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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, 2021

 

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.)

 

455 Mission Bay Boulevard South

San Francisco, California 94158

(Address of Principal Executive Offices and Zip Code)

 

Registrant’s telephone number, including area code: (415) 482-5300

 

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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbol(s)   Name of each exchange on which registered
Common Stock, $0.0001 par value   NKTR   NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On November 4, 2021, Nektar Therapeutics, a Delaware corporation (“Nektar”), issued a press release (the “Press Release”) announcing its financial results for the quarter ended September 30, 2021. A copy of the Press Release is furnished herewith as Exhibit 99.1.

 

On October 26, 2021, Nektar announced that it would hold a Webcast conference call on November 4, 2021 to review its financial results for the quarter ended September 30, 2021. This conference call is accessible through a link that is posted on the home page and Investors section of the Nektar website: http://ir.nektar.com.

 

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, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.  

Description 

99.1   Press release titled “Nektar Therapeutics Reports Third Quarter 2021 Financial Results” issued by Nektar Therapeutics on November 4, 2021.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  NEKTAR THERAPEUTICS
     
Date: November 4, 2021 By: /s/ Mark A. Wilson
    Mark A. Wilson
    General Counsel and Secretary

 

 

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Exhibit 99.1

 

 

Nektar Therapeutics Reports Third Quarter 2021 Financial Results

 

SAN FRANCISCO, November 4, 2021 -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the third quarter ended September 30, 2021.

 

Cash and investments in marketable securities at September 30, 2021 were approximately $955.3 million as compared to $1.2 billion at December 31, 2020.

 

“We made significant progress across our portfolio this past quarter ahead of multiple late-stage registrational trial data readouts anticipated in the first half of 2022,” said Howard W. Robin, President and CEO of Nektar. “For bempegaldesleukin, we remain on track to report data from the first three of our five registrational studies with nivolumab in melanoma, renal cell carcinoma and bladder cancer in the first half of 2022. We also plan to present initial data from our PROPEL study evaluating the combination of bempegaldesleukin plus pembrolizumab in patients with previously untreated metastatic non-small cell lung cancer at the upcoming ESMO Immuno-Oncology meeting.”

 

Mr. Robin continued, “At the upcoming SITC and ASH meetings in the fourth quarter, we look forward to showcasing our IL-15 program, NKTR-255, which is being developed in solid tumors and hematological malignancies. We recently expanded the development plans for NKTR-255 with a new clinical collaboration with Merck KGaA and Pfizer designed to evaluate the combination of NKTR-255 with avelumab, a PD-L1 inhibitor, in the JAVELIN Bladder Medley study. Importantly, our partner Eli Lilly continues to advance a broad development program for NKTR-358, demonstrating its potential to be transformative in the treatment of autoimmune disease, with ongoing Phase 2 studies in both lupus and ulcerative colitis and plans to initiate additional Phase 2 studies in two different immune-mediated diseases.”

 

Summary of Financial Results

 

Revenue in the third quarter of 2021 was $24.9 million as compared to $30.0 million in the third quarter of 2020. In the first nine months of 2021 revenue was $76.9 million as compared to $129.5 million for the first nine months of 2020. Revenue was lower relative to 2020 due to the recognition in the first nine months of 2020 of $50.0 million in total milestones from Bristol-Myers Squibb for the initiation of registrational trials of bempegaldesleukin plus Opdivo® in adjuvant melanoma and muscle-invasive bladder cancer.

 

Total operating costs and expenses in the third quarter of 2021 were $138.5 million as compared to $133.1 million in the third quarter of 2020. The increase was due to increases in research and development (R&D) expense and general and administrative (G&A) expense. Total operating costs and expenses in the first nine months of 2021 were $410.1 million as compared to $443.8 million in the first nine months of 2020. Operating costs and expenses decreased relative to 2020 primarily due to the recording of $45.2 million in impairment charges in the first quarter of 2020 resulting from the discontinuation of the NKTR-181 program.

  

R&D expense in the third quarter of 2021 was $103.7 million as compared to $100.5 million for the third quarter of 2020. For the first nine months of 2021, R&D expense was $300.7 million as compared to $306.0 million in the first nine months of 2020. 

 

 

 

G&A expense was $29.5 million in the third quarter of 2021 and $27.0 million in the third quarter of 2020. For the first nine months of 2021, G&A expense was $90.7 million compared to $77.6 million in the first nine months of 2020. G&A expense increased primarily due to an increase in pre-commercial costs for bempegaldesleukin.

 

Net loss for the third quarter of 2021 was $129.7 million or $0.70 basic and diluted loss per share as compared to a net loss of $108.6 million or $0.61 basic and diluted loss per share in the third quarter of 2020. Net loss in the first nine months of 2021 was $378.2 million or $2.07 basic and diluted loss per share as compared to a net loss of $327.2 million or $1.84 basic and diluted loss per share in the first nine months of 2020.

