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): May 6, 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))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02 
 Results of Operations and Financial Condition

On May 6, 2009, Nektar Therapeutics issued a press release (the “Press Release”) announcing its financial results for the first quarter ended March 31, 2009.  A copy of the Press Release is furnished herewith as Exhibit 99.1.
 
On April 29, 2009, the company announced that management would hold a conference call on May 6, 2009 to review its financial results for the quarter ended March 31, 2009 and provide an update on the company’s business.  On this conference call, management expects to make certain forward-looking statements regarding certain pre-clinical and clinical development results and progress for certain of the company’s proprietary drug development programs, the value of the company’s technology platform, and management’s financial guidance for 2009.  These forward-looking statements involve substantial risks and uncertainties including but not limited to:  (i) the company’s proprietary drug candidates, including NKTR-118, NKTR-102 and NKTR-105, are in early to mid-stage clinical development and the risk of failure remains high and can unexpectedly occur at any stage prior to regulatory approval due to lack of efficacy, safety issues or other factors; (ii) the preliminary Phase 2 results for NKTR-118 presented by management on the conference call remain subject to change based on completion of the final data gathering and analysis; (iii) the timing or success of the commencement or end of clinical trials and commercial launch of new drugs may be delayed or unsuccessful due to regulatory delays, clinical trial design, slower than anticipated patient enrollment, drug manufacturing challenges, changing standards of care, clinical outcomes, or delay or failure in obtaining regulatory approval in one or more important markets;  (iv) scientific discovery of new medical breakthroughs is an inherently uncertain process and the future success of the application of the company’s technology platforms to potential new drug candidates is therefore very uncertain and unpredictable; (v) clinical trials are long, expensive and uncertain processes and the risk of failure of any drug candidate 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; (vi) management’s financial projections for the company’s 2009 annual revenue, cash used in operations and year-end cash position are subject to the significant risk of unplanned revenue short-falls and unplanned expenses, which could adversely affect the company’s actual 2009 annual financial results and end of year cash position; (vii) 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; (viii) the outcome of any existing or future intellectual property or other litigation related to the company’s proprietary product candidates; (ix) the market sizes and revenue potential of the company’s proprietary and partnered product programs are management’s current estimates only and actual market sizes may differ materially; (x) the overall market size for the partnered product programs and revenue and profit contribution potential to the company will depend upon successful sales and marketing efforts by our partners, competition from competing therapies (if any), government and private insurance reimbursement, changing standards of care, commercial product profile and final product pricing; (xi) if the company is unable to establish and maintain collaboration partnerships on attractive commercial terms, our business, results of operations and financial condition could suffer; and (xii) certain other important risks and uncertainties set forth in the company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2009 and the company’s most recent Quarterly Report on Form 10-Q to be filed on or about May 8, 2009.  Actual results could differ materially from the forward-looking statements made by management during the conference call and in the press release attached as Exhibit 99.1 hereto.  The company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.
 
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.

Item 9.01
 
Financial Statements and Exhibits
Exhibit No.
 
Description
99.1
 
Press release titled Nektar Therapeutics Reports First Quarter 2009 Financial Results issued on May 6, 2009.


 
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/ Gil M. Labrucherie
   
 Gil M. Labrucherie
   
 General Counsel and Secretary
   
Date:
 
May 6, 2009


Unassociated Document
 
News Release

Nektar Therapeutics Reports First Quarter 2009 Financial Results
 
SAN CARLOS, Calif., May 6, 2009 — Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the first quarter ended March 31, 2009.
 
Net loss for the quarter ended March 31, 2009 was $31.8 million or $0.34 per share, compared to net loss of $40.7 million or $0.44 per share in the first quarter of 2008.
 
Nektar made improvements to its operating efficiencies as compared to a year ago. Total operating costs and expenses were down 35% to $40.0 million in the first quarter of 2009 as compared to $61.9 million in the first quarter of 2008.
 
 “Nektar continues to make great progress advancing our clinical pipeline and delivering on our objectives in the first quarter of 2009,” stated Howard W. Robin, President and Chief Executive Officer of Nektar.  “Our recently reported positive Phase 2 data for NKTR-118 provides the first clinical validation of our advanced polymer conjugate technology with oral small molecule drugs.  With a robust clinical pipeline and a proven technology platform, Nektar is well-positioned to enter into strategic, high-value partnerships and capitalize on multiple new product opportunities generated by our platform.”
 
Research and development expense was $23.9 million in the first quarter of 2009 as compared to $37.4 million for the same quarter in 2008.  Included in the $23.9 million of overall research and development spending is approximately $13.5 million of investment in Nektar preclinical and clinical development programs.
 
Revenue for the three month period ended March 31, 2009 was $9.7 million compared to revenue of $20.0 million in the first quarter of 2008.  This decrease in revenue is primarily the result of lower contract research and manufacturing revenues resulting from the sale of certain of the company’s pulmonary assets to Novartis.
 
Cash, cash equivalents, and short-term investments at March 31, 2009 were $325.3 million.
 
Conference Call to Discuss First Quarter 2009 Financial Results
 
A conference call to review results will be held on May 6, 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 Wednesday, May 6, 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: 888.396.2369 (U.S.); 617.847.8710 (international)
Participant Passcode: 82263149 (Howard Robin is the host)
 
An audio replay will also be available shortly after the call and will remain so through May 20, 2009.

