Nektar Therapeutics Reports Second Quarter 2020 Financial Results

 

SAN FRANCISCO, Aug. 6, 2020 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the second quarter ended June 30, 2020.

Cash and investments in marketable securities at June 30, 2020 were approximately $1.2 billion as compared to $1.6 billion at December 31, 2019. This decrease includes the repayment of $254.8 million for Nektar's senior secured notes and accrued interest, which occurred in the second quarter of 2020.

"During the second quarter, Nektar successfully advanced the registrational and early clinical trials across our immune-oncology portfolio which led to the opening of enrollment for the first patients into a new Phase 3 study in adjuvant melanoma for the bempegaldesleukin program," said Howard W. Robin, President and CEO of Nektar. "We now have 5 ongoing registrational trials for bempegaldesleukin, and we continue to make significant progress with our NKTR-262 and NKTR-255 clinical trials, with early data from these programs planned for presentation at this year's Society for Immunotherapy Congress in November."

Mr. Robin continued, "In immunology, following the positive Phase 1b data in lupus patients reported at EULAR, our partner Eli Lilly continues to expand their NKTR-358 development efforts. I am pleased to announce that they are initiating investigator sites and enrolling patients into a new Phase 2 study of NKTR-358 in moderate to severe systemic lupus erythematosus. We are fortunate to be entering the second half of 2020 in a position of exceptional strength – we have built a robust pipeline in oncology and immunology with multiple registrational and earlier stage clinical trials underway and we ended Q2 in a strong financial position with $1.2 billion in cash and investments, and no debt on our balance sheet."

Summary of Q2 2020 Financial Results

Revenue in the second quarter of 2020 was $48.8 million compared to $23.3 million in the second quarter of 2019. The increase was due to the recognition of the $25.0 million milestone from Bristol-Myers Squibb related to the recent initiation of the registrational trial of bempegaldesleukin plus Opdivo® in adjuvant melanoma, which opened enrollment to patients in July. Year-to-date revenue for 2020 was $99.4 million compared to $51.5 million in the first half of 2019. Revenue was higher due to the recognition of $50.0 million in total milestones from Bristol-Myers Squibb related to the start of registrational trials of bempegaldesleukin plus Opdivo® in adjuvant melanoma and muscle-invasive bladder cancer.

Total operating costs and expenses in the second quarter of 2020 were $126.6 million compared to $134.3 million in the second quarter of 2019. The decrease was due to a decrease in research and development (R&D) expense. Total operating costs and expenses in the first half of 2020 were $310.8 million compared to $283.2 million in the first half of 2019. Year-to-date operating costs and expenses increased primarily as a result of impairment of assets and other costs for NKTR-181, partially offset by a decrease in R&D expense. During the first quarter of 2020, Nektar reported $45.2 million in impairment charges and additional costs related to the discontinuation of the NKTR-181 program.

R&D expense in the second quarter of 2020 was $96.4 million compared to $106.7 million for the second quarter of 2019. For the first half of 2020, R&D expense was $205.4 million compared to $225.1 million in the first half of 2019. The decrease for both the second quarter and the first half of 2020 was due primarily to pre-commercial manufacturing costs for NKTR-181 incurred during the first half of 2019.

Net loss for the second quarter of 2020 was $80.0 million or $0.45 basic and diluted loss per share compared to a net loss of $110.3 million or $0.63 basic and diluted loss per share in the second quarter of 2019. Net loss in the first half of 2020 was $218.7 million or $1.23 basic and diluted loss per share compared to a net loss of $229.9 million or $1.32 basic and diluted loss per share in the first half of 2019.

Second Quarter 2020 and Recent Business Highlights:

  • In June 2020, Nektar announced the presentation of results from the Phase 1b study evaluating multiple ascending doses of NKTR-358, a first-in-class T regulatory cell stimulator, which is being developed as a potential therapeutic for a range of autoimmune disorders, including systemic lupus erythematosus (SLE). The data, which were presented during the Annual European Congress of Rheumatology (EULAR 2020) in a virtual congress format, showed that NKTR-358 was safe and well tolerated in patients with mild-to-moderate SLE and led to a marked and selective, dose-dependent expansion of regulatory T cells (Tregs) that was maintained over multiple administrations. 
  • In May 2020, Nektar announced the publication of clinical data from its PIVOT-02 study evaluating bempegaldesleukin in combination with nivolumab in immunotherapy-naïve patients with advanced solid tumors, including melanoma, renal cell carcinoma and non-small cell lung cancer. The data, published in Cancer Discovery, a journal of the American Association for Cancer Research, showed that bempegaldesleukin plus nivolumab resulted in encouraging overall response rates across multiple tumor types, independent of baseline PD-L1 expression, with responses continuing to deepen over time.

