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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): April 22, 2003
NEKTAR THERAPEUTICS
(Exact name of Registrant as specified in its charter)
Delaware 0-23556 94-3134940
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
150 Industrial Road
San Carlos, California 94070
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (650) 631-3100
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit 99.1: Press Release Dated April 22, 2003
Item 9. Regulation FD Disclosure
This Form 8-K is being furnished to report information pursuant to Item 12
"Results of Operations and Financial Condition." Please see Item 12 below.
Item 12. Results of Operations and Financial Condition
On April 22, 2003, Nektar Therapeutics issued a press release announcing results
for the quarter ended March 31, 2003. A copy of the press release is attached as
Exhibit 99.1 to this Current Report and is incorporated herein by reference.
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/ AGIT S. GILL
-----------------------------------
Ajit S. Gill
Chief Executive Officer,
President and Director
Date: April 22, 2003
By: /s/ AJAY BANSAL
-----------------------------------
Ajay Bansal
Chief Financial Officer, and Vice
President, Finance and
Administration
Date: April 22, 2003
EXHIBIT INDEX
Exhibit No. Description
99.1 Earnings Press Release of Nektar Therapeutics dated April 22,
2003.
Exhibit 99.1
Netkar Announces First Quarter 2003 Results
SAN CARLOS, Calif.--(BUSINESS WIRE)--April 22, 2003--Nektar
Therapeutics (Nasdaq:NKTR), formerly Inhale Therapeutic Systems, Inc.,
announced today its financial results (under generally accepted
accounting principles) for the first quarter ending March 31, 2003.
The Company reported revenue of $25.5 million for the three months
ending March 31, 2003, including $7.1 million of product revenue and
$18.4 million of contract research revenue compared to $26.7 in the
same period in 2002, including $5.4 million of product revenue and
$21.3 million of contract research revenue. The decrease in revenue
reported during the first three months of 2003 compared to the first
three months of 2002 is due primarily to lower clinical drug and
device sales for our partnered projects.
The Company reported a net loss of $19.9 million or $(0.36) per
share for the three months ending March 31, 2003 compared to $25.1
million or $(0.45) per share for the same period in 2002.
The Company's cash balance at the end of the quarter was $251.5
million versus $294.0 million at the end of 2002. The net cash usage
for the three months ending March 31, 2003 was $42.5 million. The
March 31, 2003 cash balance does not reflect a $12.3 million receipt,
which was collected on April 1, 2003. First quarter cash usage did
include $2.6 million of disbursements associated with the Company's
reduction-in-force announced in the fourth quarter 2002 and $1.3
million of disbursements related to the Company's name change.
"During the first quarter, we advanced partner and proprietary
product programs, as well as made progress on scale-up and regulatory
filing preparation for Exubera(R)," said Ajit S. Gill, president and
chief executive officer (CEO). "We continue to target an increase in
revenues in 2003 and a decrease in our operating loss compared to
2002."
Summary of First Quarter Activities
Partner Pipeline
"We are pleased with the continued progress in our partnered
product pipeline during the quarter. A major highlight for us was
gaining regulatory approval of the fifth product in the United States
using our technology, Pfizer's (formerly Pharmacia's) SOMAVERT(R),"
said Gill. On March 27, 2003, Nektar reported that SOMAVERT, which
uses Nektar's PEGylation technology, was approved by the Food and Drug
Administration (FDA) for the treatment of certain patients with
acromegaly, a debilitating disease caused by a noncancerous tumor on
the pituitary gland that produces increased quantities of growth
hormone.
An additional product using Nektar technology entered the clinic
early in the quarter. InterMune, Inc. on January 23 announced that it
initiated a Phase I clinical study to evaluate PEG-Alfacon, the
PEGylated version of Infergen(R) (interferon alfacon-1), as a
potential new treatment for chronic hepatitis C virus.
Nektar also announced a collaboration with The Straumann Group, a
leader in implant dentistry, to license, manufacture and supply
Nektar's PEG-based hydrogel technology for dental regeneration
products.
Exubera
"Pfizer and Aventis are continuing long-term safety testing for
the Exubera inhaled insulin product, and in January Pfizer indicated
that it does not expect to file for approval in 2003," continued Gill.
"We made additional progress in the quarter on scale-up of
manufacturing for the product and are continuing our work to prepare
for the regulatory filing of Exubera." Nektar provides advanced drug
formulation and inhaler technology and manufacturing to Pfizer to
develop Exubera, an inhaled, rapid-acting, powdered insulin for
diabetes. Pfizer has entered into an agreement with Aventis to
co-develop, co-promote and co-manufacture Exubera.
