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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): November 3, 2004
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
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))
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Item 2.02 Results of Operations and Financial Condition.
On November 3, 2004, Nektar Therapeutics issued a press release announcing
results for the quarter ended September 30, 2004. A copy of the press release is
attached as Exhibit 99.1 to this Current Report and is incorporated herein by
reference.
The information in this report, including the exhibit hereto, 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.
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/ AJIT S. GILL
Ajit S. Gill
--------------------------------
Chief Executive Officer,
President and Director
Date: November 3, 2004
By: /s/ AJAY BANSAL
Ajay Bansal
--------------------------------
Chief Financial Officer and Vice
President, Finance and
Administration
Date: November 3, 2004
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Earnings Press Release of Nektar Therapeutics dated November 3,
2004.
Exhibit 99.1
Nektar Announces Third Quarter 2004 Financial Results
SAN CARLOS, Calif.--(BUSINESS WIRE)--Nov. 3, 2004--Nektar
Therapeutics (Nasdaq:NKTR) announced today its financial results for
the third quarter ended September 30, 2004.
The Company reported total revenue of $28.5 million for the three
months ended September 30, 2004 compared to $27.4 million for the
third quarter of 2003. In the third quarter of 2004, product sales
were $5.0 million compared to $7.7 million in 2003, and contract
revenue totaled $23.6 million compared to $19.6 million in the third
quarter of 2003.
The Company reported a net loss of $20.5 million or $(0.24) per
share for the three months ended September 30, 2004, compared to a net
loss of $17.2 million or $(0.31) per share for the three months ended
September 30, 2003.
For the nine months ended September 30, 2004, Nektar reported
total revenue of $82.9 million compared to $80.6 million for the nine
months ended September 30, 2003. For the nine months ended September
30, 2004, product sales were $15.7 million compared to $21.4 million
for the nine months ended September 30, 2003, and contract research
revenue totaled $67.2 million compared to $59.2 million for the nine
months ended September 30, 2003.
For the nine months ended September 30, 2004, Nektar reported a
net loss of $82.6 million or $(1.08) per share compared to a net loss
for the nine months ended September 30, 2003 of $50.2 million or
$(0.90) per share.
As of September 30, 2004, the Company reported cash, cash
equivalents and short-term investments totaling approximately $426.9
million compared to $425.3 million as of June 30, 2004. The September
30, 2004 balance includes $22.5 million of cash received by the
Company from the sale of its partnership interest in one of the
buildings it currently leases.
"We were pleased with the progress in the third quarter of two of
our key late-stage projects -- Exubera(R) (inhaled insulin) for
diabetes and Macugen(TM) (pegaptanib sodium injection) for the wet
form of age-related macular degeneration, the leading cause of severe
vision loss in patients older than 50 years of age in the developed
world," said Ajit S. Gill, Nektar president and chief executive
officer (CEO).
"Pfizer and Sanofi-Aventis presented encouraging two-year Exubera
data at the European Association for the Study of Diabetes (EASD)
showing sustained blood glucose control and pulmonary function for two
years in patients with type 2 diabetes. Eyetech's filing of a
marketing authorization application for Macugen was accepted by the
European Medicines Agency (EMEA); and in the U.S., the clinical
submission for Macugen was reviewed by the Food and Drug
Administration (FDA) Advisory Committee," continued Gill.
Summary of 3rd Quarter 2004 Progress
Exubera
On September 7, Pfizer and Sanofi-Aventis announced that new data
showed that Exubera was effective and well tolerated in controlling
blood glucose levels over a two-year period in patients with type 2
diabetes. These results were from trials extended from six months to
up to an additional 18 months where the primary objective was to
assess long-term pulmonary safety. According to Professor Manfred
Dreyer, lead study investigator, Bethanien Krankenhous, Hamburg,
Germany, "These data show that small pulmonary function differences
between the two groups occurred early after treatment initiation, had
no identified clinical relevance, and did not progress with two years
of continued inhaled insulin treatment."
Pfizer and Sanofi-Aventis submitted Exubera for review by the
European Medicines Agency (EMEA) for marketing approval in the
European Union in February 2004. According to Pfizer, interactions
between Pfizer and Sanofi-Aventis with the European regulatory
authorities are ongoing.
Nektar pioneered the pulmonary technologies used to develop
Exubera, creating a delivery system that integrates customized
formulation and proprietary fine-powder processing and packaging
technologies with a proprietary inhalation device. Nektar is partnered
with Pfizer, who is also collaborating with Sanofi-Aventis to develop
Exubera.
Partner Pipeline
-- On August 27, Eyetech and Pfizer announced that the FDA
Dermatologic & Ophthalmic Drugs Advisory Committee met and
reviewed the clinical submission for Macugen for the treatment
of neovascular age-related macular degeneration (AMD). In
addition, on September 20, Pfizer and Eyetech said the EMEA
accepted the filing of their marketing authorization
application for Macugen in Europe, and they have begun
clinical trials in Japan.
Nektar provides Eyetech with PEGylation technology for use in
Macugen. If approved, Macugen would be the sixth product
marketed in the U.S., and the seventh in Europe, using Nektar
PEGylation technology.
