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 4, 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
November 4, 2009, Nektar Therapeutics issued a press release (the “Press
Release”) announcing its financial results for the third quarter ended September
30, 2009. A copy of the Press Release is furnished herewith as
Exhibit 99.1.
On
October 30, 2009, the company announced that management would hold a conference
call on November 4, 2009 to review its financial results for the third quarter
ended September 30, 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 pegylation and advanced polymer
chemistry technology platform, potential future revenues that may be realized in
the future under certain of the company’s collaboration agreements, 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
amount and timing of future payments that may become payable to the company
under the agreement with AstraZeneca for NKTR-118 and NKTR-119 is subject to a
number of development, regulatory and commercial risks such as the risk of
failure to obtain regulatory approval for NKTR-118 and/or NKTR-119
based on safety, efficacy or other issues, the risk of a lack of government or
private insurance reimbursement limiting commercial potential, the risk of
competition from alternative competing therapies, and other important risks and
uncertainties described or referenced herein; (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 based
on 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 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, the company’s most
recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, and
the company’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2009 expected to be filed by the company on or about November 5,
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 Third Quarter 2009 Financial
Results” issued on
November
4, 2009.
|
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:
|
November
4, 2009
|
||
News
Release
Nektar
Therapeutics Reports Third Quarter 2009 Financial Results
SAN CARLOS, Calif., November 4,
2009 — Nektar Therapeutics (Nasdaq: NKTR) today reported its financial
results for the third quarter ended September 30, 2009.
Net loss
for the quarter ended September 30, 2009 improved to $31.0 million or $0.33 per
share, as compared to a net loss of $37.0 million or $0.40 per share in the
third quarter of 2008.
Nektar
continued to make improvements to its operating efficiencies as compared to a
year ago. Total operating costs and expenses were down 30% to $39.1
million in the third quarter of 2009 as compared to $56.0 million in the third
quarter of 2008. For the first nine months of 2009, total operating
costs and expenses were down 29% to $122.6 million as compared to $171.6 million
in the first nine months of 2008.
“We are
extremely pleased with our success in the third quarter,” said Howard W. Robin,
President and Chief Executive Officer of Nektar. “We signed a landmark
collaboration with AstraZeneca for NKTR-118 and NKTR-119 that highlights the
compelling value we are creating in our clinical pipeline. We are
also making great progress with NKTR-102, with enrollment in our Phase 2
ovarian cancer study completed ahead of schedule. Our clinical
results continue to validate the potential of Nektar’s proprietary advanced
polymer conjugate technology in creating important new
therapeutics.”
Research
and development expense was $23.5 million in the third quarter of 2009 as
compared to $38.3 million for the same quarter in 2008. For the first
nine months of 2009, research and development expense was $71.5 million as
compared to $109.1 million in the same period in 2008. Included in
the $71.5 million of overall research and development expenses in the first nine
months of 2009 is approximately $40.0 million of investment in Nektar
preclinical and clinical development programs.
Revenue
for the three month period ended September 30, 2009 was $10.2 million compared
to revenue of $21.4 million in the third quarter of 2008. Revenue
year-to-date September 30, 2009 was $32.9 million as compared to revenue of
$61.8 million in the same period in 2008. This decrease in revenue is
largely the result of lower contract research and manufacturing revenues
primarily resulting from the sale of certain of the company’s pulmonary assets
to Novartis which occurred on December 31, 2008.
Cash,
cash equivalents, and short-term investments at September 30, 2009 were $275.7
million. Not included in this cash balance is the cash payment of
$125 million received from AstraZeneca in October 2009 as a result of the
collaboration for NKTR-118 and NKTR-119.
Conference
Call to Discuss Third Quarter 2009 Financial Results
A
conference call to review results will be held today, Wednesday, November 4,
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, November 4,
2009.
To
access the conference call, follow these instructions:
Dial:
866-356-3095 (U.S.); 617-597-5391 (international)
Passcode:
27967367
An audio
replay will also be available shortly following the call through Wednesday,
November 18, 2009 and can be accessed by dialing 888-286-8010 (U.S.); or
617-801-6888 (international) with a passcode of 60261022.
About
Nektar
Nektar
Therapeutics is a biopharmaceutical company developing novel therapeutics based
on its PEGylation and advanced polymer conjugation technology platforms.
Nektar's technology and drug development expertise have enabled nine approved
products in the U.S. or Europe for leading biopharmaceutical company partners,
including UCB's Cimzia® for Crohn’s disease and rheumatoid arthritis, Roche's
PEGASYS® for hepatitis C and Amgen's Neulasta® for neutropenia. Nektar has
created a robust pipeline of potentially high-value therapeutics to address
unmet medical needs by leveraging and expanding its technology platforms to
improve and enable molecules. Nektar is also currently conducting clinical
and preclinical programs in oncology, pain and other therapeutic areas.