Proprietary Pipeline
"As part of our continuing effort to become the leading drug
delivery company, we plan to transition from being a drug delivery
technology provider to a company that also leverages its drug delivery
platforms to develop enhanced products through Phase I/II clinical
trials before partnering for further development," said Gill. "Charged
with fulfilling this mission, the recently-formed Proprietary Products
Group made advances on several fronts. Most notably, we started Phase
I clinical trials on an inhaled small-molecule, supergeneric drug
product with the first patient dosing in March 2003. We believe that
our proprietary products program will become a strong third business
base and revenue generation source together with our partnership
pipeline and Exubera," continued Gill.
Management Changes to Support Growth Strategy
In February 2003, Nektar announced the creation of a new executive
position to drive development and implementation of management and
operations processes to achieve Nektar's growth and profitability
objectives. Brigid Makes, previously Nektar's chief financial officer
(CFO), was named to this new senior management position, vice
president of operations management. Ajay Bansal, formerly of Mehta
Partners, Novartis, and McKinsey, has joined Nektar as its new CFO.
Nektar Therapeutics, formerly Inhale Therapeutic Systems, Inc.,
provides industry-leading drug delivery technologies, expertise and
manufacturing to enable the development of high-value, differentiated
therapeutics. Nektar's advanced drug delivery capabilities are
designed to enable Nektar's biotechnology and pharmaceutical partners
to solve drug development challenges and realize the full potential of
their therapeutics, from developing new molecular entities to managing
the lifecycles of established products. For additional information,
see http://www.nektar.com
This release contains forward-looking statements that reflect the
current views of Nektar management as to future operating results,
products, product development, and other future events and operations.
These forward-looking statements involve uncertainties and other risks
that are detailed in the Company's reports and other filings with the
Securities and Exchange Commission, including its most recent Annual
Report on Form 10-K. These documents identify important factors that
could cause the Company's actual performance to differ from current
expectations, including, without limitation, the outcome of clinical
trials, the status of its relationship with collaborative partners,
regulatory review, manufacturing capabilities, marketing
effectiveness, and the ability of the Company to manage its cash and
other assets in light of its ongoing operating costs and outstanding
indebtedness.
Nektar Conference Call
Ajit Gill, Nektar president and CEO, will host a conference call
today for analysts and investors beginning at 2:00 p.m. Pacific Time
to further discuss the company's financial results.
Investors can access a live audio-only Webcast through a link that
will be posted on the Investor Relations page at Nektar's Web site at
http://www.nektar.com. The Web broadcast of the conference call will
be available for replay through May 6, 2003. In the event that any
Non-GAAP financial measure is discussed on the conference call that is
not described in this release, related complimentary information will
be made available on the Investor Relations page at Nektar's Web site
at http://www.nektar.com as soon as practicable after the conclusion
of the conference call.
Analysts and investors can also access the conference call live
via telephone by dialing (800) 559-2403 (US); (847) 619-6534
(international). The passcode is Nektar and the leader is Mr. Ajit
Gill. An audio replay will be available shortly following the call
through May 6, 2003 and can be accessed by dialing (877) 213-9653 with
a passcode of 7067425#.
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2003 2002*
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $251,512 $293,969
Other current assets 18,925 17,020
---------- ----------
Total current assets 270,437 310,989
Property and equipment, net 142,706 143,452
Goodwill 130,120 130,120
Other intangible assets, net 14,343 15,470
Deposits and other assets 6,338 6,607
---------- ----------
$563,944 $606,638
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 31,740 $ 40,617
Capital lease obligations - current 1,062 1,008
Deferred revenue 8,322 22,040
---------- ----------
Total current liabilities 41,124 63,665
Convertible subordinated notes and debentures 299,149 299,149
Accrued rent 2,052 2,033
Capital lease obligations - noncurrent 31,488 31,862
Other long-term liabilities 2,796 3,159
Stockholders' equity:
Preferred stock 40,000 40,000
Common stock 715,279 714,686
Deferred compensation (128) (239)
Accumulated other comprehensive income 1,478 1,668
Accumulated deficit (569,294) (549,345)
---------- ----------
Total stockholders' equity 187,335 206,770
---------- ----------
$563,944 $606,638
========== ==========
(*) The balance sheet at December 31, 2002 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements.
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
Three Months Ended
March 31,
2003 2002
(unaudited)
Revenue:
Contract research revenue $ 18,393 $ 21,301
Product sales 7,135 5,445
---------- ----------
Total revenue 25,528 26,746
Operating costs and expenses:
Cost of goods sold 4,622 1,890
Research and development 32,141 41,927
General and administrative 5,178 5,381
Amortization of other intangible assets 1,127 1,127
---------- ----------
Total operating costs and expenses 43,068 50,325
---------- ----------
Loss from operations (17,540) (23,579)
Other income/(expense), net 119 (88)
Interest income/(expense), net (2,528) (1,389)
---------- ----------
Net loss $(19,949) $(25,056)
========== ==========
Basic and diluted net loss per common share $ (0.36) $ (0.45)
========== ==========
Shares used in computing basic and
diluted net loss per common share 55,601 55,143
========== ==========
CONTACT: Netkar
Joyce Strand, 650/631-3138