 

Nektar also announced upcoming presentations at the following scientific congresses:

 

The Society for Immunotherapy of Cancer (SITC) Annual Meeting

November 10-14, 2021 (In person and virtual)

 

Late-Breaking Poster Presentation: “NKTR-255 plus cetuximab in patients with solid tumors: Interim safety and efficacy results from the Phase 1b dose-escalation study”, Altan, M., et al.

 

Poster Presentation: Combining bempegaldesleukin (CD122-preferential IL-2 pathway agonist) and NKTR-262 (TLR7/8 agonist) pairs local innate activation with systemic CD8+ T cell expansion to enhance anti-tumor immunity”, Rolig, A., et al. (collaborator presentation)

 

Poster Presentation: Associations between KIR/KIR-ligand genotypes and clinical outcome for patients with advanced solid tumors receiving BEMPEG plus nivolumab combination therapy in the PIVOT-02 trial”, Feils, A., et al. (collaborator presentation)

 

ESMO Immuno-Oncology Congress 2021

December 8-11, 2021 (In person and virtual)

 

Poster Presentation: “Preliminary results from PROPEL: A phase 1/2 Study of bempegaldesleukin (BEMPEG: NKTR-214) plus pembrolizumab (PEMBRO) with or without chemotherapy in patients with metastatic NSCLC”, Felip, E., et al.

 

2021 American Society of Hematology (ASH) Annual Meeting

December 11-14, 2021 (In person and virtual)

 

Poster Presentation:Safety, tolerability, PK/PD and preliminary efficacy of NKTR-255, a novel IL-15 receptor agonist, in patients with relapsed/refractory hematologic malignancies”, Shah, N., et al.

 

Poster Presentation:Pharmacodynamic analysis of CAR-T cell persistence in patients with hematologic malignancies treated with NKTR-255, an IL-15 receptor agonist that enhances CD8+ T-cells: Preliminary results from a phase 1 study”, Turtle, C., et al. (collaborator presentation)

 

Conference Call to Discuss Third Quarter 2021 Financial Results

 

Nektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time, Thursday, November 4, 2021.

 

This press release and a live audio-only Webcast of the conference call can be accessed through a link that is posted on the home page and Investors section of the Nektar website: https://ir.nektar.com/. The web broadcast of the conference call will be available for replay through December 2, 2021.

 

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To access the conference call, follow these instructions:

 

Dial: (877) 881-2183 (U.S.); (970) 315-0453 (International)
Conference ID: 8264398 (Nektar Therapeutics is the host)

 

In the event that any non-GAAP financial measure is discussed on the conference call that is not described in this press release, or explained on the conference call, related information will be made available on the Investors section of the Nektar website as soon as practical after the conclusion of the conference call.

 

About Nektar

 

Nektar Therapeutics is a biopharmaceutical company with a robust, wholly owned R&D pipeline of investigational medicines in oncology, immunology, and virology as well as a portfolio of approved partnered medicines. Nektar is headquartered in San Francisco, California, with additional 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.

 

Cautionary Note Regarding Forward-Looking Statements
 

This press release contains forward-looking statements which can be identified by words such as: "will," "may," "design," "potential," "initiate," "plan," “continue,” “remain” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the therapeutic potential of, and future development plans for, bempegaldesleukin, NKTR-358 and NKTR-255, the prospects and plans for our collaborations with other companies, and the timing of the data readouts for our drug candidates. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others: (i) our statements regarding the therapeutic potential of bempegaldesleukin, NKTR-358 and NKTR-255 are based on preclinical and clinical findings and observations and are subject to change as research and development continue; (ii) bempegaldesleukin, NKTR-358 and NKTR-255 are investigational agents and continued research and development for these drug candidates is subject to substantial risks, including negative safety and efficacy findings in ongoing clinical studies (notwithstanding positive findings in earlier preclinical and clinical studies); (iii) bempegaldesleukin, NKTR-358 and NKTR-255 are in various stages of clinical development and the risk of failure is high and can unexpectedly occur at any stage prior to regulatory approval; (iv) the timing of the commencement or end of clinical trials and the availability of clinical data may be delayed or unsuccessful due to regulatory delays, slower than anticipated patient enrollment, manufacturing challenges, changing standards of care, evolving regulatory requirements, clinical trial design, clinical outcomes, competitive factors, or delay or failure in ultimately obtaining regulatory approval in one or more important markets; (v) patents may not issue from our patent applications for our drug candidates, patents that have issued may not be enforceable, or additional intellectual property licenses from third parties may be required; and (vi) certain other important risks and uncertainties set forth in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 6, 2021. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Contact:

 

For Investors:

Vivian Wu of Nektar Therapeutics

628-895-0661

 

For Media:

Dan Budwick of 1AB

973-271-6085

dan@1abmedia.com

 

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NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

   September 30,
2021
   December 31,
2020(1)
 