To access the replay, follow these instructions:
Dial: 888-286-8010 (U.S.); 617-801-6888 (international)
Participant Passcode: 19053055

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 management’s current views regarding the progress and potential of the company's pipeline of proprietary drug candidates, the value and potential of the company's technology platform, and the company’s position to enter into new strategic collaborations with third parties.  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, without limitation, 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; (iv) the outcome of any future intellectual property or other litigation related to the company's proprietary product candidates or complex commercial agreements; (v) if the company is unable to establish and maintain collaboration partnerships on attractive commercial terms, our business, results of operations and financial condition could suffer; and (vi) certain other important risks and uncertainties set forth in the company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2009 and the company’s most recent Quarterly Report on Form 10-Q to be filed on or about May 8, 2009.  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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)

   
March 31, 2009
   
December 31, 2008(1)
 
ASSETS
                                                   
Current assets:
           
Cash and cash equivalents
  $ 122,300     $ 155,584  
Short-term investments
    202,999       223,410  
Accounts receivable, net of allowance
    5,796       11,161  
Inventory
    13,392       9,319  
Other current assets
    6,108       6,746  
Total current assets
    350,595       406,220  
                 
Property and equipment, net
    75,020       73,578  
Goodwill
    76,501       76,501  
Other assets
    3,823       4,237  
Total  assets
  $ 505,939     $ 560,536  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
Accounts payable
  $ 2,675     $ 13,832  
Accrued compensation
    5,437       11,570  
Accrued clinical trial expenses
    14,982       17,622  
Accrued expenses
    11,583       9,923  
Deferred revenue, current portion
    8,416       10,010  
Interest payable
    58       1,805  
Other current liabilities
    3,486       3,612  
Total current liabilities
    46,637       68,374  
                 
Convertible subordinated notes
    214,955       214,955  
Capital lease obligations
    19,989       20,347  
Deferred revenue
    54,132       55,567  
Deferred gain
    5,682       5,901  
Other long-term liabilities
    5,270       5,238  
Total liabilities
    346,665       370,382  
                 
Commitments and contingencies
               
                 
Stockholders' equity:
               
Preferred stock
    -       -  
Common stock
    9       9  
Capital in excess of par value
    1,315,182       1,312,796  
Accumulated other comprehensive income (loss)
    (20 )     1,439  
Accumulated deficit
    (1,155,897 )     (1,124,090 )
Total stockholders' equity
    159,274       190,154  
Total liabilities and stockholders' equity
  $ 505,939     $ 560,536  

(1) The consolidated balance sheet at December 31, 2008 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 2008 amounts have been reclassified between line items to conform with the 2009 presentation.



NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
(unaudited)

   
Three-Months Ended March 31,
 
   
2009
   
2008
 
Revenue:
           
Product sales and royalties
  $ 6,470     $ 10,371  
Collaboration and other
    3,241       9,621  
Total revenue
    9,711       19,992  
                 
Operating costs and expenses:
               
Cost of goods sold
    5,099       7,227  
Other cost of revenue
    -       5,334  
Research and development
    23,890       37,373  
General and administrative
    11,020       11,947  
Total operating costs and expenses
    40,009       61,881  
                 
Loss from operations
    (30,298 )     (41,889 )
                 
Non-Operating income (expense):
               
Interest income
    1,650       5,013  
Interest expense
    (3,337 )     (3,918 )
Other Income
    45       302  
Total non-operating income (expense)
    (1,642 )     1,397  
                 
Loss before provision for income taxes
    (31,940 )     (40,492 )
Provision (benefit) for income taxes
    (133 )     213  
Net income (loss)
  $ (31,807 )   $ (40,705 )
                 
Basic and diluted net earnings (loss) per share
  $ (0.34 )   $ (0.44 )
                 
Shares used in computing basic and diluted net earnings (loss) per share
    92,516       92,330  


 
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share information)
(unaudited)

   
Three-Months Ended March 31,
 
   
2009
   
2008
 
Cash flows used in operating activities:
           
Net loss
  $ (31,807 )   $ (40,705 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation and amortization
    3,615       5,917  
Stock-based compensation
    2,325       1,084  
Other non-cash transactions
    115       (112 )
Changes in assets and liabilities:
               
Decrease (increase) in trade accounts receivable
    5,365       7,597  
Decrease (increase) in inventories
    (4,073 )     1,160  
Decrease (increase) in other assets
    496       2,044  
Increase (decrease) in accounts payable
    (8,095 )     (2,033 )
Increase (decrease) in accrued compensation
    (6,133 )     (3,932 )
Increase (decrease) in accrued clinical trial expenses
    (2,640 )     86  
Increase (decrease) in accrued expenses to contract manufacturers
    -       (31,994 )
Increase (decrease) in accrued expenses
    3,364       (123 )
Increase (decrease) in deferred revenue
    (3,029 )     (1,200 )
Increase (decrease) in other liabilities
    (1,897 )     (2,761 )
Net cash used in operating activities
    (42,394 )     (64,972 )
                 
Cash flows from investing activities:
               
Purchases of property and equipment
    (5,104 )     (5,281 )
Purchases of investments
    (85,298 )     (156,092 )
Maturities of investments
    104,458       186,758  
Transaction costs from Novartis pulmonary asset sale
    (4,766 )     -  
Net cash provided by investing activities
    9,290       25,385  
                 
Cash flows used in financing activities:
               
Proceeds from issuances of common stock
    61       371  
Payments of loan and capital lease obligations
    (302 )     (411 )
Net cash used in financing activities
    (241 )     (40 )
Effect of exchange rates on cash and cash equivalents
    61       10  
Net decrease in cash and cash equivalents
  $ (33,284 )   $ (39,617 )
Cash and cash equivalents at beginning of period
  $ 155,584     $ 76,293  
Cash and cash equivalents at end of period
  $ 122,300     $ 36,676