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Press release from PR Newswire

Nektar Therapeutics Reports Financial Results for the First Quarter of 2012

Wednesday, May 02, 2012

Nektar Therapeutics Reports Financial Results for the First Quarter of 201216:15 EDT Wednesday, May 02, 2012SAN FRANCISCO, May 2, 2012 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the first quarter ended March 31, 2012. Cash, cash equivalents, and investments at March 31, 2012 were $498.8 million as compared to $414.9 million at December 31, 2011.  This increase is primarily a result of the $124.0 million in proceeds received by Nektar for the sale of its Cimzia® and Mircera® royalty interests, which was completed during the first quarter of 2012."I am extremely pleased with Nektar's performance in the first quarter of 2012," said Howard W. Robin, President and Chief Executive Officer of Nektar. "We significantly strengthened our financial position with the sale of non-core royalties for $124 million with no equity dilution to our stockholders. We completed the Phase 1 clinical trials for NKTR-181, our novel opioid analgesic for chronic pain, and are targeting the start of the Phase 2 program in the middle of this year. In addition, we advanced our next new opioid candidate, NKTR-192 for acute pain, into Phase 1.  Finally, the FDA approved the eighth product enabled by Nektar technology, Affymax's OMONTYS® for anemia, showcasing the ability of our technology platform to continue to produce new product candidates in high value therapeutic areas."The company also announced that the naloxegol clinical studies in opioid-induced constipation continue on-track for planned regulatory filings by AstraZeneca in mid-2013, and partner Baxter is targeting the start of Phase 3 development by year-end for BAX 855, a long-acting PEGylated Factor VIII therapeutic candidate for hemophilia A.  Revenue for the first quarter of 2012 was $17.9 million, an increase versus $11.3 million in the first quarter of 2011. The increase was primarily due to higher product sales during the quarter.  Total operating costs and expenses in the first quarter of 2012 were $55.9 million as compared to $45.2 million in the first quarter of 2011.   Total operating costs and expenses increased primarily as a result of higher research and development expense and higher cost of goods for product sales.  Research and development expense in the first quarter of 2012 was $35.1 million as compared to $30.2 million for the first quarter of 2011.  R&D expense was higher in the first quarter of 2012 reflecting Nektar's focus on advancing a number of key clinical programs, including the Phase 3 study of etirinotecan pegol (NKTR-102) in metastatic breast cancer, the preparations to initiate the Phase 2 study for NKTR-181 in chronic pain patients, and the initial Phase 1 clinical study for NKTR-192.  General and administrative expense was $10.4 million in the first quarter of 2012, a decrease as compared to $11.7 million in the first quarter of 2011.  Net loss for the first quarter ended March 31, 2012 was $41.1 million or $0.36 loss per share.The company also announced upcoming presentations at the following medical meetings and scientific congresses during the second and third quarters of 2012:IMPAKT Breast Cancer Conference, Brussels, Belgium: Abstract Title: "Phase 3 study of NKTR-102 versus Treatment of Physician's Choice (TPC) in patients (pts) with locally recurrent or metastatic breast cancer (MBC) previously treated with an anthracycline, a taxane, and capecitabine (ATC)", Cortes, J, et. al.  Abstract/Poster Number: #173 Session Title/Track:  "New Drug Development" Date: May 4, 2012, Gold Hall, 16:15 ? 17:20 p.m. Central European TimeAbstract Title: "Significant antitumor activity in a randomized phase 2 study comparing 2 schedules of NKTR-102 in patients with metastatic breast cancer", Awada A, et. al.   Abstract/Poster Number: #249 Session Title/Track:  "New Drug Development" Date: May 4, 2012, Gold Hall, 16:15 ? 17:20 p.m. Central European TimeAmerican Society of Oncology (ASCO) Annual Meeting, Chicago, Illinois: Abstract Title: "Phase 3 study of NKTR-102 versus Treatment of Physician's Choice (TPC) in pts with locally recurrent or metastatic breast cancer previously treated with an anthracycline, a taxane and capecitabine", Perez E, et. al.  Abstract/Poster Number: #TPS1140/36A Session Title/Track:  "Trials in Progress Session" Date: June 2, 2012, 8:00 a.m. ? 12:00 p.m. Central Time Location: S Hall A2Abstract Title: "NKTR-102 in patients with platinum-resistant ovarian cancer: Modeling CA-125 response and its correlation with tumor response", Chia Y, et. al.  Abstract/Poster Number: #5048/18H Session Title/Track:  "General Poster Session: Gynecologic Cancer" Date: June 3, 2012, 8:00 a.m. ? 