Nektar Therapeutics Reports Second Quarter 2021 Financial Results

 

SAN FRANCISCO, Aug. 5, 2021 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the second quarter ended June 30, 2021.

Cash and investments in marketable securities at June 30, 2021 were approximately $1.1 billion as compared to $1.2 billion at December 31, 2020.

"We continue to execute on our clinical development strategy, setting the stage for a steady cadence of upcoming data readouts that will highlight the value of our novel cytokine portfolio," said Howard W. Robin, President and CEO of Nektar. "For bempegaldesleukin plus nivolumab, the first three of our five registrational studies in melanoma, renal cell carcinoma and bladder cancer remain on track for top line data in the first half of 2022. We are also evaluating the combination of bempegaldesleukin plus pembrolizumab and look forward to presenting data from the PROPEL study in patients with metastatic non-small cell lung cancer in the second half of 2021."

Mr. Robin continued, "We also have a robust development program for NKTR-255, our second major cytokine candidate in oncology. Our initial efforts include two Phase 1 clinical studies in combination with ADCC antibodies, one in hematological malignancies and one in solid tumors, and we look forward to sharing data from these studies before the end of the year. Finally, as part of the broad development program for NKTR-358, our T regulatory cell IL-2 agent, our partner Eli Lilly is conducting 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 second quarter of 2021 was $28.3 million as compared to $48.8 million in the second quarter of 2020. The decrease in revenue relative to 2020 was due to the recognition in the second quarter of 2020 of the $25.0 million milestone from Bristol-Myers Squibb for the initiation of the registrational trial of bempegaldesleukin plus Opdivo® in adjuvant melanoma. Revenue for the first half of 2021 was $52.0 million as compared to $99.4 million in the first half of 2020. Revenue was lower relative to 2020 due to the recognition in the first half 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 second quarter of 2021 were $138.5 million as compared to $126.6 million in the second quarter of 2020. The increase was due to increases in research and development (R&D) expense and general and administrative (G&A) expense in the second quarter of 2021. Total operating costs and expenses in the first half of 2021 were $271.6 million as compared to $310.8 million in the first half 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 second quarter of 2021 was $101.3 million as compared to $96.4 million for the second quarter of 2020. For the first half of 2021, R&D expense was $196.9 million as compared to $205.4 million in the first half of 2020. 

G&A expense was $29.6 million in the second quarter of 2021 and $24.3 million in the second quarter of 2020. For the first half of 2021, G&A expense was $61.2 million compared to $50.6 million in the first half of 2020. G&A expense increased primarily due to an increase in pre-commercial costs for bempegaldesleukin.

Net loss for the second quarter of 2021 was $125.5 million or $0.69 basic and diluted loss per share as compared to a net loss of $80.0 million or $0.45 basic and diluted loss per share in the second quarter of 2020. Net loss in the first half of 2021 was $248.5 million or $1.37 basic and diluted loss per share as compared to a net loss of $218.7 million or $1.23 basic and diluted loss per share in the first half of 2020.

Second Quarter 2021 and Recent Business Highlights:

  • In May 2021, Nektar announced the first publication of preclinical data for NKTR-358 in the Journal of Translational Autoimmunity. The published data demonstrate that NKTR-358, a first-in-class composition of stable PEG conjugates of IL-2, has the ability to elicit sustained and preferential proliferation and activation of T regulatory cells in vivo without corresponding increases in T effector cells, supporting its potential in a broad range of autoimmune and inflammatory disorders. Nektar's partner, Eli Lilly & Co., is conducting a Phase 2 study in patients with systemic lupus erythematosus, a Phase 2 study in patients with ulcerative colitis, as well as two separate Phase 1b studies in patients with atopic dermatitis and psoriasis.
  • In May 2021, Nektar announced the first publication of preclinical data from its second major immuno-oncology cytokine program, NKTR-255, in the Journal for ImmunoTherapy of Cancer. NKTR-255 is a novel recombinant human Interleukin-15 (rhIL-15) receptor agonist designed to activate the IL-15 pathway to expand both natural killer cells and memory CD8+ T cell populations. The published data demonstrate that NKTR-255 retains the full spectrum of IL-15 biology, but with improved pharmacologic properties and anti-tumor activity versus other rhIL-15 agonists.