Nektar recently entered into an exclusive worldwide license agreement with
AstraZeneca for its oral NKTR-118 program to treat opioid-induced constipation
and its NKTR-119 program for the treatment of pain without constipation side
effects. NKTR-102, PEGylated irinotecan, is currently being evaluated in
Phase 2 clinical studies for the treatment of ovarian, breast and colorectal
cancers. NKTR-105, PEGylated docetaxel, is currently in a Phase 1 clinical
study in cancer patients with refractory solid tumors.
Nektar is
headquartered in San Carlos, California, with additional R&D operations in
Huntsville, Alabama and Hyderabad, India. Further information about the
company and its drug development programs and capabilities may be found online
at http://www.nektar.com.
# #
#
This
press release contains forward-looking statements that reflect management’s
current views regarding the progress and potential of Nektar's pipeline of
proprietary drug candidates, the value and potential of the Nektar's technology
platform, and the value and potential of certain of Nektar’s collaborations with
third parties. These forward-looking statements involve numerous risks and
uncertainties, including but not limited to: (i) Nektar'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 even after initial
preclinical and clinical results have been positive; (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) Nektar'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 Nektar's proprietary
product candidates or complex commercial agreements; (v) if Nektar 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 Nektar’s Annual
Report on Form 10-K filed with the Securities and Exchange Commission on March
6, 2009, the Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
filed on August 5, 2009, the Current Report on Form 8-K filed today,
and the most recent Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009 to be filed on or about November 5, 2009. Actual
results could differ materially from the forward-looking statements contained in
this press release. Nektar undertakes no obligation to update
forward-looking statements, whether as a result of new information, future
events or otherwise.
Contacts:
Jennifer
Ruddock
Nektar
Therapeutics
650-631-4954
Susan
Noonan
The SAN
Group
212-966-3650
###
NEKTAR
THERAPEUTICS
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(unaudited)
|
September 30, 2009
|
December 31, 2008(1)
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 32,777 | $ | 155,584 | ||||
|
Short-term
investments
|
242,901 | 223,410 | ||||||
|
Accounts
receivable, net of allowance
|
6,330 | 11,161 | ||||||
|
Inventory
|
8,930 | 9,319 | ||||||
|
Other
current assets
|
7,275 | 6,746 | ||||||
|
Total
current assets
|
$ | 298,213 | $ | 406,220 | ||||
|
Property
and equipment, net
|
74,624 | 73,578 | ||||||
|
Goodwill
|
76,501 | 76,501 | ||||||
|
Other
assets
|
3,313 | 4,237 | ||||||
|
Total assets
|
$ | 452,651 | $ | 560,536 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 6,397 | $ | 13,832 | ||||
|
Accrued
compensation
|
9,711 | 11,570 | ||||||
|
Accrued
clinical trial expenses
|
13,012 | 17,622 | ||||||
|
Accrued
expenses
|
7,132 | 9,923 | ||||||
|
Deferred
revenue, current portion
|
9,547 | 10,010 | ||||||
|
Other
current liabilities
|
3,558 | 5,417 | ||||||
|
Total
current liabilities
|
$ | 49,357 | $ | 68,374 | ||||
|
Convertible
subordinated notes
|
214,955 | 214,955 | ||||||
|
Capital
lease obligations
|
19,228 | 20,347 | ||||||
|
Deferred
revenue
|
53,308 | 55,567 | ||||||
|
Deferred
gain
|
5,245 | 5,901 | ||||||
|
Other
long-term liabilities
|
4,458 | 5,238 | ||||||
|
Total
liabilities
|
$ | 346,551 | $ | 370,382 | ||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders'
equity:
|
||||||||
|
Preferred
stock
|
$ | - | $ | - | ||||
|
Common
stock
|
9 | 9 | ||||||
|
Capital
in excess of par value
|
1,323,907 | 1,312,796 | ||||||
|
Accumulated
other comprehensive income
|
1,117 | 1,439 | ||||||
|
Accumulated
deficit
|
(1,218,933 | ) | (1,124,090 | ) | ||||
|
Total
stockholders' equity
|
$ | 106,100 | $ | 190,154 | ||||
|
Total
liabilities and stockholders' equity
|
$ | 452,651 | $ | 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.
