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 5, 2010
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:
|
¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
|
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¨
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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 Results
of Operations and Financial Condition
On May 5, 2010, Nektar Therapeutics, a Delaware corporation (“Nektar”),
issued a press release (the “Press Release”) announcing its financial results for the quarter ended
March 31, 2010. A copy of the Press Release is furnished
herewith as Exhibit 99.1.
On April 28, 2010, Nektar
announced that management would hold a conference call on May 5, 2010 to review
its financial results for the
quarter ended March 31, 2010. On this conference call,
management expects to make certain forward-looking statements regarding
pre-clinical and clinical development results and progress for certain of
Nektar’s proprietary drug development programs, the value of Nektar’s advanced
polymer chemistry technology platform, the timing and availability of future
clinical development program results, the commercial potential of drug
candidates in development, potential future revenues that may be realized in the
future under one or more of the Nektar’s collaboration agreements, and
management’s financial guidance for 2010. These forward-looking
statements involve substantial risks and uncertainties including but not limited
to: (i) Nektar’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-102 in ovarian cancer patients in stage 1
announced by Nektar in the quarter ending March 31, 2010, represent preliminary
data only and this data remains subject to final data gathering and analysis
review procedures; (iii) the preliminary results from stage 1 of the NKTR-102
clinical study for ovarian cancer are not necessarily indicative or predictive
of the future results from stage 2 of this clinical study or the results of
NKTR-102 in any of other cancer indications for which it is currently being
studied (i.e. breast and colorectal cancers); (iv) the amount and timing of
future payments that may become payable to Nektar under the license 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 incorporated by reference herein; (v) 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; (vi) scientific discovery of new medical breakthroughs is an
inherently uncertain process and the future success of the application of
Nektar’s technology platforms to potential new drug candidates is therefore very
uncertain and unpredictable and one or more research and development programs
could fail; (vii) management’s financial projections for the Nektar’s 2010
annual revenue and year-end cash position are subject to the significant risk of
unplanned revenue short-falls and unplanned expenses, which could adversely
affect Nektar’s actual 2010 annual financial results and end of year cash
position; (viii) 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; (ix) the outcome of any existing or future intellectual
property or other litigation related to Nektar’s proprietary product candidates
or partner product candidates where Nektar has indemnification responsibility;
(x) the market sizes for Nektar’s proprietary and partnered product programs are
based on management’s current estimates only and actual market sizes may differ
materially and adversely; (xi) if Nektar is unable to establish and maintain
collaboration partnerships (such as for NKTR-102 in 2010) on attractive
commercial terms, our business, results of operations and financial condition
could suffer; (xii) the timing of any new collaboration partnerships is
difficult to predict due to availability of clinical data, the number of
potential partners that need to complete due diligence and approval processes,
and numerous other unpredictable factors that can delay, impede or prevent
partnering transactions; and (xiii) certain other important risks and
uncertainties set forth in Nektar’s Annual Report on Form 10-K for the year
ended December 31, 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. Nektar
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
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Exhibit
No.
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|
Description
|
|
99.1
|
|
Press release titled
“Nektar Therapeutics Reports First Quarter 2010 Financial
Results” issued by Nektar Therapeutics
on May 5, 2010.
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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:
|
/s/
Gil M. Labrucherie
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||
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Gil
M. Labrucherie
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|||
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General
Counsel and Secretary
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|||
|
Date:
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May
5,
2010
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EXHIBIT
INDEX
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Exhibit
No.
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|
Description
|
|
99.1
|
|
Press release titled
“Nektar Therapeutics Reports First Quarter 2010 Financial
Results” issued by Nektar Therapeutics
on May 5, 2010.
|
Exhibit 99.1
News
Release
Nektar Therapeutics Reports First Quarter 2010 Financial Results
SAN CARLOS, Calif., May 5,
2010 — Nektar Therapeutics (Nasdaq: NKTR) today reported its financial
results for the first quarter ended March 31, 2010.
Cash,
cash equivalents, and short-term investments at March 31, 2010 were $362.0
million as compared to $396.2 million at December 31, 2009.
Revenue
for the first quarter of 2010 increased to $33.2 million as compared to $9.7
million in the first quarter of 2009. The increase in revenue year
over year is largely the result of the amortization of the $125.0 million
milestone payment received from AstraZeneca in September 2009 under the new
partnership agreement for NKTR-118.
Total
operating costs and expenses in the first quarter of 2010 declined by 9% to
$36.6 million, compared to $40.0 million in the first quarter 2009.