The company also announced an upcoming presentation at the following scientific congress:

Cambridge Healthtech Institute's (CHI) 8th Annual Immuno-Oncology Virtual Summit

  • Presentation: "NKTR-255: A Potent NK and CD8 Memory T Cell Mobilizer for Immunotherapy", Madakamutil, L. 
    • Session: Cytokines as Emerging Targets and Biotherapeutics
    • Date: Thursday, October 8th, 9:40 a.m. – 10:00 a.m. Eastern Time

Conference Call to Discuss Second Quarter 2020 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, Thursday, August 6, 2020.

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 August 31, 2020.

To access the conference call, follow these instructions:
   Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)
   Passcode: 7858867 (Nektar Therapeutics is the host)

About Nektar

Nektar Therapeutics is a biopharmaceutical company with a robust, wholly owned R&D pipeline of investigational medicines in oncology and immunology 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: "may," "can," "develop," "progress," "will," "continue," "ensure," "preserve," "advance,"  "potential" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make concerning the potential therapeutic benefits of and future development plans for our investigational products (including bempegaldesleukin, NKTR-262, NKTR-255 and NKTR-358), our ability to safely advance and maintain the integrity of our clinical trials during the COVID-19 pandemic, and the strength of our financial position to develop our pipeline of our investigational products. 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) the extent and duration of the impact of the COVID-19 pandemic on our business, regulatory efforts, research and development, clinical trials (including those being led by us and our partner), and corporate development activities will depend on future developments that are highly uncertain and cannot be accurately predicted, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S. and in other countries, as well as the effectiveness of actions taken globally to contain and treat the disease; (ii) bempegaldesleukin, NKTR-262, NKTR-255 and NKTR-358 are investigational agents and continued research and development efforts for these drug candidates are subject to substantial risks, including negative safety and efficacy findings in ongoing clinical studies (notwithstanding positive findings in earlier preclinical and clinical studies); (iii) 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, decisions and policies of our partners, 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) 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2020. 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 

Opdivo is a registered trademark of Bristol-Myers Squibb Company.

 

 

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

           

ASSETS

June 30, 2020

 

December 31, 2019 (1)

Current assets:

     
 

Cash and cash equivalents

$        58,206

 

$                96,363

 

Short-term investments

980,191

 

1,228,499

 

Accounts receivable

47,245

 

36,802

 

Inventory

12,584

 

12,665

 

Advance payments to contract manufacturers

15,972

 

31,834

 

Other current assets

37,770

 

15,387

   

Total current assets

1,151,968

 

1,421,550

           

Long-term investments

172,166

 

279,119

Property, plant and equipment, net

61,372

 

65,665

Operating lease right-of-use assets

131,458

 

134,177

Goodwill

76,501

 

76,501

Other assets

1,413

 

344

   

Total assets

$   1,594,878

 

$            1,977,356

           

LIABILITIES AND STOCKHOLDERS' EQUITY

     
           

Current liabilities:

     
 

Senior secured notes, net and interest payable

$               -

 

$               252,891

 

Accounts payable

19,246

 

19,234

 

Accrued compensation

22,548

 

11,467

 

Accrued clinical trial expenses

42,794

 

32,626

 

Accrued contract manufacturing expenses

11,050

 

7,304

 

Other accrued expenses

11,424

 

12,338

 

Operating lease liabilities, current portion

15,139

 

12,516

 

Deferred revenue, current portion

1,757

 

5,517

   

Total current liabilities

123,958

 

353,893

           

Operating lease liabilities, less current portion

141,633

 

142,730

Liability related to the sale of future royalties, net

68,284

 

72,020

Deferred revenue, less current portion

2,524

 

2,554

Other long-term liabilities

2,239

 

768

   

Total liabilities

338,638

 

571,965

           

Commitments and contingencies

     
           

Stockholders' equity:

     
 

Preferred stock

-

 

-

 

Common stock

18

 

17

 

Capital in excess of par value

3,338,876

 

3,271,097

 

Accumulated other comprehensive income (loss)

715

 

(1,005)

 

Accumulated deficit

(2,083,369)

 

(1,864,718)

   

Total stockholders' equity

1,256,240

 

1,405,391

 

Total liabilities and stockholders' equity

$   1,594,878

 

$            1,977,356

 

(1) The consolidated balance sheet at December 31, 2019 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, 