Nektar also announced upcoming presentations at the following scientific congress:

2021 European Society of Medical Oncology
September 16-21, 2021 (Virtual)

  • Poster Presentation: "Evaluation of concordance between PD-L1 immunohistochemistry 28-8 and 22C3 pharmDx assays in metastatic urothelial carcinoma (mUC) in PIVOT-10", Siefker-Radtke, A., et al.
  • Trial in Progress Poster: "A Phase 1b/2, open-label, multicenter, dose-escalation and dose-expansion study of NKTR-255 plus cetuximab as a salvage regimen in patients with solid tumors", Altan, M., et al.

Conference Call to Discuss Second 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, August 5, 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 September 5, 2021.

To access the conference call, follow these instructions:

Dial: (877) 881-2183 (U.S.); (970) 315-0453 (International)
Conference ID: 4576644 (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," "on track for" 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, and the timing of the initiation of clinical studies and 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 May 7, 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

NEKTAR THERAPEUTICS

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In thousands, except par value)

 

(Unaudited)

 
                       

ASSETS

 

June 30, 2021

 

December 31, 2020

(1)

Current assets:

                 
 

Cash and cash equivalents

         

$            152,345

 

$                   198,955

 
 

Short-term investments

         

847,720

 

862,941

 
 

Accounts receivable

         

28,871

 

38,889

 
 

Inventory

         

14,616

 

15,292

 
 

Other current assets

         

12,596

 

21,928

 
   

Total current assets

         

1,056,148

 

1,138,005

 
                       

Long-term investments

         

57,397

 

136,662

 

Property, plant and equipment, net

         

58,599

 

59,662

 

Operating lease right-of-use assets

         

122,362

 

126,476

 

Goodwill

           

76,501

 

76,501

 

Other assets

         

344

 

1,461

 
   

Total assets

         

$         1,371,351

 

$               1,538,767

 
                       

LIABILITIES AND STOCKHOLDERS' EQUITY

         
                       

Current liabilities:

                 
 

Accounts payable

         

19,701

 

22,139

 
 

Accrued compensation

         

28,665

 

14,532

 
 

Accrued clinical trial expenses

         

41,085

 

44,207

 
 

Accrued contract manufacturing expenses

       

8,392

 

11,310

 
 

Other accrued expenses

         

16,404

 

9,676

 
 

Operating lease liabilities, current portion

       

16,776

 

13,915

 
   

Total current liabilities

         

131,023

 

115,779

 
                       

Operating lease liabilities, less current portion

       

131,658

 

136,373

 

Development derivative liability

         

11,607

 

-

 

Liability related to the sale of future royalties, net

     

188,072

 

200,340

 

Other long-term liabilities

         

4,016

 

8,980

 
   

Total liabilities

         

466,376

 

461,472

 
                       

Commitments and contingencies

                 
                       

Stockholders' equity:

                 
 

Preferred stock

         

-

 

-

 
 

Common stock

         

18

 

18

 
 

Capital in excess of par value

         

3,466,001

 

3,388,730

 
 

Accumulated other comprehensive loss

       

(3,400)

 

(2,295)

 
 

Accumulated deficit

         

(2,557,644)

 

(2,309,158)

 
   

Total stockholders' equity

         

904,975

 

1,077,295

 
 

Total liabilities and stockholders' equity

       

$         1,371,351

 

$              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.

 

 

NEKTAR THERAPEUTICS

       

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

       

(In thousands, except per share information)

       

(Unaudited)

       
                             
               

Three months ended June 30,

 

Six months ended June 30,

               

2021

 

2020

 

2021

 

2020

                             

Revenue:

                       
 

Product sales

         

$               7,846

 

$                      5,485

 

$             12,641

 

$                      8,929

 

Royalty revenue 

         

-

 

9,403

 

-

 

19,122

 

Non-cash royalty revenue related to sale of future royalties

     

20,456

 

7,684

 

39,254

 

17,579

 

License, collaboration and other revenue

       

28

 

