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): February 24, 2009
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.)
|
201
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))
|
|
¨
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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
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Results
of Operations and Financial
Condition
|
On
February 24, 2009, Nektar Therapeutics issued a press release (the “Press
Release”) announcing its financial results for the quarter and year ended
December 31, 2008. A copy of the Press Release is furnished herewith
as Exhibit 99.1.
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.
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Item 9.01
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Financial
Statements and Exhibits
|
|
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Exhibit No.
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Description
|
|
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99.1
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Press
release titled “Nektar Therapeutics Reports Fourth Quarter and Year-End
2008 Financial Results” issued on February 24,
2009.
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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:
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/s/ Gil M. Labrucherie |
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Gil
M. Labrucherie
|
|
|
General
Counsel and Secretary
|
|
|
Date:
|
February 24, 2009 |
News
Release
Nektar
Therapeutics Reports Fourth Quarter
And
Year-End 2008 Financial Results
SAN CARLOS, Calif., February 24,
2009 — Nektar Therapeutics (Nasdaq: NKTR) today reported its financial
results for the fourth quarter and year ended December 31, 2008.
“2008 was
a transformational year for Nektar,” said Howard W. Robin, President and Chief
Executive Officer of Nektar. “Using our unique polymer conjugation
chemistry platform, we advanced numerous proprietary drug candidates into
clinical and preclinical development. Further, we significantly
strengthened our financial position with the sale of pulmonary delivery assets
and the buy-back of $100 million of convertible debt at a substantial
discount. Nektar is exceptionally well-positioned as we enter
2009.”
Fourth
Quarter and Year-End 2008 Financial Results
Nektar
completed two significant transactions during the fourth quarter of
2008:
- - The
company repurchased $100.0 million of its 3.25% convertible subordinated notes
for $47.8 million. As a result, the company recognized a gain of
$50.1 million in the fourth quarter, net of transaction costs of $1.0 million
and accelerated amortization of our deferred financing costs of $1.1
million.
- -
Nektar completed the divestiture of certain of its pulmonary delivery assets to
Novartis for $115.0 million on December 31, 2008. As a result of the
completion of this transaction, the company recognized a gain of $69.6 million
in the fourth quarter of 2008.
Cash,
cash equivalents, and short-term investments at December 31, 2008 were $379.0
million.
Revenue
for the three month period ended December 31, 2008 was $28.4 million compared to
revenue of $65.8 million in the fourth quarter of 2007. For the
twelve months of 2008, revenue was $90.2 million as compared to $273.0 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
company’s inhaled insulin collaboration with Pfizer in late 2007.
Research
and development expense was $154.4 million in 2008 as compared to $153.6 million
for 2007. Included in the $154.4 million of overall research and development
spending is approximately $82.0 million of new investments in Nektar preclinical
and clinical development programs.
Nektar
has also continued to make improvements to its operating efficiencies as
compared to a year ago. For the twelve months ended December 31, 2008, the
company's general and administrative expense was $51.5 million as compared to
$57.3 million for the same period a year ago.
Net
income for the quarter ended December 31, 2008 was $76.8 million or $0.83 per
share, compared to net income of $39.0 million or $0.42 per share in the fourth
quarter of 2007. For the year 2008, the company reported a net
loss of $34.3 million or $0.37 per share, compared to a net loss of $32.8
million or $0.36 per share for 2007.
Conference
Call to Discuss Fourth Quarter and Year-End 2008 Financial Results
The
company also announced that due to scheduling considerations, the conference
call to review results will now be held on March 2, 2009 at 2 PM Pacific
Time. Details are below:
Howard
Robin, president and chief executive officer, and John Nicholson, chief
financial officer, will host a conference call beginning at 5:00 p.m. Eastern
Time (ET)/2:00 p.m. Pacific Time (PT) on Monday, March 2, 2009.
A live
audio-only Webcast of the conference call can be accessed through a link that is
posted on the home page and Investor Relations section of the Nektar website:
http://www.nektar.com.
To access
the conference call, follow these instructions:
Dial:
800.561.2718 (U.S.); 617.614.3525 (international)
Participant
Passcode: 32041145 (Howard Robin is the host)
An audio
replay will also be available shortly after the call and will remain so through
March 16, 2009.
To access
the replay, follow these instructions:
Dial:
888-286-8010 (U.S.); 617-801-6888 (international)
Participant
Passcode: 44161634
About
Nektar
Nektar
Therapeutics is a biopharmaceutical company developing novel therapeutics based
on its PEGylation and advanced polymer conjugate 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 potential of the company's pipeline of proprietary
drug candidates, the value and potential of the company's technology, and the
company’s financial position. These forward-looking statements
involve numerous risks and uncertainties, including but not limited to: (i) the
company's proprietary product candidates and those of its collaboration partners
are in various stages of clinical development and the risk of failure is high
and can unexpectedly occur at any stage of development prior to regulatory
approval for numerous reasons including safety and efficacy findings; (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) 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 (iv) the
outcome of any 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 and Annual
Report on Form 10-K. 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.