Research
and development expense was $23.3 million in the first quarter 2010 as compared
to $23.4 million for the same quarter in 2009. General and
administrative expense declined to $9.0 million in the first quarter 2010 from
$11.0 million in the first quarter of 2009.
“We are
excited about our product opportunities in pain and oncology generated by
Nektar’s
advanced polymer conjugate technology platform,” said
Howard W. Robin, President and Chief Executive Officer of
Nektar. “In
particular, we are pleased with the recent recognition that NKTR-102 has
received from the oncology community with the acceptance of our NKTR-102 Phase 2
ovarian data for oral presentation
at the 2010 American Society of Clinical Oncology meeting in
June.”
Net loss
for the first quarter ended March 31, 2010 was $6.1 million or $0.07 loss per
share as compared to a net loss of $31.8 million or $0.34 loss per share in the
first quarter of 2009.
Conference
Call to Discuss First Quarter 2010 Financial Results
A
conference call to review results will be held today, Wednesday, May 5, 2010 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 5,
2010.
To access the
conference call, follow
these instructions:
Dial:
(866) 783-2146 (U.S.); (857) 350-1605 (international)
Passcode:
61205652 (Nektar is the
host)
An audio
replay will also be available shortly following the call through Thursday,
May 20,
2010 and can be accessed by dialing (888) 286-8010 (U.S.); or (617) 801-6888
(international) with a passcode of
12368379.
In the event that any non-GAAP financial
measure is discussed on the conference call that is not described in the press
release, or explained on the conference call, related information
will be made available on the Investor Relations page at the Nektar website as
soon as practical after the conclusion of the conference
call.
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(R) for Crohn's disease and rheumatoid arthritis, Roche's
PEGASYS(R) for hepatitis C and Amgen's Neulasta(R) 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. In addition to the releasable polymer technology,
Nektar is the first company to create a permanent small molecule-polymer
conjugate with enhanced oral bioavailability and restricted entry into the CNS.
Nektar is 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 is being evaluated in Phase 2
clinical studies for the treatment of ovarian, breast and colorectal cancers.
NKTR-105 is 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 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 for the year ended December 31, 2009 filed on March 2, 2010,
the Current Report on Form 8-K filed today, and the most recent Quarterly
Report on Form 10-Q for the quarter ended March 31, 2010 to be filed on or about
May 5, 2010. 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.
Nektar
Investor Inquiries:
Jennifer
Ruddock/Nektar Therapeutics
(650)
631-4954
Susan
Noonan/SA Noonan Communications, LLC
(212)
966-3650
Nektar
Media Inquiries:
Karen
Bergman/BCC Partners
(650)
575-1509
Michelle Corral/BCC
Partners
(415) 794-8662
# # #
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(unaudited)
|
|
March 31, 2010
|
December
31, 2009 (1)
|
||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 20,572 | $ | 49,597 | ||||
|
Short-term
investments
|
341,386 | 346,614 | ||||||
|
Accounts
receivable, net of allowance
|
7,709 | 4,801 | ||||||
|
Inventory
|
8,703 | 6,471 | ||||||
|
Other
current assets
|
7,101 | 6,183 | ||||||
|
Total
current assets
|
$ | 385,471 | $ | 413,666 | ||||
|
Property
and equipment, net
|
82,650 | 78,263 | ||||||
|
Goodwill
|
76,501 | 76,501 | ||||||
|
Other
assets
|
3,887 | 7,088 | ||||||
|
Total assets
|
$ | 548,509 | $ | 575,518 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 5,664 | $ | 3,066 | ||||
|
Accrued
compensation
|
5,704 | 10,052 | ||||||
|
Accrued
clinical trial expenses
|
13,615 | 14,167 | ||||||
|
Accrued
expenses
|
5,708 | 4,354 | ||||||
|
Deferred
revenue, current portion
|
90,465 | 115,563 | ||||||
|
Other
current liabilities
|
4,489 | 5,814 | ||||||
|
Total
current liabilities
|
$ | 125,645 | $ | 153,016 | ||||
|
Convertible
subordinated notes
|
