SAN CARLOS, Calif., Nov. 4 Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the third quarter ended September 30, 2009.
Advertisement
Net loss for the quarter ended September 30, 2009 improved to $31.0 million or $0.33 per share, as compared to a net loss of $37.0 million or $0.40 per share in the third quarter of 2008.
Advertisement
Nektar continued to make improvements to its operating efficiencies as compared to a year ago. Total operating costs and expenses were down 30% to $39.1 million in the third quarter of 2009 as compared to $56.0 million in the third quarter of 2008. For the first nine months of 2009, total operating costs and expenses were down 29% to $122.6 million as compared to $171.6 million in the first nine months of 2008.
"We are extremely pleased with our success in the third quarter," said Howard W. Robin, President and Chief Executive Officer of Nektar. "We signed a landmark collaboration with AstraZeneca for NKTR-118 and NKTR-119 that highlights the compelling value we are creating in our clinical pipeline. We are also making great progress with NKTR-102, with enrollment in our Phase 2 ovarian cancer study completed ahead of schedule. Our clinical results continue to validate the potential of Nektar's proprietary advanced polymer conjugate technology in creating important new therapeutics."
Research and development expense was $23.5 million in the third quarter of 2009 as compared to $38.3 million for the same quarter in 2008. For the first nine months of 2009, research and development expense was $71.5 million as compared to $109.1 million in the same period in 2008. Included in the $71.5 million of overall research and development expenses in the first nine months of 2009 is approximately $40.0 million of investment in Nektar preclinical and clinical development programs.
Revenue for the three month period ended September 30, 2009 was $10.2 million compared to revenue of $21.4 million in the third quarter of 2008. Revenue year-to-date September 30, 2009 was $32.9 million as compared to revenue of $61.8 million in the same period in 2008. This decrease in revenue is largely the result of lower contract research and manufacturing revenues primarily resulting from the sale of certain of the company's pulmonary assets to Novartis which occurred on December 31, 2008.
Cash, cash equivalents, and short-term investments at September 30, 2009 were $275.7 million. Not included in this cash balance is the cash payment of $125 million received from AstraZeneca in October 2009 as a result of the collaboration for NKTR-118 and NKTR-119.
Conference Call to Discuss Third Quarter 2009 Financial Results
A conference call to review results will be held today, Wednesday, November 4, 2009 at 2 PM Pacific Time.
Details are below:
Howard Robin, president and chief executive officer, and John Nicholson, chief financial officer, will host a conference call beginning at 5:00 p.m. Eastern Time (ET)/2:00 p.m. Pacific Time (PT) on Wednesday, November 4, 2009.
To access the conference call, follow these instructions:
Dial: 866-356-3095 (U.S.); 617-597-5391 (international)
Passcode: 27967367
An audio replay will also be available shortly following the call through Wednesday, November 18, 2009 and can be accessed by dialing 888-286-8010 (U.S.); or 617-801-6888 (international) with a passcode of 60261022.
About Nektar
Nektar Therapeutics is a biopharmaceutical company developing novel therapeutics based on its PEGylation and advanced polymer conjugation technology platforms. Nektar's technology and drug development expertise have enabled nine approved products in the U.S. or Europe for leading biopharmaceutical company partners, including UCB's Cimzia® for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS® for hepatitis C and Amgen's Neulasta® for neutropenia. Nektar has created a robust pipeline of potentially high-value therapeutics to address unmet medical needs by leveraging and expanding its technology platforms to improve and enable molecules. Nektar is also currently conducting clinical and preclinical programs in oncology, pain and other therapeutic areas. Nektar recently entered into an exclusive worldwide license agreement with AstraZeneca for its oral NKTR-118 program to treat opioid-induced constipation and its NKTR-119 program for the treatment of pain without constipation side effects. NKTR-102, PEGylated irinotecan, is currently being evaluated in Phase 2 clinical studies for the treatment of ovarian, breast and colorectal cancers. NKTR-105, PEGylated docetaxel, is currently in a Phase 1 clinical study in cancer patients with refractory solid tumors.
Nektar is headquartered in San Carlos, California, with additional R&D 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.
This press release contains forward-looking statements that reflect management's current views regarding the progress and potential of Nektar's pipeline of proprietary drug candidates, the value and potential of the Nektar's technology platform, and the value and potential of certain of Nektar's collaborations with third parties. These forward-looking statements involve numerous risks and uncertainties, including but not limited to: (i) Nektar's proprietary product candidates and those of its collaboration partners are in various stages of clinical development and the risk of failure is high and can unexpectedly occur at any stage of development prior to regulatory approval for numerous reasons including, without limitation, safety and efficacy findings even after initial preclinical and clinical results have been positive; (ii) the timing or success of the commencement or end of clinical trials and commercial launch of partnered products may be delayed or unsuccessful due to slower than anticipated patient enrollment, drug manufacturing challenges, changing standards of care, clinical trial design, clinical outcomes, or delay or failure in obtaining regulatory approval in one or more important markets; (iii) Nektar's patent applications for its proprietary or partner product candidates may not issue, patents that have issued may not be enforceable, or intellectual property licenses from third parties may be required in the future; (iv) the outcome of any future intellectual property or other litigation related to Nektar's proprietary product candidates or complex commercial agreements; (v) if Nektar is unable to establish and maintain collaboration partnerships on attractive commercial terms, our business, results of operations and financial condition could suffer; and (vi) certain other important risks and uncertainties set forth in Nektar's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2009, the Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 filed on August 5, 2009, the Current Report on Form 8-K filed today, and the most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 to be filed on or about November 5, 2009. Actual results could differ materially from the forward-looking statements contained in this press release. Nektar undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.