Jennifer
Ruddock, 650-631-4954
Nektar
Therapeutics
Susan
Noonan, 212-966-3650
SAN
Group
NEKTAR
THERAPEUTICS
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
thousands, except per share information)
(unaudited)
|
Three-Months
Ended
December
31,
|
Twelve-Months
Ended
December
31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
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Revenue:
|
||||||||||||||||
|
Product
sales and royalties
|
$ | 12,400 | $ | 26,702 | $ | 41,255 | $ | 180,755 | ||||||||
|
Collaboration
and other
|
15,952 | 39,071 | 48,930 | 92,272 | ||||||||||||
|
Total
revenue
|
28,352 | 65,773 | 90,185 | 273,027 | ||||||||||||
|
Operating
costs and expenses:
|
||||||||||||||||
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Cost
of goods sold
|
10,196 | 17,387 | 28,216 | 137,696 | ||||||||||||
|
Other
cost of revenue
|
- | 6,661 | 6,821 | 9,821 | ||||||||||||
|
Research
and development
|
45,279 | 39,310 | 154,417 | 153,575 | ||||||||||||
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General
and administrative
|
13,835 | 14,233 | 51,497 | 57,282 | ||||||||||||
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Impairment
of long lived assets
|
1,458 | 28,396 | 1,458 | 28,396 | ||||||||||||
|
Gain
on sale of pulmonary assets
|
(69,572 | ) | - | (69,572 | ) | - | ||||||||||
|
Gain
on termination of collaborative agreements, net
|
- | (79,178 | ) | - | (79,178 | ) | ||||||||||
|
Litigation
settlement
|
- | 1,583 | - | 1,583 | ||||||||||||
|
Total
operating costs and expenses
|
1,196 | 28,392 | 172,837 | 309,175 | ||||||||||||
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Income
(Loss) from operations
|
27,156 | 37,381 | (82,652 | ) | (36,148 | ) | ||||||||||
|
Non-operating
income (expense):
|
||||||||||||||||
|
Interest
income
|
1,917 | 5,757 | 12,495 | 22,201 | ||||||||||||
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Interest
expense
|
(3,357 | ) | (4,230 | ) | (15,192 | ) | (18,638 | ) | ||||||||
|
Other
income (expense), net
|
(425 | ) | 944 | 58 | 1,133 | |||||||||||
|
Gain
on extinguishment of debt
|
50,149 | - | 50,149 | - | ||||||||||||
|
Total
non-operating income
|
48,284 | 2,471 | 47,510 | 4,696 | ||||||||||||
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Income
(Loss) before provision for income taxes
|
75,440 | 39,852 | (35,142 | ) | (31,452 | ) | ||||||||||
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Provision
(benefit) for income taxes
|
(1,342 | ) | 809 | (806 | ) | 1,309 | ||||||||||
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Net
income (loss)
|
$ | 76,782 | $ | 39,043 | $ | (34,336 | ) | $ | (32,761 | ) | ||||||
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Basic
and diluted net earnings (loss) per share
|
$ | 0.83 | $ | 0.42 | $ | (0.37 | ) | $ | (0.36 | ) | ||||||
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Shares
used in computing basic and diluted net earnings (loss) per share (1)
|
92,473 | 92,211 | 92,407 | 91,876 | ||||||||||||
Notes
to Consolidated Statements of Operations
(1) For
the three-months ended December 31, 2008, there were approximately 81 dilutive
shares which did not change earnings per share.