ASSETS        
Current assets:        
Cash and cash equivalents  $54,017   $198,955 
Short-term investments   867,063    862,941 
Accounts receivable   28,994    38,889 
Inventory   15,330    15,292 
Other current assets   20,731    21,928 
Total current assets   986,135    1,138,005 
Long-term investments   34,219    136,662 
Property, plant and equipment, net   58,830    59,662 
Operating lease right-of-use assets   119,714    126,476 
Goodwill   76,501    76,501 
Other assets   1,844    1,461 
Total assets  $1,277,243   $1,538,767 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable   23,660    22,139 
Accrued compensation   32,882    14,532 
Accrued clinical trial expenses   37,633    44,207 
Accrued contract manufacturing expenses   8,088    11,310 
Other accrued expenses   19,966    9,676 
Operating lease liabilities, current portion   17,740    13,915 
Total current liabilities   139,969    115,779 
Operating lease liabilities, less current portion   128,718    136,373 
Development derivative liability   21,387     
Liabilities related to the sales of future royalties, net   181,760    200,340 
Other long-term liabilities   3,869    8,980 
Total liabilities   475,703    461,472 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock        
Common stock   18    18 
Capital in excess of par value   3,492,435    3,388,730 
Accumulated other comprehensive loss   (3,563)   (2,295)
Accumulated deficit   (2,687,350)   (2,309,158)
Total stockholders’ equity   801,540    1,077,295 
Total liabilities and stockholders’ equity  $1,277,243   $1,538,767 

 

 

(1)The consolidated balance sheet at December 31, 2020 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.

 

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NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share information)

(Unaudited)

 

   Three months ended
September 30,
   Nine months ended
September 30,
 
   2021   2020   2021   2020 
Revenue:                
Product sales  $5,194   $5,691   $17,835   $14,620 
Royalty revenue       12,289        31,411 
Non-cash royalty revenue related to sales of future royalties   19,413    10,422    58,667    28,001 
License, collaboration and other revenue   314    1,631    396    55,421 
Total revenue   24,921    30,033    76,898    129,453 
Operating costs and expenses:                    
Cost of goods sold   5,311    5,570    18,734    15,154 
Research and development   103,738    100,531    300,655    305,954 
General and administrative   29,468    26,982    90,702    77,546 
Impairment of assets and other costs for terminated program               45,189 
Total operating costs and expenses   138,517    133,083    410,091    443,843 
Loss from operations   (113,596)   (103,050)   (333,193)   (314,390)
Non-operating income (expense):                    
Non-cash interest expense on liabilities related to sales of future royalties   (12,801)   (8,425)   (39,186)   (22,084)
Change in fair value of development derivative liability   (3,328)       (7,640)    
Interest income and other income (expense), net   131    2,910    2,388    16,453 
Interest expense               (6,851)
Total non-operating income (expense), net   (15,998)   (5,515)   (44,438)   (12,482)
Loss before provision for income taxes   (129,594)   (108,565)   (377,631)   (326,872)
Provision for income taxes   112    21    561    365 
Net loss  $(129,706)  $(108,586)  $(378,192)  $(327,237)
                     
Basic and diluted net loss per share  $(0.70)  $(0.61)  $(2.07)  $(1.84)
Weighted average shares outstanding used in computing basic and diluted net loss per share   184,110    179,090    182,736    178,203 

 

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NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

   Nine months ended
September 30,
 
   2021   2020 
Cash flows from operating activities:        
Net loss  $(378,192)  $(327,237)
Adjustments to reconcile net loss to net cash used in operating activities:          
Non-cash royalty revenue related to sales of future royalties   (58,667)   (28,001)
Non-cash interest expense on liabilities related to sales of future royalties   39,186    22,084 
Change in fair value of development derivative liability   7,640     
Non-cash research and development expense   11,497     
Stock-based compensation   72,269    72,274 
Depreciation and amortization   10,710    10,937 
Impairment of advance payments to contract manufacturers and equipment for terminated program       20,351 
Amortization of premiums (discounts), net and other non-cash transactions   5,677    1,150 
Changes in operating assets and liabilities:          
Accounts receivable   9,895    (6,123)
Inventory   (38)   (227)
Operating leases, net   2,932    4,316 
Other assets   814    (5,588)
Accounts payable   1,247    (3,337)
Accrued compensation   18,350    20,478 
Other accrued expenses   (3,837)   9,340 
Deferred revenue   (605)   (5,070)
Net cash used in operating activities   (261,122)   (214,653)
Cash flows from investing activities:          
Purchases of investments   (816,049)   (791,445)
Maturities of investments   902,687    1,158,722 
Sales of investments   5,035    41,700 
Purchases of property, plant and equipment   (9,093)   (5,504)
Net cash provided by investing activities   82,580    403,473 
Cash flows from financing activities:          
Proceeds from shares issued under equity compensation plans   31,436    20,651 
Cash receipts from development derivative liability   2,250     
Repayment of senior notes       (250,000)
Net cash provided by (used in) financing activities   33,686    (229,349)
Effect of foreign exchange rates on cash and cash equivalents   (82)   9 
Net decrease in cash and cash equivalents   (144,938)   (40,520)
Cash and cash equivalents at beginning of period   198,955    96,363 
Cash and cash equivalents at end of period  $54,017   $55,843 
Supplemental disclosures of cash flow information:          
Cash paid for interest  $   $9,742 
Operating lease right-of-use asset recognized in exchange for lease liabilities  $1,057   $2,133 

 

 

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