12:00 p.m. Central Time Location: S Hall A2The International Conference on Opioids: Basic Science, Clinical Applications and ComplianceAbstract Title: "Multiple Dose Pharmacokinetics and Pharmacodynamics of the New Oral Opioid Analgesic, NKTR-181" Odinecs et. al.  Abstract: #35 Date: June 12, 2012, 8:00 a.m. - 6:00 p.m. Eastern TimeConference Call to Discuss First Quarter 2012 Financial ResultsNektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time (ET)/2:00 p.m. Pacific Time (PT) today, Wednesday, May 2, 2012.The 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 Investor Relations section of the Nektar website: http://www.nektar.com. The web broadcast of the conference call will be available for replay through June 2, 2012. To access the conference call, follow these instructions:    Dial: (866) 203-3436 (U.S.); (617) 213-8849 (international)    Passcode: 64392378 (Nektar Therapeutics is the host)An audio replay will also be available shortly following the call through Saturday, June 2, 2012 and can be accessed by dialing (888) 286-8010(U.S.); or (617) 801-6888 (international) with a passcode of 29485870.About NektarNektar 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 therapeutic areas. In the area of pain, Nektar has an exclusive worldwide license agreement with AstraZeneca for naloxegol (NKTR-118), an investigational drug candidate, which is being evaluated in Phase 3 clinical studies as a once- daily, oral tablet for the treatment of opioid-induced constipation.  This agreement also includes NKTR-119, an earlier stage development program that is a co-formulation of naloxegol and an opioid.  NKTR-181, a novel mu-opioid analgesic in development to treat chronic pain, has completed Phase 1 development and is being prepared for a Phase 2 study.  NKTR-192, a novel mu-opioid analgesic in development to treat acute pain is in Phase 1 clinical development.  In oncology, etirinotecan pegol (NKTR-102) is being evaluated in a Phase 3 clinical study for the treatment of metastatic breast cancer and in Phase 2 studies for the treatment of ovarian and colorectal cancers.Nektar's technology has enabled eight approved products in the U.S. or Europe through partnerships with leading biopharmaceutical companies, including Affymax's OMONTYS® for anemia, UCB's Cimzia® for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS® for hepatitis C and Amgen's Neulasta® for neutropenia.  Additional development-stage products that leverage Nektar's proprietary technology platform include Baxter's BAX 855, a long-acting PEGylated rFVIII program, which is in Phase 1 clinical development.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 StatementsThis press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "expect," "believe," "should," "may," "will" and similar references to future periods.  Examples of forward-looking statements include, among others, statements we make regarding our plans to initiate a Phase 2 clinical study for NKTR-181; AstraZeneca's planned regulatory filings with government health authorities for approval of NKTR-118 in one or more countries if the Phase 3 clinical studies for this drug candidate are successful; Baxter's planned start of Phase 3 development for BAX 855 prior to year-end;  the strength of our financial position and our future ability to invest in the advancement of our proprietary drug candidates; the value and potential of certain drug candidates being developed by our collaboration partners including NKTR-118 and OMONTYS®; and the value and potential of Nektar's technology and research and development pipeline.  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 ability to maintain sufficient cash, liquid resources, and investments and our ability to raise additional cash through the monetization or sale of assets held by us or through one or more financing transactions that may be dilutive to our existing stockholders, in order to fund the repayment of the principal amount of the $215.0 million in outstanding convertible subordinated notes due in September 2012 and to allow us to further invest in our business; (ii) our drug candidates and those of our collaboration partners 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 for numerous reasons including safety and efficacy findings even after positive findings in preclinical and clinical studies; (iii) the timing of the commencement or end of clinical trials and the commercial launch of our drug candidates 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; (iv) scientific discovery of new medical breakthroughs is an inherently uncertain process and the future success of the application of our technology platform to potential new drug candidates is therefore highly uncertain and unpredictable and one or more research and development programs could fail; and (v) certain other important risks and uncertainties set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2012.  