SAN FRANCISCO, Aug. 8, 2018 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the second quarter ended June 30, 2018.
Cash and investments in marketable securities at June 30, 2018 were $2.1 billion as compared to $353.2 million at December 31, 2017. This includes the $1.0 billion upfront payment and $850.0 million share purchase proceeds received on April 3, 2018, as a result of our Bristol-Myers Squibb collaboration for the global development and commercialization of NKTR-214.
"Over the past few months, we have reported significant progress across all areas of our pipeline, with notable milestones for our immuno-oncology, immunology and pain programs," said Howard W. Robin, President and CEO of Nektar. "Together with Bristol-Myers Squibb, we plan to initiate 20 registrational studies in nine tumor settings under our joint development plan with the first wave of studies in melanoma, renal cell carcinoma, and urothelial cancers starting this year. We initiated our first study of NKTR-358 in patients with lupus with our partner Eli Lilly. And importantly, we recently achieved a significant milestone for our pain program, with the FDA's acceptance of the NDA filing for NKTR-181, a first-in-class opioid analgesic."
Revenue in the second quarter of 2018 was $1.088 billion as compared to $34.6 million in the second quarter of 2017. Year-to-date revenue for 2018 was $1.126 billion as compared to $59.3 million in the first half of 2017. Revenue was higher in the second quarter and first half of 2018 as compared to the same periods in 2017 primarily because of the recognition of $1.06 billion of license revenue from the Bristol-Myers Squibb collaboration agreement.
Total operating costs and expenses in the second quarter of 2018 were $114.1 million as compared to $85.2 million in the second quarter of 2017. Total operating costs and expenses in the first half of 2018 were $238.9 million as compared to $164.4 million in the first half of 2017. Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.
R&D expense in the second quarter of 2018 was $88.3 million as compared to $60.3 million in the second quarter of 2017. For the first half of 2018, R&D expense was $187.8 million as compared to $121.3 million in the first half of 2017. R&D expense was higher in the second quarter and first half of 2018 as compared to the same periods in 2017 primarily because of expenses for our pipeline programs, including the continued development of NKTR-214 in Phase 1/2 studies and Phase 3 preparatory activities, costs related to the NKTR-181 New Drug Application and NKTR-181 pre-commercial manufacturing, Phase 1 clinical studies of NKTR-358, initiation of the Phase 1 study of NKTR-262 in combination with NKTR-214 and IND-enabling activities for NKTR-255.
General and administrative (G&A) expense was $20.3 million in the second quarter of 2018 as compared to $16.0 million in the second quarter of 2017. G&A expense in the first half of 2018 was $38.9 million as compared to $28.0 million in the first half of 2017. G&A expense was higher in the second quarter and first half of 2018 as compared to the same periods in 2017 primarily due to an increase in non-cash stock based compensation expense.
Net income in the second quarter of 2018 was $971.5 million or $5.33 diluted earnings per share as compared to a net loss of $59.9 million or $0.39 basic and diluted loss per share in the second quarter of 2017. Net income in the first half of 2018 was $875.7 million or $4.91 diluted earnings per share as compared to a net loss of $123.7 million or $0.80 basic and diluted loss per share in the first half of 2017.
Second Quarter 2018 and Recent Business Highlights
In July, the U.S. Food and Drug Administration filed and accepted a New Drug Application (NDA) for NKTR-181, a first-in-class opioid analgesic, to treat chronic low back pain in adult patients new to opioid therapy. The NDA has been assigned a PDUFA (Prescription Drug User Fee Act) target action date of May 29, 2019 by the FDA.
In June, Nektar presented data for NKTR-181 at the 80th Annual Scientific Meeting of the College on Problems of Drug Dependence. The data show that NKTR-181 consistently demonstrates low abuse potential.
In June, Nektar presented data from the Phase 1 dose escalation and preliminary data from the Phase 2 dose expansion phase of the ongoing PIVOT study for NKTR-214 in combination with Opdivo (nivolumab) at the 2018 ASCO Annual Meeting. This data showed that pre-specified efficacy criteria were achieved in three tumor types: first-line melanoma, first-line renal cell carcinoma and first-line urothelial cancer. Nektar and Bristol-Myers Squibb expect to initiate a Phase 3 registrational trial in first-line advanced melanoma patients in Q3 2018, and pivotal studies are also being designed in renal cell carcinoma and urothelial cancer.
In May, Nektar announced a clinical collaboration with Syndax Pharmaceuticals to evaluate NKTR-214 in combination with entinostat, an oral, small molecule Class 1 specific HDAC inhibitor, in patients with metastatic melanoma who have previously progressed on treatment with an anti-PD-1 agent.
In May, Nektar began dosing patients with systemic lupus erythematosus in a Phase 1b multiple ascending dose study of NKTR-358, a first-in-class regulatory T cell stimulator, designed to correct the underlying immune system dysfunction found in patients with immune disorders.