214,955 | 214,955 | ||||||
|
Capital
lease obligations
|
18,352 | 18,800 | ||||||
|
Deferred
revenue
|
75,339 | 76,809 | ||||||
|
Deferred
gain
|
4,808 | 5,027 | ||||||
|
Other
long-term liabilities
|
4,656 | 4,544 | ||||||
|
Total
liabilities
|
$ | 443,755 | $ | 473,151 | ||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders'
equity:
|
||||||||
|
Preferred
stock
|
$ | - | $ | - | ||||
|
Common
stock
|
9 | 9 | ||||||
|
Capital
in excess of par value
|
1,336,462 | 1,327,942 | ||||||
|
Accumulated
other comprehensive income
|
1,022 | 1,025 | ||||||
|
Accumulated
deficit
|
(1,232,739 | ) | (1,226,609 | ) | ||||
|
Total
stockholders' equity
|
$ | 104,754 | $ | 102,367 | ||||
|
Total
liabilities and stockholders' equity
|
$ | 548,509 | $ | 575,518 | ||||
(1) The
consolidated balance sheet at December 31, 2009 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.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share information)
(unaudited)
|
Three Months Ended March 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Revenue:
|
||||||||
|
Product
sales and royalties
|
$ | 3,584 | $ | 6,470 | ||||
|
License,
collaboration, and other
|
29,653 | 3,241 | ||||||
|
Total
revenue
|
33,237 | 9,711 | ||||||
|
Operating
costs and expenses:
|
||||||||
|
Cost
of goods sold
|
4,296 | 5,626 | ||||||
|
Research
and development
|
23,286 | 23,363 | ||||||
|
General
and administrative
|
9,013 | 11,020 | ||||||
|
Total
operating costs and expenses
|
36,595 | 40,009 | ||||||
|
Loss
from operations
|
(3,358 | ) | (30,298 | ) | ||||
|
Non-operating
income (expense):
|
||||||||
|
Interest
income
|
463 | 1,650 | ||||||
|
Interest
expense
|
(2,951 | ) | (3,337 | ) | ||||
|
Other
income (expense), net
|
24 | 45 | ||||||
|
Total
non-operating expense
|
(2,464 | ) | (1,642 | ) | ||||
|
Loss
before provision for income taxes
|
(5,822 | ) | (31,940 | ) | ||||
|
Provision
for (benefit from) income taxes
|
308 | (133 | ) | |||||
|
Net
loss
|
$ | (6,130 | ) | $ | (31,807 | ) | ||
|
Basic
and diluted net loss per share
|
$ | (0.07 | ) | $ | (0.34 | ) | ||
|
Shares
used in computing basic and diluted net loss per share
|
93,631 | 92,516 | ||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(unaudited)
|
Three Months Ended March 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Cash
flows from operating activities:
|
$ | (6,130 | ) | $ | (31,807 | ) | ||
|
Net
loss
|
||||||||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Depreciation
and amortization
|
4,149 | 3,615 | ||||||
|
Stock-based
compensation
|
3,744 | 2,325 | ||||||
|
Other
non-cash transactions
|
(235 | ) | 115 | |||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
(2,908 | ) | 5,365 | |||||
|
Inventory
|
(2,232 | ) | (4,073 | ) | ||||
|
Other
assets
|
(883 | ) | 496 | |||||
|
Accounts
payable
|
1,748 | (8,095 | ) | |||||
|
Accrued
compensation
|
(4,348 | ) | (6,133 | ) | ||||
|
Accrued
clinical trial expenses
|
(552 | ) | (2,640 | ) | ||||
|
Accrued
expenses
|
1,354 | 3,364 | ||||||
|
Deferred
revenue
|
(26,568 | ) | (3,029 | ) | ||||
|
Other
liabilities
|
(1,302 | ) | (1,897 | ) | ||||
|
Net
cash used in operating activities
|
$ | (34,163 | ) | $ | (42,394 | ) | ||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of investments
|
(115,277 | ) | (85,298 | ) | ||||
|
Maturities
of investments
|
112,074 | 104,458 | ||||||
|
Sales
of investments
|
8,197 | - | ||||||
|
Purchases
of property and equipment
|
(3,973 | ) | (5,104 | ) | ||||
|
Transaction
costs from Novartis pulmonary asset sale
|
- | (4,766 | ) | |||||
|
Net
cash provided by investing activities
|
$ | 1,021 | $ | 9,290 | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Payments
of loan and capital lease obligations
|
(359 | ) | (302 | ) | ||||
|
Proceeds
from issuances of common stock
|
4,776 | 61 | ||||||
|
Net
cash provided by (used in) financing activities
|
$ | 4,417 | $ | (241 | ) | |||
|
Effect
of exchange rates on cash and cash equivalents
|
(300 | ) | 61 | |||||
|
Net
decrease in cash and cash equivalents
|
$ | (29,025 | ) | $ | (33,284 | ) | ||
|
Cash
and cash equivalents at beginning of period
|
49,597 | 155,584 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 20,572 | $ | 122,300 | ||||