Nektar Therapeutics Reports Fourth Quarter and Year-End 2018 Financial Results
SAN FRANCISCO, Feb. 28, 2019 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the fourth quarter and full year ended December 31, 2018.
Cash and investments in marketable securities at December 31, 2018 were $1.9 billion as compared to $353.2 million at December 31, 2017.
"2018 was a remarkable year for Nektar accentuated by new collaborations with leading pharmaceutical companies that validate the depth and innovation of our pipeline," said Howard W. Robin, President and Chief Executive Officer of Nektar. "We entered 2019 in an exceptionally strong financial position. We are working closely with the FDA during the ongoing review of our NDA for NKTR-181 while simultaneously preparing for a potential commercial launch later this year. We continue to design and execute on our broad registrational program for NKTR-214 (bempegaldesleukin(1)) with our partner Bristol-Myers Squibb. NKTR-358 is advancing in the ongoing clinical study in lupus patients and two new studies in additional auto-immune conditions are planned to start in 2019. NKTR-262, our TLR agonist is being evaluated in a Phase 1/2 study and finally, NKTR-255, our next I-O candidate is slated to move into the clinic first in patients with multiple myeloma and then in combination with CAR-T therapy."
Summary of Financial Results
Revenue for the fourth quarter of 2018 was $39.8 million as compared to $95.5 million in the fourth quarter of 2017. Revenue in the fourth quarter of 2017 included a total of $60.0 million of non-recurring revenue related to a new sublicense agreement, a contract settlement agreement and the recognition of deferred revenue from several collaboration agreements. Revenue for the year ended December 31, 2018 was $1.2 billion as compared to $307.7 million in 2017 and included the recognition of $1.06 billion of license revenue from the Bristol-Myers Squibb collaboration agreement.
Total operating costs and expenses in the fourth quarter of 2018 were $140.1 million as compared to $119.5 million in the fourth quarter of 2017. Total operating costs and expenses for 2018 were $505.4 million as compared to $367.4 million in 2017. Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.
R&D expense in the fourth quarter of 2018 was $108.9 million as compared to $81.4 million for the fourth quarter of 2017. R&D expense for the year ended December 31, 2018 was $399.5 million as compared to $268.5 million in 2017. R&D expense was higher in the fourth quarter and full year 2018 as compared to the same periods in 2017 primarily because of expenses for our pipeline programs, including the continued development of bempegaldesleukin in Phase 2 and registrational studies and related manufacturing costs, costs related to the NKTR-181 New Drug Application and NKTR-181 pre-commercial manufacturing, Phase 1 clinical studies of NKTR-358, the Phase 1 study of NKTR-262 in combination with bempegaldesleukin and IND-enabling activities for NKTR-255.
General and administrative (G&A) expense was $23.8 million in the fourth quarter of 2018 as compared to $12.3 million in the fourth quarter of 2017. G&A expense for 2018 was $81.4 million as compared to $52.4 million in 2017. G&A expense was higher in the fourth quarter and full year 2018 as compared to the same periods in 2017 primarily due to an increase in non-cash stock-based compensation expense.
Net loss for the fourth quarter of 2018 was $98.2 million or $0.57 basic and diluted loss per share as compared to a net loss of $33.8 million or $0.21 basic and diluted loss per share in the fourth quarter of 2017. Net income for the year ended December 31, 2018 was $681.3 million or $3.78 diluted earnings per share as compared to a net loss of $96.7 million or $0.62 basic and diluted loss per share in 2017.
2018 and Year-to-Date Business Highlights
-- In February 2019, Nektar presented clinical data from first-line Stage
IV urothelial carcinoma patients enrolled in the PIVOT-02 study of
bempegaldesleukin with nivolumab at the 2019 ASCO Genitourinary Cancers
Symposium.
-- In December 2018, Nektar and Gilead entered into a research
collaboration to explore the potential of NKTR-255, an IL-15 agonist, in
virology. The collaboration will evaluate NKTR-255 in combination with
antiretroviral therapies in Gilead's portfolio.
-- In December 2018, Nektar and Bristol-Myers Squibb initiated PIVOT-10, a
potential registrational study evaluating bempegaldesleukin with
nivolumab in cisplatin-ineligible urothelial carcinoma patients whose
tumors express PD-L1 (Combined Positive Score < 10).