The company also announced the following upcoming presentations during the second half of 2018:
American Chemical Society Annual Meeting, Boston, MA:
Oral Presentation: "Confronting the Opioid Epidemic: Novel Treatments for Chronic Pain"
Presenter: Stephen Doberstein, Ph.D., Nektar Therapeutics
Date: Monday, August, 20, 2018, 1:35 p.m. - 2:05 p.m., Eastern Daylight Time
SMI Immuno-Oncology Conference, London, UK:
Oral Presentation: "Enhanced cancer vaccine effectiveness with NKTR-214, a CD122-biased cytokine"
Presenter: Loui Marakamutil, Ph.D., Nektar Therapeutics
Date: September 26, 2018, 11:00 a.m., British Summer Time
Ninth American Conference on Pharmacometrics, San Diego, CA:
Poster: "NKTR-255 Exhibits Target Mediated Drug Disposition and Stimulates Proliferation of Cytotoxic Immune Cells in Cyonomolgous Monkeys", Bhasi, K., et al.
Date: October 6-12, 2018
ESMO 2018 Congress, Munich, Germany:
Poster 362TiP: "ATTAIN: Phase 3 study of etirinotecan pegol (EP) vs treatment of physician's choice (TPC) in patients (pts) with metastatic breast cancer (MBC) who have stable brain metastases (BM) previously treated with an anthracycline, a taxane, and capecitabine (ATC).", Tripathy, D., et al.
Date: October 22, 2018, 12:45-13:45 p.m. Central European Summer Time
Poster 446TiP: "REVEAL: A phase 1/2, open-label, multicenter, dose escalation and dose expansion study of NKTR-262 [TLR 7/8 agonist] plus NKTR-214 [CD122-biased agonist] with or without nivolumab (nivo) in patients (pts) with locally advanced or metastatic solid tumor malignancies.", Diab, A., et al.
Date: October 22, 2018, 12:45-13:45 p.m. Central European Summer Time
Conference Call to Discuss Second Quarter 2018 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 today, Wednesday, August 8, 2018.
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: . The web broadcast of the conference call will be available for replay through Monday, September 10, 2018.
To access the conference call, follow these instructions:
Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 7099844 (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 the press release, or explained on the conference call, related information will be made available on the Investors page at the Nektar website as soon as practical after the conclusion of the conference call.
About Nektar Therapeutics
Nektar Therapeutics is a research-based development stage biopharmaceutical company whose mission is to discover and develop innovative medicines to address the unmet medical needs of patients. Our R&D pipeline of new investigational medicines includes treatments for cancer, auto-immune disease and chronic pain. We leverage Nektar's proprietary and proven chemistry platform in the discovery and design of our new therapeutic candidates. 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 .
Cautionary Note Regarding Forward-Looking Statements
This press release contains uncertain or forward-looking statements which can be identified by words such as: "expect," "may," "will," "design," "develop," and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the potential therapeutic benefits of and future development plans for our products (including NKTR?214, NKTR-181, NKTR-358, NKTR-262 and NKTR-255) and the initiation of Phase 3 registrational trials. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions and 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 and you should not rely on such statements. Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include: (i) clinical study outcomes remain very unpredictable and it is possible that a clinical study could fail even after positive interim data is observed; (ii) the data package required for approval of an NDA to the FDA is very uncertain and difficult to predict due to broad FDA regulatory discretion, and changing FDA regulatory guidelines; (iii) regulations concerning and controlling access to opioid-based pharmaceuticals are strict and it is difficult to predict which scheduling category will apply to NKTR-181 if regulatory approval is achieved; (iv) 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 (v) certain other important risks and uncertainties set forth in our Annual Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2018. 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.