-- In October, Chiron Corporation and Nektar announced data from
the final study report of a Phase I clinical trial of
tobramycin powder for inhalation (TPI) presented at the 18th
Annual North American Cystic Fibrosis Conference. This inhaled
antibiotic is being developed for the treatment of cystic
fibrosis patients with Pseudomonas aeruginosa infection. The
trial data suggest that TPI, a formulation of tobramycin, a
drug with a proven efficacy and safety profile, may
significantly reduce the treatment burden for cystic fibrosis
patients by offering a short administration time and full
portability. Nektar develops and provides the drug delivery
technologies, including the formulation and device, for this
product.
Proprietary Products Group
Nektar's Proprietary Products Group applies Nektar technologies to
create differentiated versions of already-approved drug molecules.
Currently the Company has four development programs underway. One is
an inhaled formulation of a small molecule that has entered Phase I
testing, and a second is an inhalation product that has entered
proof-of-concept clinical testing. The other two programs are in
pre-clinical testing.
Conference Call Information
Ajit S. Gill, Nektar president and CEO, will host a conference
call today for analysts and investors beginning at 2:00 p.m. Pacific
Time, to discuss further the Company's performance.
Investors can access a live audio-only webcast through a link
posed on the Investor Relations section at Nektar's website at
http://www.nektar.com. The web broadcast of the conference call will
be available for replay through November 17, 2004.
Analysts and investors can also access the conference call live
via telephone by dialing 877-691-2551 (U.S.); 630-691-2747
(International). The passcode is Nektar and the leader is Mr. Ajit
Gill. An audio replay will be available shortly following the call
through November 17, 2004, and can be accessed by dialing 877-213-9653
(U.S.); or 630-652-3041 (International) with a passcode of 10164013.
In the event that any non-GAAP financial measure is discussed on the
conference call that is not described in this earnings release,
related information will be made available on the Investor Relations
page at the Nektar website as soon as practical after the conclusion
of this call.
About Nektar
Nektar Therapeutics 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 the Company'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 life cycles of
established products.
This release contains forward-looking statements that reflect
management's current views as to Nektar's business strategy, product
and technology development plans and funding, collaborative
arrangements, clinical trials, and other future events and operations.
These forward-looking statements involve uncertainties and other risks
that are detailed in Nektar's reports and other filings with the SEC,
including its Annual Report on Form 10-K for the fiscal year ended
December 2003, as amended, and its Quarterly Report on Form 10-Q for
the quarter ended June 30, 2004. Actual results could differ
materially from these forward-looking statements.
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2004 2003 2004 2003
-------- -------- -------- --------
(unaudited) (unaudited)
Revenue:
Contract research revenue $ 23,556 $ 19,624 $ 67,167 $ 59,227
Product sales 4,990 7,733 15,737 21,406
-------- -------- -------- --------
Total revenue 28,546 27,357 82,904 80,633
Operating costs and expenses:
Cost of goods sold 4,477 3,541 13,746 11,871
Research and development 37,421 31,777 107,885 96,298
General and administrative 4,704 5,190 14,611 15,504
Amortization of other
intangible assets 981 982 2,944 3,236
-------- -------- -------- --------
Total operating costs
and expenses 47,583 41,490 139,186 126,909
-------- -------- -------- --------
Loss from operations (19,037) (14,133) (56,282) (46,276)
Gain/(loss) on
extinguishment of debt - - (9,258) 4,320
Other income/ (expense), net (128) 457 303 708
Interest income 1,763 1,251 4,617 4,137
Interest expense (3,050) (4,781) (21,864) (13,083)
-------- -------- -------- --------
Loss before provision for
income taxes (20,452) (17,206) (82,484) (50,194)
Provision for income taxes - - 132 -
-------- -------- -------- --------
Net loss $(20,452) $(17,206) $(82,616) $(50,194)
======== ======== ======== ========
Basic and diluted net loss
per common share $ (0.24) $ (0.31) $ (1.08) $ (0.90)
======== ======== ======== ========
Shares used in computing
basic and diluted net loss
per common share 83,853 55,837 76,550 55,719
======== ======== ======== ========
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2004 2003
(unaudited) (a)
----------- ----------
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $ 426,913 $ 285,967
Inventory 10,474 8,559
Other current assets 13,353 11,972
---------- ---------
Total current assets 450,740 306,498
Restricted investments - 12,442
Property and equipment, net 150,009 149,388
Goodwill 130,120 130,120
Other intangible assets 7,582 10,963
Deposits and other assets 2,652 7,377
---------- ---------
$ 741,103 $ 616,788
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 20,732 $ 26,797
Capital lease obligations - current 1,651 1,341
Deferred revenue 16,070 18,719
---------- ---------
Total current liabilities 38,453 46,857
Convertible subordinated debentures 173,949 359,988
Accrued rent 2,132 2,110
Capital lease obligations - noncurrent 23,748 31,686
Other long-term liabilities 22,681 11,956
Stockholders' equity:
Preferred stock at par - -
Common stock at par 8 6
Capital in excess of par 1,181,392 778,500
Deferred compensation (3,022) (38)
Accumulated other comprehensive gain (387) 958
Accumulated deficit (697,851) (615,235)
---------- ---------
Total stockholders' equity 480,140 164,191
---------- ---------
$ 741,103 $ 616,788
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(a) The balance sheet at December 31, 2003 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.
CONTACT: Nektar Therapeutics
Joyce Strand, 650-631-3138