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): July 28, 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:
|
¨
|
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
|
Results
of Operations and Financial
Condition
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On July
28, 2010, Nektar Therapeutics, a Delaware corporation (“Nektar”), issued a press
release (the “Press Release”) announcing its financial results for the
quarter ended June 30, 2010. A copy of the Press Release
is furnished herewith as Exhibit 99.1.
On July
21, 2010, Nektar announced that its management would hold a conference call on
July 28, 2010 to review its financial results for the quarter ended June 30,
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 and potential of Nektar’s advanced polymer chemistry
technology platform, the timing and availability of future results from clinical
development programs, the potential for submitting a New Drug Application
(“NDA”) on an accelerated basis to the Food and Drug Administration (“FDA”)
pending the outcome of future results from an expanded Phase 2 clinical study
which is currently in progress for NKTR-102 in platinum-resistant/refractory
ovarian cancer, the progress of Nektar’s programs currently in the clinic, the
progress and status of preparations to commence Phase 3 trials for NKTR-118 by
AstraZeneca and Amikacin Inhale by Bayer AG, the timing and potential for
completion of certain potential future transactions and agreements, the
commercial potential of drug candidates in development, potential future
revenues that may be realized under one or more of Nektar’s collaboration
agreements, and financial guidance for 2010. These forward-looking
statements involve substantial risks and uncertainties including but not limited
to:
|
|
1.
|
Nektar’s
proprietary drug candidates, including NKTR-118, NKTR-102, Amikacin
Inhale, 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 that can impact drug
development;
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|
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2.
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Approval
of an NDA by the FDA almost always requires the sponsor to conduct Phase 3
clinical studies prior to consideration and approval of an NDA and, as a
result, review and/or approval of an NDA by the FDA based on Phase 2
results for NKTR-102 in platinum-resistant/refractory ovarian cancer prior
to completion of Phase 3 clinical studies would be unusual and is highly
unlikely;
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|
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3.
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The
expansion of the Phase 2 study in women with platinum-resistant/refractory
ovarian cancer will necessarily change the final efficacy results (e.g.
overall response rates, progression-free survival etc.) and safety
observations (i.e. frequency of serious adverse events) for the Phase 2
clinical trial and, as such, the final results from the expanded Phase 2
study remain subject to change and the final results could be materially
and adversely different from the results that Nektar has previously made
available;
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|
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4.
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The
initial preliminary RECIST response data for the NKTR-102 clinical trial
in metastatic breast cancer reported by Nektar in a press release issued
on June 9, 2010 and discussed on the conference call on July 28, 2010 is
subject to substantial change as the trial continues to progress and such
substantial change could be material and adverse—in particular, there is
no way to predict whether unconfirmed responses will become confirmed
responses as the clinical trial progresses and additional patient data
continues to be collected and
confirmed;
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|
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5.
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If
Nektar is unable to establish and maintain collaboration partnerships or
appropriate transaction structures relating to its drug candidates, such
as for NKTR-102, on attractive commercial terms, our business, results of
operations and financial condition could
suffer;
|
|
|
6.
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The
timing of any new collaboration partnerships or other similar transactions
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 significant
transactions;
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|
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7.
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The
timing and/or success of the commencement or end of clinical trials,
including without limitation the anticipated Phase 3 commencement for
NKTR-118 and Amikacin Inhale, may be delayed or unsuccessful due to
regulatory delays, clinical trial design (and regulatory concurrence for
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;
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|
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8.
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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;
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|
|
9.
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The
amount and timing of future payments that may be realized by 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 herein or
incorporated by reference
herein;
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|
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10.
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Management’s
financial projections for 2010 revenue and year-end cash position are
subject to significant risks of unplanned revenue and/or cash short-falls
and unplanned expenses, which could adversely affect Nektar’s actual 2010
annual financial results and year-end cash
position;
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|
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11.
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Nektar’s
patent applications for its proprietary or partner product candidates may
not issue, patents that have issued may not be enforceable, or additional
intellectual property licenses from third parties may be required in the
future;
|
|
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12.
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The
outcome of any existing or future intellectual property or other
litigation related to Nektar’s proprietary product candidates or partner
product candidates is unpredictable and could have a material adverse
effect on our business, results of operations and financial
condition;
|
|
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13.
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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;
and
|
|
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14.
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Other
important risks and uncertainties set forth in Nektar’s Quarterly Report
on Form 10-Q filed with the SEC for the quarter ended March 31,
2010.
|
Actual
results could differ materially from the forward-looking statements made by
management during the conference call and in the Press
Release. 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.
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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
|
|
Press
release titled “Nektar Therapeutics Reports Second Quarter 2010 Financial
Results” issued by Nektar Therapeutics on July 28,
2010.
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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
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||
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General
Counsel and Secretary
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||
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Date:
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July
28, 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 Second Quarter 2010 Financial
Results” issued by Nektar Therapeutics on July 28,
2010.
|
Exhibit 99.1
News
Release
Nektar
Therapeutics Reports Second Quarter 2010 Financial Results
SAN CARLOS, Calif., July 28,
2010 — Nektar Therapeutics (Nasdaq: NKTR) today reported its financial
results for the second quarter ended June 30, 2010.