Contacts:
For Investors:
Jennifer Ruddock of Nektar Therapeutics
415-482-5585
Jodi Sievers of Nektar Therapeutics
415-482-5593
For Media:
Dan Budwick of 1AB
973-271-6085
dan@1abmedia.com
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS June 30, 2018 December 31, 2017 (1)
------------- -----------------
Current assets:
Cash and cash
equivalents $911,125 $4,762
Short-term
investments 912,683 291,370
Accounts
receivable, net 35,315 5,014
Inventory 11,884 10,726
Other current
assets 34,940 14,948
Total current assets 1,905,947 326,820
Long-term investments 282,277 57,088
Property, plant and equipment, net 45,000 47,463
Goodwill 76,501 76,501
Other assets 3,362 994
----- ---
Total assets $2,313,087 $508,866
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $10,674 $4,782
Accrued
compensation 18,980 8,263
Accrued clinical
trial expenses 20,028 9,461
Other accrued
expenses 14,993 10,064
Interest payable 4,144 4,198
Deferred
revenue,
current portion 17,988 18,949
Other current
liabilities 10,090 446
Total current liabilities 96,897 56,163
Senior secured notes, net 246,078 245,207
Liability related to the sale of future
royalties, net 88,867 94,655
Deferred revenue, less current portion 13,780 19,021
Other long-term liabilities 7,051 5,992
Total liabilities 452,673 421,038
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock 17 15
Capital in
excess of par
value 3,094,095 2,207,865
Accumulated
other
comprehensive
loss (4,002) (2,111)
Accumulated
deficit (1,229,696) (2,117,941)
Total stockholders' equity 1,860,414 87,828
Total
liabilities and
stockholders'
equity $2,313,087 $508,866
(1) The consolidated balance
sheet at December 31, 2017 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 June 30, Six Months Ended June 30,
--------------------------- -------------------------
2018 2017 2018 2017
---- ---- ---- ----
Revenue:
Product sales $5,863 $15,693 $12,158 $20,449
Royalty revenue 8,563 7,434 19,639 14,651
Non-cash royalty revenue
related to sale of future
royalties 9,045 6,638 15,965 13,301
License, collaboration and
other revenue 1,064,246 4,824 1,077,973 10,916
--------- ----- --------- ------
Total revenue 1,087,717 34,589 1,125,735 59,317
Operating costs and
expenses:
Cost of goods sold 5,522 8,989 12,168 15,120
Research and development 88,334 60,260 187,758 121,318
General and administrative 20,261 15,996 38,948 27,972
Total operating costs and
expenses 114,117 85,245 238,874 164,410
------- ------ ------- -------
Income (loss) from
operations 973,600 (50,656) 886,861 (105,093)
Non-operating income
(expense):
Interest expense (5,385) (5,510) (10,725) (10,912)
Non-cash interest expense
on liability related to
sale of future royalties (4,975) (4,512) (9,994) (9,064)
Interest income and other
income (expense), net 12,105 906 13,676 1,564
------ --- ------ -----
Total non-operating income
(expense), net 1,745 (9,116) (7,043) (18,412)
Income (loss) before
provision for income taxes 975,345 (59,772) 879,818 (123,505)
Provision for income taxes 3,885 99 4,150 232
----- --- ----- ---
Net income (loss) $971,460 $(59,871) $875,668 $(123,737)
======== ======== ======== =========
Net income (loss) per share:
Basic $5.67 $(0.39) $5.27 $(0.80)
===== ====== ===== ======
Diluted $5.33 $(0.39) $4.91 $(0.80)
===== ====== ===== ======
Weighted average shares
outstanding used in
computing net income (loss)
per share:
Basic 171,378 155,352 166,160 154,514
======= ======= ======= =======
Diluted 182,291 155,352 178,281 154,514
======= ======= ======= =======
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
-------------------------
2018 2017
---- ----
Cash flows from operating activities:
Net income (loss) $875,668 $(123,737)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Non-cash royalty revenue related to sale of future royalties (15,965) (13,301)
Non-cash interest expense on liability related to sale of future
royalties 9,994 9,064
Stock-based compensation 40,608 16,283
Depreciation and amortization 5,115 8,287
Other non-cash transactions (3,991) (1,089)
Changes in operating assets and liabilities:
Accounts receivable, net (19,557) 11,564
Inventory (1,158) 101
Other assets (14,282) 2,280
Accounts payable 5,791 3,221
Accrued compensation 10,717 (3,934)
Accrued clinical trial expenses 10,567 (1,275)
Other accrued expenses 4,904 2,388
Interest payable (54) (54)
Deferred revenue (6,249) (3,887)
Other liabilities 5,068 1,000
----- -----
Net cash provided by (used in) operating activities 907,176 (93,089)
Cash flows from investing activities:
Purchases of investments (989,850) (121,135)
Maturities of investments 132,779 147,558
Sales of investments 11,963 8,823
Purchases of property, plant and equipment (3,730) (6,344)
Sales of property, plant and equipment 2,633 -
----- ---
Net cash (used in) provided by investing activities (846,205) 28,902
Cash flows from financing activities:
Payment of capital lease obligations - (1,369)
Issuance of common stock 790,231 -
Proceeds from shares issued under equity compensation plans 55,208 22,016
------ ------
Net cash provided by financing activities 845,439 20,647
Effect of exchange rates on cash and cash equivalents (47) 49
--- ---
Net increase (decrease) in cash and cash equivalents 906,363 (43,491)
Cash and cash equivalents at beginning of period 4,762 59,640
Cash and cash equivalents at end of period $911,125 $16,149
======== =======
Supplemental disclosure of cash flow information:
Cash paid for interest $9,795 $10,010
====== =======
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SOURCE Nektar Therapeutics
Company Codes: NASDAQ-NMS:NKTR