NEKTAR THERAPEUTICS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share information) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue: Product sales and royalties $7,461 $9,474 $24,456 $28,855 Collaboration and other 2,762 11,965 8,466 32,977 ----- ------ ----- ------ Total revenue 10,223 21,439 32,922 61,832 Operating costs and expenses: Cost of goods sold 5,691 5,349 21,021 18,020 Other cost of revenue - - 6,821 Research and development 23,474 38,265 71,514 109,138 General and administrative 9,917 12,386 30,024 37,661 ----- ------ ------ ------ Total operating costs and expenses 39,082 56,000 122,559 171,640 ------ ------ ------- ------- Loss from operations (28,859) (34,561) (89,637) (109,808) Non-operating income (expense): Interest income 560 2,375 3,160 10,578 Interest expense (2,928) (3,988) (9,213) (11,835) Other income (expense), net 120 (588) 368 483 --- ---- --- --- Total non- operating income (expense) (2,248) (2,201) (5,685) (774) Loss before provision for income taxes (31,107) (36,762) (95,322) (110,582) (Benefit) provision for income taxes (140) 276 (479) 536 ---- --- ---- --- Net loss $(30,967) $(37,038) $(94,843) $(111,118) ======== ======== ======== ========= Basic and diluted net loss per share $(0.33) $(0.40) $(1.02) $(1.20) Shares used in computing basic and diluted net loss per share 92,789 92,425 92,621 92,413 NEKTAR THERAPEUTICS CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) ASSETS September 30, 2009 December 31, 2008 (1) ------------------ ----------------- Current assets: Cash and cash equivalents $32,777 $155,584 Short-term investments 242,901 223,410 Accounts receivable, net of allowance 6,330 11,161 Inventory 8,930 9,319 Other current assets 7,275 6,746 ----- ----- Total current assets $298,213 $406,220 Property and equipment, net 74,624 73,578 Goodwill 76,501 76,501 Other assets 3,313 4,237 ----- ----- Total assets $452,651 $560,536 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $6,397 $13,832 Accrued compensation 9,711 11,570 Accrued clinical trial expenses 13,012 17,622 Accrued expenses 7,132 9,923 Deferred revenue, current portion 9,547 10,010 Other current liabilities 3,558 5,417 ----- ----- Total current liabilities $49,357 $68,374 Convertible subordinated notes 214,955 214,955 Capital lease obligations 19,228 20,347 Deferred revenue 53,308 55,567 Deferred gain 5,245 5,901 Other long-term liabilities 4,458 5,238 ----- ----- Total liabilities $346,551 $370,382 Commitments and contingencies Stockholders' equity: Preferred stock $- $- Common stock 9 9 Capital in excess of par value 1,323,907 1,312,796 Accumulated other comprehensive income 1,117 1,439 Accumulated deficit (1,218,933) (1,124,090) ---------- ---------- Total stockholders' equity $106,100 $190,154 -------- -------- Total liabilities and stockholders' equity $452,651 $560,536 ======== ======== (1) The consolidated balance sheet at December 31, 2008 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 CASH FLOWS (In thousands) (unaudited) Nine Months Ended September 30, ----------------- 2009 2008 ---- ---- Cash flows from operating activities: $(94,843) $(111,118) Net loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 11,076 18,610 Stock-based compensation 7,290 6,955 Other non-cash transactions (124) 759 Changes in assets and liabilities: Decrease (increase) in trade accounts receivable 4,505 13,122 Decrease (increase) in inventory 389 2,326 Decrease (increase) in other assets (1,272) 2,659 Increase (decrease) in accounts payable (4,047) (1,476) Increase (decrease) in accrued compensation (1,859) (229) Increase (decrease) in accrued clinical trial expenses (4,610) 4,659 Increase (decrease) in accrued expenses (1,413) (1,390) Increase (decrease) in accrued expenses to contract manufacturers - (40,444) Increase (decrease) in deferred revenue (2,722) (11,972) Increase (decrease) in other liabilities (2,823) 2,474 ------ ----- Net cash used in operating activities $(90,453) $(115,065) Cash flows from investing activities: Purchases of investments (298,054) (411,417) Sales of investments 11,923 28,590 Maturities of investments 266,202 506,348 Purchases of property and equipment (10,763) (15,064) Transaction costs from Novartis pulmonary asset sale (4,440) - Investment in Pearl Therapeutics Inc. - (4,236) --- ------ Net cash (used in) provided by investing activities $(35,132) $104,221 Cash flows from financing activities: Payments of loan and capital lease obligations (935) (1,910) Proceeds from issuances of common stock 3,821 477 ----- --- Net cash provided by (used in) financing activities $2,886 $(1,433) ------ ------- Effect of exchange rates on cash and cash equivalents (108) (303) ---- ---- Net decrease in cash and cash equivalents $(122,807) $(12,580) Cash and cash equivalents at beginning of period 155,584 76,293 ------- ------ Cash and cash equivalents at end of period $32,777 $63,713 ======= =======
SOURCE Nektar Therapeutics