Cash,
cash equivalents, and short-term investments at June 30, 2010 were $338.2
million as compared to $362.0 million at March 31, 2010.
Revenue
for the second quarter of 2010 increased to $42.6 million as compared to $13.0
million in the second quarter of 2009. The increase in revenue year
over year is largely the result of the amortization of the $125 million
milestone payment received from AstraZeneca in September 2009 under the new
partnership agreement for NKTR-118.
Total
operating costs and expenses in the second quarter of 2010 declined by 6% to
$40.7 million, compared to $43.5 million in the second quarter
2009.
Research
and development expense increased to $25.6 million in the second quarter 2010 as
compared to $24.0 million for the same quarter in 2009. General and
administrative expense was $10.2 million in the second quarter 2010 as compared
to $9.1 million in the second quarter of 2009.
“The
number of drug candidates advanced by Nektar in just three years highlights the
unique potential of our polymer conjugation technology to create a steady stream
of valuable product opportunities,” said Howard W. Robin, President and Chief
Executive Officer of Nektar. “In the second quarter, we reported compelling
Phase 2 data for our lead oncology compound, NKTR-102, in both ovarian and
breast cancer patients. With a deep pipeline in various stages of development,
ranging from preclinical compounds to candidates preparing for Phase 3, Nektar
is well-positioned for continued success in 2010.”
Net loss
for the second quarter ended June 30, 2010 was $0.5 million or $0.01 per share
as compared to a net loss of $32.1 million or $0.35 per share in the second
quarter of 2009.
Conference
Call to Discuss Second Quarter 2010 Financial Results
A
conference call to review results will be held today, Wednesday, July 28, 2010
at 2 PM Pacific Time. To access the conference call, follow these
instructions:
Dial:
(866) 788-0541 (U.S.); (857) 350-1679 (international)
Passcode:
96449158
An audio
replay will also be available shortly following the call through Thursday,
August
12, 2010 and can be accessed by dialing (888) 286-8010 (U.S.); or (617) 801-6888
(international) with a passcode of 67523786.
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
has a robust R&D pipeline of potentially high-value therapeutics in
oncology, pain and other areas. In the area of pain, Nektar has an exclusive
worldwide license agreement with AstraZeneca for Nektar’s oral NKTR-118
development program to treat opioid-induced constipation and its NKTR-119
development program for the treatment of pain without constipation side
effects. The company has additional pain compounds in preclinical
studies. In oncology, NKTR-102, a novel topoisomerase I-inhibitor, is
being evaluated in Phase 2 clinical studies for the treatment of ovarian, breast
and colorectal cancers. NKTR-105, a novel anti-mitotic agent, is in a Phase 1
clinical study in cancer patients with refractory solid tumors.
Nektar's
technology has enabled nine approved products in the U.S. or Europe through
partnerships with leading biopharmaceutical companies, 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 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 additional
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 Quarterly Report on Form
10-Q for the quarter ended June 30, 2010 to be filed on or about July 28, 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 filed on 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)
|
June 30, 2010
|
December 31, 2009 (1)
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 23,244 | $ | 49,597 | ||||
|
Short-term
investments
|
314,976 | 346,614 | ||||||
|
Accounts
receivable
|
9,446 | 4,801 | ||||||
|
Inventory
|
9,777 | 6,471 | ||||||
|
Other
current assets
|
6,363 | 6,183 | ||||||
|
Total
current assets
|
$ | 363,806 | $ | 413,666 | ||||
|
Property
and equipment, net
|
88,223 | 78,263 | ||||||
|
Goodwill
|
76,501 | 76,501 | ||||||
|
Other
assets
|
2,108 | 7,088 | ||||||
|
Total assets
|
$ | 530,638 | $ | 575,518 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 4,627 | $ | 3,066 | ||||
|
Accrued
compensation
|
7,908 | 10,052 | ||||||
|
Accrued
expenses
|
10,189 | 4,354 | ||||||
|
Accrued
clinical trial expenses
|
13,349 | 14,167 | ||||||
|
Deferred
revenue, current portion
|
65,342 | 115,563 | ||||||
|
Other
current liabilities
|
6,051 | 5,814 | ||||||
|
Total
current liabilities
|
$ | 107,466 | $ | 153,016 | ||||
|
Convertible
