the InterContinental Hotel in New York City. For more information or to RSVP for this event, please visit the investor relations section of the company's website at http://www.nektar.com.
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.
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 status of the company's turnaround, the potential, progress, and clinical plans for the company's proprietary and partnered product pipeline, the value and potential of the company's technology platforms, and the company's financial strength. 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; , and (iv) the risk that the sale of the company's pulmonary business assets to Novartis Pharmaceuticals Corporation may not close or the closing may be delayed, (v) 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 (vi) 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 Nine-Months Ended
September 30, September 30,
2008 2007 2008 2007
Revenue:
Product sales and royalties $9,474 $37,497 $28,855 $159,818
Contract research 11,965 18,824 32,977 47,436
Total revenue 21,439 56,321 61,832 207,254
Operating costs and expenses:
Cost of goods sold 5,349 27,457 18,020 123,469
Cost of idle Exubera
manufacturing capacity 6,821
Research and development 38,265 35,773 109,138 114,265
General and administrative 12,149 12,426 36,951 42,339
Amortization of other
intangible assets 237 237 710 710
Total operating costs and
expenses 56,000 75,893 171,640 280,783
Loss from operations (34,561) (19,572) (109,808) (73,529)
Non-operating income (expense):
Interest income 2,375 5,519 10,578 16,444
Interest expense (3,988) (4,773) (11,835) (14,408)
Loss on equity investment (705) - (705) -
Other income (expense), net 117 206 1,188 189
Total non-operating income
(expense) (2,201) 952 (774) 2,225
Loss before provision for income
taxes (36,762) (18,620) (110,582) (71,304)
Provision for income taxes 276 - 536 500
Net loss $(37,038) $(18,620) $(111,118) $(71,804)
Basic and diluted net loss per
share $(0.40) $(0.20) $(1.20) $(0.78)
Shares used in computing basic
and diluted net loss per share 92,415 92,028 92,408 91,764
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2008 2007
(unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $63,713 $76,293
Short-term investments 280,803 406,060
Accounts receivable, net of allowance 8,515 21,637
Inventory 9,861 12,187
Assets held for sale 42,975 -
Other current assets 4,420 7,106
Total current assets 410,287 523,283
Property and equipment, net 73,641 114,420
Goodwill 78,431 78,431
Other intangible assets, net 1,971 2,680
Other assets 4,022 6,289
Total assets $568,352 $725,103
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,113 $3,589
Accrued compensation 14,723 14,680
Accrued expenses to contract manufacturers - 40,444
Accrued expenses 15,715 12,446
Interest payable 85 2,638
Capital lease obligations, current portion 1,401 2,335
Deferred revenue, current portion 11,970 19,620
Other current liabilities 2,515 2,340
Total current liabilities 48,522 98,092
Convertible subordinated notes 315,000 315,000
Capital lease obligations 20,689 21,632
Deferred revenue 57,027 61,349
Deferred gain 7,323 8,680
Other long-term liabilities 11,159 5,911
Total liabilities 459,720 510,664
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock 9 9
Capital in excess of par value 1,309,973 1,302,541
Accumulated other comprehensive income (478) 1,643
Accumulated deficit (1,200,872) (1,089,754)
Total stockholders' equity 108,632 214,439
Total liabilities and stockholders' equity $568,352 $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
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share information)
(unaudited)
Nine Months Ended
September 30,
2008 2007
Cash flows used in operating activities:
Net loss $(111,118) $(71,804)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock-based compensation 6,955 11,712
Depreciation and amortization 18,610 22,964
Loss on equity investment 705 -
Foreign currency transaction loss 428 -
Loss on sale or disposal of assets 282 1,776
Amortization of gain related to sale of building (656) (656)
Changes in assets and liabilities:
Decrease (increase) in trade accounts receivable 13,122 10,343
Decrease (increase) in inventories 2,326 (2,519)
Decrease (increase) in prepaids and other assets 2,659 6,846
Increase (decrease) in accounts payable (1,476) (2,784)
Increase (decrease) in accrued compensation (229) (2,170)
Increase (decrease) in accrued
expenses to contract manufacturers (40,444) -
Increase (decrease) in accrued expenses 3,269 6,622
Increase (decrease) in interest payable (2,553) (2,684)
Increase (decrease) in deferred revenue (11,972) 61,777
Increase (decrease) in other liabilities 5,027 152
Net cash used in operating activities (115,065) 39,575
Cash flows from investing activities:
Purchases of investments (411,417) (342,807)
Maturities of investments 506,348 468,245
Sales of investments 28,590 -
Purchases of property and equipment (15,064) (21,030)
Investment in Pearl Therapeutics Inc. (4,236) -
Net cash provided by investing activities 104,221 104,408
Cash flows used in financing activities:
Repayments of convertible subordinated notes - (36,026)
Payments of loan and capital lease
obligations (1,910) (787)
Proceeds from issuance of common
stock related to employee stock
option exercises and employee stock
purchase plan 477 3,479
Net cash used in financing activities (1,433) (33,334)
Effect of exchange rates on cash and
cash equivalents (303) 304
Net increase (decrease) in cash and
cash equivalents $(12,580) $110,953
Cash and cash equivalents at beginning of period $76,293 $63,760
Cash and cash equivalents at end of period $63,713 $174,713
SOURCE Nektar Therapeutics
http://www.nektar.com
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