     

2020

 

2019

 

2020

 

2019

                   

Revenue:

             

Product sales

$      5,485

 

$      4,346

 

$      8,929

 

$      8,744

Royalty revenue 

9,403

 

7,343

 

19,122

 

18,733

Non-cash royalty revenue related to sale of future royalties

7,684

 

9,091

 

17,579

 

17,321

License, collaboration and other revenue

26,275

 

2,535

 

53,790

 

6,739

Total revenue

48,847

 

23,315

 

99,420

 

51,537

                   

Operating costs and expenses:

             

Cost of goods sold

5,773

 

5,018

 

9,584

 

10,458

Research and development

96,436

 

106,686

 

205,423

 

225,149

General and administrative

24,347

 

22,581

 

50,564

 

47,587

Impairment of assets and other costs for terminated program

-

 

-

 

45,189

 

-

Total operating costs and expenses

126,556

 

134,285

 

310,760

 

283,194

                   

Loss from operations

(77,709)

 

(110,970)

 

(211,340)

 

(231,657)

                   

Non-operating income (expense):

             

Interest expense

(647)

 

(5,231)

 

(6,851)

 

(10,457)

Non-cash interest expense on liability related to sale of future royalties

(6,691)

 

(5,975)

 

(13,659)

 

(12,040)

Interest income and other income (expense), net

5,191

 

11,989

 

13,543

 

24,472

Total non-operating income (expense), net

(2,147)

 

783

 

(6,967)

 

1,975

                   

Loss before provision for income taxes

(79,856)

 

(110,187)

 

(218,307)

 

(229,682)

                   

Provision for income taxes

144

 

99

 

344

 

236

Net loss

$   (80,000)

 

$ (110,286)

 

$ (218,651)

 

$ (229,918)

                   
                   

Basic and diluted net loss per share

$       (0.45)

 

$       (0.63)

 

$      (1.23)

 

$      (1.32)

                   

Weighted average shares outstanding used in computing basic and diluted net loss per share

178,327

 

174,549

 

177,755

 

174,206

 

 

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Six Months Ended June 30,

 

2020

 

2019

Cash flows from operating activities:

     

Net loss

$     (218,651)

 

$     (229,918)

Adjustments to reconcile net loss to net cash used in operating activities:

     

Non-cash royalty revenue related to sale of future royalties

(17,579)

 

(17,321)

Non-cash interest expense on liability related to sale of future royalties 

13,659

 

12,040

Stock-based compensation 

48,607

 

49,907

Depreciation and amortization 

7,692

 

6,132

         Impairment of advance payments to contract manufacturers and equipment for terminated program

20,351

 

-

Accretion of premiums (discounts), net and other non-cash transactions

(782)

 

(6,329)

Changes in operating assets and liabilities:

     

Accounts receivable

(10,443)

 

5,914

Inventory

81

 

(1,807)

Operating leases, net

4,245

 

8,415

Other assets 

(27,214)

 

15,818

Accounts payable 

425

 

3,480

Accrued compensation 

12,469

 

9,773

Other accrued expenses 

8,952

 

15,794

Deferred revenue 

(3,790)

 

(6,715)

Net cash used in operating activities 

(161,978)

 

(134,817)

       

Cash flows from investing activities:

     

Purchases of investments 

(543,631)

 

(603,702)

Maturities of investments 

860,330

 

634,145

Sales of investments 

41,700

 

-

Purchases of property, plant and equipment 

(3,594)

 

(17,291)

Net cash provided by investing activities 

354,805

 

13,152

       

Cash flows from financing activities:

     

Proceeds from shares issued under equity compensation plans

19,120

 

12,200

Repayment of Senior Notes

(250,000)

 

-

Net cash provided by (used in) financing activities 

(230,880)

 

12,200

       

Effect of exchange rates on cash and cash equivalents 

(104)

 

(16)

Net decrease in cash and cash equivalents 

(38,157)

 

(109,481)

Cash and cash equivalents at beginning of period

96,363

 

194,905

Cash and cash equivalents at end of period

$       58,206

 

$       85,424

       

Supplemental disclosures of cash flow information:

     

Cash paid for interest

$         9,742

 

$         9,455

Operating lease right-of-use asset recognized in exchange for lease liabilities

$         2,133

 

$         1,289

 

 

Cision View original content:http://www.prnewswire.com/news-releases/nektar-therapeutics-reports-second-quarter-2020-financial-results-301108006.html

SOURCE Nektar Therapeutics

 
 
Company Codes: NASDAQ-NMS:NKTR
 

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