subordinated notes
|
214,955 | 214,955 | ||||||
|
Capital
lease obligations
|
17,887 | 18,800 | ||||||
|
Deferred
revenue
|
71,910 | 76,809 | ||||||
|
Deferred
gain
|
4,589 | 5,027 | ||||||
|
Other
long-term liabilities
|
4,302 | 4,544 | ||||||
|
Total
liabilities
|
$ | 421,109 | $ | 473,151 | ||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders'
equity:
|
||||||||
|
Preferred
stock
|
$ | - | $ | - | ||||
|
Common
stock
|
9 | 9 | ||||||
|
Capital
in excess of par value
|
1,342,195 | 1,327,942 | ||||||
|
Accumulated
other comprehensive income
|
581 | 1,025 | ||||||
|
Accumulated
deficit
|
(1,233,256 | ) | (1,226,609 | ) | ||||
|
Total
stockholders' equity
|
$ | 109,529 | $ | 102,367 | ||||
|
Total
liabilities and stockholders' equity
|
$ | 530,638 | $ | 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
|
Six Months Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Revenue:
|
||||||||||||||||
|
Product
sales and royalties
|
$ | 11,154 | $ | 10,525 | $ | 14,738 | $ | 16,995 | ||||||||
|
License,
collaboration and other
|
31,409 | 2,463 | 61,062 | 5,704 | ||||||||||||
|
Total
revenue
|
42,563 | 12,988 | 75,800 | 22,699 | ||||||||||||
|
Operating
costs and expenses:
|
||||||||||||||||
|
Cost
of goods sold
|
4,889 | 10,379 | 9,185 | 16,005 | ||||||||||||
|
Research
and development
|
25,600 | 24,002 | 48,886 | 47,365 | ||||||||||||
|
General
and administrative
|
10,207 | 9,087 | 19,220 | 20,107 | ||||||||||||
|
Total
operating costs and expenses
|
40,696 | 43,468 | 77,291 | 83,477 | ||||||||||||
|
Income
(loss) from operations
|
1,867 | (30,480 | ) | (1,491 | ) | (60,778 | ) | |||||||||
|
Non-operating
income (expense):
|
||||||||||||||||
|
Interest
income
|
393 | 950 | 856 | 2,600 | ||||||||||||
|
Interest
expense
|
(2,909 | ) | (2,948 | ) | (5,860 | ) | (6,285 | ) | ||||||||
|
Other
income, net
|
163 | 203 | 187 | 248 | ||||||||||||
|
Total
non-operating expense
|
(2,353 | ) | (1,795 | ) | (4,817 | ) | (3,437 | ) | ||||||||
|
Loss
before provision (benefit) for income taxes
|
(486 | ) | (32,275 | ) | (6,308 | ) | (64,215 | ) | ||||||||
|
Provision
(Benefit) for income taxes
|
31 | (206 | ) | 339 | (339 | ) | ||||||||||
|
Net
loss
|
$ | (517 | ) | $ | (32,069 | ) | $ | (6,647 | ) | $ | (63,876 | ) | ||||
|
Basic
and diluted net loss per share
|
$ | (0.01 | ) | $ | (0.35 | ) | $ | (0.07 | ) | $ | (0.69 | ) | ||||
|
Shares
used in computing basic and diluted net loss per share
|
94,065 | 92,556 | 93,849 | 92,536 | ||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
Six Months Ended June 30,
|
||||||||
|
2010
|
2009
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
loss
|
$ | (6,647 | ) | $ | (63,876 | ) | ||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Depreciation
and amortization
|
8,334 | 7,359 | ||||||
|
Stock-based
compensation
|
8,105 | 4,691 | ||||||
|
Deferred
rent
|
542 | - | ||||||
|
Other
non-cash transactions
|
(747 | ) | 56 | |||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
(4,645 | ) | 2,362 | |||||
|
Inventory
|
(3,306 | ) | (791 | ) | ||||
|
Other
assets
|
(136 | ) | 1,284 | |||||
|
Accounts
payable
|
2,183 | (5,513 | ) | |||||
|
Accrued
compensation
|
(2,144 | ) | (4,687 | ) | ||||
|
Accrued
expenses
|
1,012 | (1,344 | ) | |||||
|
Accrued
clinical trial expenses
|
(818 | ) | (5,512 | ) | ||||
|
Deferred
revenue
|
(55,120 | ) | (4,111 | ) | ||||
|
Other
liabilities
|
(729 | ) | (995 | ) | ||||
|
Net
cash used in operating activities
|
$ | (54,116 | ) | $ | (71,077 | ) | ||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of investments
|
(218,275 | ) | (186,016 | ) | ||||
|
Sales
of investments
|
8,197 | 7,627 | ||||||
|
Maturities
of investments
|
241,256 | 221,948 | ||||||
|
Transaction
costs from Novartis pulmonary asset sale
|
- | (4,440 | ) | |||||
|
Purchases
of property and equipment
|
(8,796 | ) | (7,999 | ) | ||||
|
Net
cash provided by investing activities
|
$ | 22,382 | $ | 31,120 | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Payments
of loan and capital lease obligations
|
(731 | ) | (616 | ) | ||||
|
Proceeds
from issuances of common stock
|
6,148 | 90 | ||||||
|
Net
cash provided by (used in) financing activities
|
$ | 5,417 | $ | (526 | ) | |||
|
Effect
of exchange rates on cash and cash equivalents
|
(36 | ) | (109 | ) | ||||
|
Net
decrease in cash and cash equivalents
|
$ | (26,353 | ) | $ | (40,592 | ) | ||
|
Cash
and cash equivalents at beginning of period
|
49,597 | 155,584 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 23,244 | $ | 114,992 | ||||