-- In December 2018, Nektar and Bristol-Myers Squibb initiated PIVOT-09, a
Phase 3 study of bempegaldesleukin with nivolumab versus tyrosine kinase
inhibitor (TKI) monotherapy in patients with advanced metastatic renal
cell carcinoma.
-- In November 2018, Nektar presented data for first-line Stage IV melanoma
patients from the ongoing PIVOT-02 study at the 2018 Society for
Immunotherapy of Cancer Annual Meeting.
-- In November 2018, Nektar entered into a new clinical collaboration with
Pfizer Inc. to evaluate several combination regimens in multiple cancer
settings including metastatic castration-resistant prostate cancer
(mCRPC) and squamous cell carcinoma of the head and neck (SCCHN). Under
the collaboration, Pfizer will initiate a Phase 1b/2 clinical trial to
evaluate the anti-cancer activity of the combined agents, avelumab,
talazoparib and bempegaldesleukin and separately avelumab, enzalutamide
and bempegaldesleukin.
-- In September 2018, Nektar and Bristol-Myers Squibb initiated the Phase 3
study of bempegaldesleukin with nivolumab as compared to nivolumab
monotherapy in participants with previously untreated unresectable or
metastatic melanoma.
-- In July 2018, 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. In February 2019, Nektar received notification from the
FDA that the review period for NKTR-181 has been extended by three
months. The new Prescription Drug User Fee Act (PDUFA) date is now
August 29, 2019. The FDA extended the action date to allow time to
review data from two additional preclinical studies that Nektar
conducted which were requested by the FDA early on in our review
process. The new preclinical data are supportive of the company's abuse
liability package included in the NDA filing for NKTR-181.
-- In June 2018, Nektar presented data from the ongoing PIVOT study for
bempegaldesleukin with nivolumab at the 2018 ASCO Meeting. Pre-specified
efficacy criteria were achieved in three tumor types: first-line
melanoma, first-line renal cell carcinoma and first-line urothelial
cancer.
-- In May 2018, Nektar began dosing patients with systemic lupus
erythematosus in a new Phase 1b multiple ascending dose study of
NKTR-358, an IL-2 regulatory T cell stimulator, designed to correct the
underlying immune system dysfunction found in patients with immune
disorders.
-- In April 2018, Nektar announced a new clinical collaboration agreement
with Takeda to evaluate bempegaldesleukin with TAK-659, a dual SYK and
FLT-3 inhibitor in liquid and solid tumors. The first of these studies,
a Phase 1b study in patients with Non-Hodgkin Lymphoma, was initiated in
January of 2019.
-- In April 2018, Nektar presented preclinical data for its immuno-oncology
pipeline at the 2018 AACR Annual Meeting. Preclinical data presented by
Nektar researchers and collaborators demonstrated that bempegaldesleukin
combines with multiple modalities including TLR agonism and adoptive
cell therapy.
-- In April 2018, Nektar began dosing patients in the REVEAL Phase 1/2
study, which will evaluate NKTR-262, Nektar's wholly-owned novel
toll-like receptor 7/8 agonist, in combination with bempegaldesleukin.
The dose-escalation phase of the study is continuing.
-- In February 2018, Nektar and Bristol-Myers Squibb entered into a global
development and commercialization agreement to evaluate the full
potential of bempegaldesleukin with nivolumab in more than 20
indications in 9 tumor types.