26,275

 

82

 

53,790

Total revenue

         

28,330

 

48,847

 

51,977

 

99,420

                             

Operating costs and expenses:

                       
 

Cost of goods sold

         

7,667

 

5,773

 

13,423

 

9,584

 

Research and development

         

101,313

 

96,436

 

196,917

 

205,423

 

General and administrative

         

29,555

 

24,347

 

61,234

 

50,564

 

Impairment of assets and other costs for terminated program

   

-

 

-

 

-

 

45,189

Total operating costs and expenses

         

138,535

 

126,556

 

271,574

 

310,760

                             
 

Loss from operations

         

(110,205)

 

(77,709)

 

(219,597)

 

(211,340)

                             

Non-operating income (expense):

                       
 

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

   

(13,089)

 

(6,691)

 

(26,385)

 

(13,659)

 

Change in fair value of development derivative liability

     

(2,713)

 

-

 

(4,312)

 

-

 

Interest income and other income (expense), net

     

845

 

5,191

 

2,257

 

13,543

 

Interest expense

         

-

 

(647)

 

-

 

(6,851)

Total non-operating income (expense), net

       

(14,957)

 

(2,147)

 

(28,440)

 

(6,967)

                             

Loss before provision for income taxes

         

(125,162)

 

(79,856)

 

(248,037)

 

(218,307)

                             

Provision for income taxes

         

357

 

144

 

449

 

344

Net loss

           

$          (125,519)

 

$                   (80,000)

 

$          (248,486)

 

$                 (218,651)

                             
                             

Basic and diluted net loss per share

         

$                (0.69)

 

$                       (0.45)

 

$                (1.37)

 

$                       (1.23)

                             

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

 

182,698

 

178,327

 

182,038

 

177,755

 

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

               

Six months ended June 30,

               

2021

 

2020

Cash flows from operating activities:

             

Net loss

           

$          (248,486)

 

$                 (218,651)

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

         
 

Non-cash royalty revenue related to sale of future royalties

     

(39,254)

 

(17,579)

 

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

   

26,385

 

13,659

 

Change in fair value of development derivative liability

     

4,312

 

-

 

Non-cash research and development expense

     

5,795

 

-

 

Stock-based compensation 

         

47,612

 

48,607

 

Depreciation and amortization 

         

7,090

 

7,692

 

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

-

 

20,351

 

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

 

4,090

 

(782)

Changes in operating assets and liabilities:

             
 

Accounts receivable

         

10,018

 

(10,443)

 

Inventory

         

676

 

81

 

Operating leases, net

         

2,260

 

4,245

 

Other assets 

         

11,585

 

(27,214)

 

Accounts payable 

         

(2,101)

 

425

 

Accrued compensation 

         

14,133

 

12,469

 

Other accrued expenses 

         

(3,496)

 

8,952

 

Deferred revenue 

         

(605)

 

(3,790)

Net cash used in operating activities 

         

(159,986)

 

(161,978)

                     

Cash flows from investing activities:

             
 

Purchases of investments 

         

(527,887)

 

(543,631)

 

Maturities of investments 

         

612,419

 

860,330

 

Sales of investments

         

5,035

 

41,700

 

Purchases of property, plant and equipment 

     

(6,157)

 

(3,594)

Net cash provided by investing activities 

       

83,410

 

354,805

                     

Cash flows from financing activities:

             
 

Proceeds from shares issued under equity compensation plans

   

28,523

 

19,120

 

Cash receipts from development derivative liability

     

1,500

 

-

 

Repayment of senior notes

         

-

 

(250,000)

Net cash provided by (used in) financing activities 

       

30,023

 

(230,880)

                     

Effect of foreign exchange rates on cash and cash equivalents

     

(57)

 

(104)

Net decrease in cash and cash equivalents

     

(46,610)

 

(38,157)

Cash and cash equivalents at beginning of period

     

198,955

 

96,363

Cash and cash equivalents at end of period

       

$            152,345

 

$                     58,206

                     

Supplemental disclosure 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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SOURCE Nektar Therapeutics

 
 
Company Codes: NASDAQ-NMS:NKTR
 

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