NEKTAR
THERAPEUTICS
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share information)
(unaudited)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Revenue:
|
||||||||||||||||
|
Product
sales and royalties
|
$ | 7,461 | $ | 9,474 | $ | 24,456 | $ | 28,855 | ||||||||
|
Collaboration
and other
|
2,762 | 11,965 | 8,466 | 32,977 | ||||||||||||
|
Total
revenue
|
10,223 | 21,439 | 32,922 | 61,832 | ||||||||||||
|
Operating
costs and expenses:
|
||||||||||||||||
|
Cost
of goods sold
|
5,691 | 5,349 | 21,021 | 18,020 | ||||||||||||
|
Other
cost of revenue
|
- | - | 6,821 | |||||||||||||
|
Research
and development
|
23,474 | 38,265 | 71,514 | 109,138 | ||||||||||||
|
General
and administrative
|
9,917 | 12,386 | 30,024 | 37,661 | ||||||||||||
|
Total
operating costs and expenses
|
39,082 | 56,000 | 122,559 | 171,640 | ||||||||||||
|
Loss
from operations
|
(28,859 | ) | (34,561 | ) | (89,637 | ) | (109,808 | ) | ||||||||
|
Non-operating
income (expense):
|
||||||||||||||||
|
Interest
income
|
560 | 2,375 | 3,160 | 10,578 | ||||||||||||
|
Interest
expense
|
(2,928 | ) | (3,988 | ) | (9,213 | ) | (11,835 | ) | ||||||||
|
Other
income (expense), net
|
120 | (588 | ) | 368 | 483 | |||||||||||
|
Total
non-operating income (expense)
|
(2,248 | ) | (2,201 | ) | (5,685 | ) | (774 | ) | ||||||||
|
Loss
before provision for income taxes
|
(31,107 | ) | (36,762 | ) | (95,322 | ) | (110,582 | ) | ||||||||
|
(Benefit)
provision for income taxes
|
(140 | ) | 276 | (479 | ) | 536 | ||||||||||
|
Net
loss
|
$ | (30,967 | ) | $ | (37,038 | ) | $ | (94,843 | ) | $ | (111,118 | ) | ||||
|
Basic
and diluted net loss per share
|
$ | (0.33 | ) | $ | (0.40 | ) | $ | (1.02 | ) | $ | (1.20 | ) | ||||
|
Shares
used in computing basic and diluted net loss per share
|
92,789 | 92,425 | 92,621 | 92,413 | ||||||||||||
NEKTAR
THERAPEUTICS
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(unaudited)
|
Nine Months Ended September 30,
|
||||||||
|
2009
|
2008
|
|||||||
|
Cash
flows from operating activities:
|
$ | (94,843 | ) | $ | (111,118 | ) | ||
|
Net
loss
|
||||||||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Depreciation
and amortization
|
11,076 | 18,610 | ||||||
|
Stock-based
compensation
|
7,290 | 6,955 | ||||||
|
Other
non-cash transactions
|
(124 | ) | 759 | |||||
|
Changes
in assets and liabilities:
|
||||||||
|
Decrease
(increase) in trade accounts receivable
|
4,505 | 13,122 | ||||||
|
Decrease
(increase) in inventory
|
389 | 2,326 | ||||||
|
Decrease
(increase) in other assets
|
(1,272 | ) | 2,659 | |||||
|
Increase
(decrease) in accounts payable
|
(4,047 | ) | (1,476 | ) | ||||
|
Increase
(decrease) in accrued compensation
|
(1,859 | ) | (229 | ) | ||||
|
Increase
(decrease) in accrued clinical trial expenses
|
(4,610 | ) | 4,659 | |||||
|
Increase
(decrease) in accrued expenses
|
(1,413 | ) | (1,390 | ) | ||||
|
Increase
(decrease) in accrued expenses to contract manufacturers
|
- | (40,444 | ) | |||||
|
Increase
(decrease) in deferred revenue
|
(2,722 | ) | (11,972 | ) | ||||
|
Increase
(decrease) in other liabilities
|
(2,823 | ) | 2,474 | |||||
|
Net
cash used in operating activities
|
$ | (90,453 | ) | $ | (115,065 | ) | ||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of investments
|
(298,054 | ) | (411,417 | ) | ||||
|
Sales
of investments
|
11,923 | 28,590 | ||||||
|
Maturities
of investments
|
266,202 | 506,348 | ||||||
|
Purchases
of property and equipment
|
(10,763 | ) | (15,064 | ) | ||||
|
Transaction
costs from Novartis pulmonary asset sale
|
(4,440 | ) | - | |||||
|
Investment
in Pearl Therapeutics Inc.
|
- | (4,236 | ) | |||||
|
Net
cash (used in) provided by investing activities
|
$ | (35,132 | ) | $ | 104,221 | |||
|
Cash
flows from financing activities:
|
||||||||
|
Payments
of loan and capital lease obligations
|
(935 | ) | (1,910 | ) | ||||
|
Proceeds
from issuances of common stock
|
3,821 | 477 | ||||||
|
Net
cash provided by (used in) financing activities
|
$ | 2,886 | $ | (1,433 | ) | |||
|
Effect
of exchange rates on cash and cash equivalents
|
(108 | ) | (303 | ) | ||||
|
Net
decrease in cash and cash equivalents
|
$ | (122,807 | ) | $ | (12,580 | ) | ||
|
Cash
and cash equivalents at beginning of period
|
155,584 | 76,293 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 32,777 | $ | 63,713 | ||||