NEKTAR
THERAPEUTICS
CONSOLIDATED
BALANCE SHEETS
(In
thousands)
(unaudited)
|
December 31, 2008
|
December 31, 2007 (1)
|
|
||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 155,584 | $ | 76,293 | ||||
|
Short-term
investments
|
223,410 | 406,060 | ||||||
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Accounts
receivable, net of allowance
|
11,161 | 21,637 | ||||||
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Inventory
|
9,319 | 12,187 | ||||||
|
Other
current assets
|
6,746 | 7,106 | ||||||
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Total
current assets
|
406,220 | 523,283 | ||||||
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Property
and equipment, net
|
73,578 | 114,420 | ||||||
|
Goodwill
|
76,501 | 78,431 | ||||||
|
Other
assets
|
4,237 | 8,969 | ||||||
|
Total assets
|
$ | 560,536 | $ | 725,103 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 13,832 | $ | 3,589 | ||||
|
Accrued
compensation
|
11,570 | 14,680 | ||||||
|
Accrued
clinical trial expenses
|
17,622 | 2,895 | ||||||
|
Accrued
expenses to contract manufacturers
|
- | 40,444 | ||||||
|
Accrued
expenses
|
9,923 | 9,551 | ||||||
|
Deferred
revenue, current portion
|
10,010 | 19,620 | ||||||
|
Other
current liabilities
|
5,417 | 7,313 | ||||||
|
Total
current liabilities
|
68,374 | 98,092 | ||||||
|
Convertible
subordinated notes
|
214,955 | 315,000 | ||||||
|
Capital
lease obligations
|
20,347 | 21,632 | ||||||
|
Deferred
revenue
|
55,567 | 61,349 | ||||||
|
Deferred
gain
|
5,901 | 8,680 | ||||||
|
Other
long-term liabilities
|
5,238 | 5,911 | ||||||
|
Total
liabilites
|
370,382 | 510,664 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders'
equity:
|
||||||||
|
Preferred
stock
|
- | - | ||||||
|
Common
stock
|
9 | 9 | ||||||
|
Capital
in excess of par value
|
1,312,796 | 1,302,541 | ||||||
|
Accumulated
other comprehensive income
|
1,439 | 1,643 | ||||||
|
Accumulated
deficit
|
(1,124,090 | ) | (1,089,754 | ) | ||||
|
Total
stockholders' equity
|
190,154 | 214,439 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 560,536 | $ | 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)
(unaudited)
|
Twelve-Months Ended December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Cash
flows provided by (used in) operating activities:
|
||||||||
|
Net
loss
|
$ | (34,336 | ) | $ | (32,761 | ) | ||
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||
|
Gain
on sale of pulmonary assets
|
(69,572 | ) | - | |||||
|
Gain
on extinguishment of debt
|
(50,149 | ) | - | |||||
|
Depreciation
and amortization
|
22,489 | 29,028 | ||||||
|
Stock-based
compensation
|
9,871 | 14,779 | ||||||
|
Impairment
of long lived assets
|
1,458 | 28,396 | ||||||
|
Other
non-cash transactions
|
1,251 | 109 | ||||||
|
Changes
in assets and liabilities:
|
||||||||
|
Decrease
(increase) in trade accounts receivable
|
10,476 | 24,318 | ||||||
|
Decrease
(increase) in inventories
|
2,868 | 1,503 | ||||||
|
Decrease
(increase) in other assets
|
1,166 | 7,443 | ||||||
|
Increase
(decrease) in accounts payable
|
6,181 | (3,147 | ) | |||||
|
Increase
(decrease) in accrued compensation
|
(3,382 | ) | 986 | |||||
|
Increase
(decrease) in accrued clinical trial expenses
|
14,727 | 907 | ||||||
|
Increase
(decrease) in accrued expenses to contract manufacturers
|
(40,444 | ) | 40,444 | |||||
|
Increase
(decrease) in accrued expenses
|
(1,332 | ) | (5,200 | ) | ||||
|
Increase
(decrease) in deferred revenue
|
(15,392 | ) | 40,863 | |||||
|
Increase
(decrease) in other liabilities
|
(1,662 | ) | (1,366 | ) | ||||
|
Net
cash provided by (used in) operating activities
|
(145,782 | ) | 146,302 | |||||
|
Cash
flows from investing activities:
|
||||||||
|
Proceeds
from sale of pulmonary assets, net of transaction costs
|
114,831 | - | ||||||
|
Investment
in Pearl Therapeutics
|
(4,236 | ) | - | |||||
|
Purchases
of property and equipment
|
(18,855 | ) | (32,796 | ) | ||||
|
Maturities
of investments
|
587,832 | 591,202 | ||||||
|
Sales
of investments
|
70,396 | 2,057 | ||||||
|
Purchases
of investments
|
(475,316 | ) | (593,118 | ) | ||||
|
Net
cash provided by (used in) investing activities
|
274,652 | (32,655 | ) | |||||
|
Cash
flows from financing activities:
|
||||||||
|
Issuance
of common stock, net of issuance costs
|
384 | 3,780 | ||||||
|
Payments
of loan and capital lease obligations
|
(2,368 | ) | (2,895 | ) | ||||
|
Repayments
of convertible subordinated notes
|
(47,757 | ) | (102,653 | ) | ||||
|
Net
cash used in financing activities
|
(49,741 | ) | (101,768 | ) | ||||
|
Effect
of exchange rates on cash and cash equivalents
|
162 | 654 | ||||||
|
Net
increase in cash and cash equivalents
|
$ | 79,291 | $ | 12,533 | ||||
|
Cash
and cash equivalents at beginning of year
|
76,293 | 63,760 | ||||||
|
Cash
and cash equivalents at end of year
|
$ | 155,584 | $ | 76,293 | ||||