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.Nektar Investor Inquiries:Jennifer Ruddock/Nektar Therapeutics        (415) 482-5585Susan Noonan/SA Noonan Communications, LLC      (212) 966-3650Nektar Media Inquiries:                                   Karen Bergman/BCC Partners          (650) 575-1509 Michelle Corral/BCC Partners                    (415) 794-8662 NEKTAR THERAPEUTICSCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(unaudited)ASSETS March 31, 2012  December 31, 2011 (1)Current assets:Cash and cash equivalents$         148,485$                   15,312Short-term investments233,624225,856Accounts receivable10,8034,938Inventory14,10812,656Other current assets13,63417,944Total current assets420,654276,706Long-term investments116,732173,768Property and equipment, net75,55778,576Goodwill76,50176,501Other assets5,345999Total  assets$         694,789$                 606,550LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$              1,761$                      3,019Accrued compensation8,18712,807Accrued expenses7,7596,669Accrued clinical trial expenses12,72611,953Deferred revenue, current portion20,00719,643Convertible subordinated notes214,955214,955Other current liabilities5,3586,486Total current liabilities270,753275,532Capital lease obligations, less current portion13,89014,582Liability related to sale of future royalties 125,785-Deferred revenue, less current portion111,050108,188Other long-term liabilities10,82410,437Total liabilities532,302408,739Commitments and contingenciesStockholders' equity:Preferred stock--Common stock1111Capital in excess of par value1,602,1411,597,428Accumulated other comprehensive loss(43)(1,103)Accumulated deficit(1,439,622)(1,398,525)Total stockholders' equity162,487197,811Total liabilities and stockholders' equity$         694,789$                 606,550(1) The consolidated balance sheet at December 31, 2011 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 THERAPEUTICSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share information)(unaudited)Three Months Ended March 31, 20122011Revenue:Product sales and royalties$ 10,122$ 4,793License, collaboration, and other7,8276,506Total revenue17,94911,299Operating costs and expenses:Cost of goods sold8,7073,263Research and development35,08530,176General and administrative10,41411,727Impairment of long-lived assets1,675-Total operating costs and expenses55,88145,166Loss from operations(37,932)(33,867)Non-operating income (expense):Interest income 632432Interest expense(4,333)(2,585)Other income, net660134Total non-operating expense(3,041)(2,019)Loss before provision for income taxes(40,973)(35,886)Provision for income taxes124148Net loss$ (41,097)$ (36,034)Basic and diluted net loss per share$ (0.36)$ (0.33)Weighted average shares used in computing basic and diluted net loss per share114,531108,677NEKTAR THERAPEUTICSCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(In thousands)(unaudited)Three Months Ended March 31, 20122011Comprehensive Loss$ (40,037)$ (36,184) NEKTAR THERAPEUTICSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(unaudited)Three Months Ended March 31,20122011Cash flows from operating activities:Net loss $ (41,097)$   (36,034)Adjustments to reconcile net loss to net cash used in operating activities:Non-cash interest expense on liability related to sale of future royalties 1,815-Stock-based compensation 4,2344,802Depreciation and amortization 3,4803,856Impairment of long-lived assets 1,675-Other non-cash transactions295309Changes in operating assets and liabilities:Accounts receivable (5,865)22,942Inventory(1,452)(4,446)Other assets 4,305(1,199)Accounts payable (1,290)(2,895)Accrued compensation (4,620)(1,572)Accrued expenses 1,0941,961Accrued clinical trial expenses7731,505Deferred revenue 3,226(2,555)Other liabilities (1,191)(1,544)Net cash used in operating activities $ (34,618)$   (14,870)Cash flows from investing activities:Purchases of investments (102,023)(372,723)Maturities of investments 151,964113,235Sales of investments-61,368Purchases of property and equipment (1,516)(3,765)Net cash provided by (used in) investing activities $   48,425$(201,885)Cash flows from financing activities:Payments of capital lease obligations (566)(459)Proceeds from sale of future royalties, net of transaction costs119,589-Issuance of common stock, net of issuance costs479221,958Net cash provided by financing activities $ 119,502$  221,499Effect of exchange rates on cash and cash equivalents (136)(14)Net increase in cash and cash equivalents $ 133,173$      4,730Cash and cash equivalents at beginning of period15,31217,755Cash and cash equivalents at end of period$ 148,485$    22,485SOURCE Nektar Therapeutics