The company also announced upcoming presentations and speaking engagements at the following scientific congresses during the first half of 2019:
ASCO-SITC Clinical Immuno-Oncology Symposium, San Francisco, CA
-- Oral presentation (Abstract #28): "Phase Ib: Preliminary clinical
activity and immune activation for NKTR-262 (TLR 7/8 agonist) plus
NKTR-214 (CD122-biased agonist) in patients (pts) with locally advanced
or metastatic solid tumors (REVEAL Phase Ib/II Trial)"
-- Presenter: Dr. Adi Diab, MD Anderson Cancer Center
-- Session: Oral Abstract Session B
-- Session Date & Time: March 1, 2019, 1:00 p.m.-2:15 p.m. Pacific Time
26(th) International Molecular Medicine Tri-Conference, San Francisco, CA
-- Presentation Title: "Advanced Cytokine Engineering for Immunotherapy"
-- Presenter: Steven Doberstein, Ph.D., Nektar Therapeutics
-- Session: Emerging Immuno-Oncology Targets Session
-- Session Date & Time: March 12, 2019, at 11:25 a.m. Pacific Time
Keystone Symposia Cancer Immunotherapy: Mechanistic Insights to Improve Clinical Benefit, Whistler, BC, Canada
-- Presentation Title: "Intratumoral expansion of CD8+ T cells and
depletion of Tregs after treatment with NKTR-214, a first-in-class,
CD122-preferential IL-2 pathway agonist"
-- Presenter: Willem Overwijk, Ph.D., Nektar Therapeutics
-- Session: Immune Checkpoints: Basic Mechanisms and Novel Targets
-- Session Date & Time: March 13, 2019, 8:00 a.m.-11:00 a.m. Pacific
Time
CHI's Fourth Annual Immuno-Oncology Summit Europe, London, UK
-- Presentation Title: "Exploratory Studies up to IND with NKTR-255, a
Memory T-Cell Stimulating Cytokine"
-- Presenter: Saul Kivimae, Ph.D., Nektar Therapeutics
-- Session: Importance of Cytokines/Innovative Approaches with Clinical
Benefit
-- Session Date and Time: March 19, 2019, at 16:45 Greenwich Mean Time
ICI-IO Combinations Summit, Boston, MA
-- Presentation Title: "Supercharging the Tumor Microenvironment: Lessons
from NKTR-214 and OPDIVO"
-- Presenter: Willem Overwijk, Ph.D., Nektar Therapeutics
-- Session Date and Time: March 20, 2019, at 11:30 a.m. Eastern Time
American Association for Cancer Research (AACR) Annual Meeting 2019, Atlanta, GA
-- Abstract 2256/Poster Board 15: "Combination of neoantigen DNA plasmid
vaccine VB10.NEO and NKTR-214, a CD122-biased immunostimulatory
cytokine, induces strong neoantigen-specific T cell responses and
sustained tumor regression in pre-clinical models," Granum, S., et al.
-- Session: Clinical Research - Combination Immunotherapies 1
-- Session Date and Time: April 1, 2019, 1:00 p.m.-5:00 p.m. Eastern
Time
-- Location: Georgia World Congress Center, Exhibit Hall B, Poster
Section 19
-- Abstract 3210/Poster Board 20: "A potential immunotherapeutic approach
for the treatment of osteosarcoma," Wahba, A., et al.
-- Session: Immunology - Combination Immunotherapies 2
-- Session Date & Time: Tuesday, April 2, 2019, 8:00 a.m.-12:00 p.m.
Eastern Time
-- Location: Georgia World Congress Center, Exhibit Hall B, Poster
Section 2
-- Abstract 3265/Poster Board 15: "NKTR-255, a polymer-conjugated IL-15
enhances anti-tumor NK cell responses and synergizes with monoclonal
antibodies to provide long-term survival in human lymphoma model,"
Miyazaki, T., et al.
-- Session: Immunology - Novel Immunomodulatory Agents
-- Session Date and Time: April 2, 2019, 8:00 a.m.-12:00 p.m. Eastern
Time
-- Location: Georgia World Congress Center, Exhibit Hall B, Poster
Section 25
15(th) Annual PEGS Boston Summit, Boston, MA
-- Keynote: "Harnessing Potent Cytokine Agonist Pathways by Polymer
Engineering to Develop Novel Immune Therapeutic Agents"
-- Presenter: Loui Madakamutil, Ph.D., Nektar Therapeutics
-- Session: Latest Developments in Agonist Immunotherapy - Cytokines
and OX40 Targets
-- Presentation Date and Time: Thursday, April 11, 2019 1:50 p.m.
Eastern Time
6(th) Immunotherapy of Cancer Conference (ITOC6), Vienna, Austria
-- Poster P2.12: "Mechanism of Action of NKTR-214, a first-in-class,
CD122-preferential IL-2 pathway agonist"
-- Presenter: Willem Overwijk, Ph.D., Nektar Therapeutics
-- Session: Emerging Concepts/Novel Agents
-- Session Dates and Times: April 11, 2019, at 18.20 Central European
Time and April 12, 2019, from 14.00-14.30 Central European Time
Conference Call to Discuss Fourth Quarter and Year-End 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, Thursday, February 28, 2019. 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/events-and-presentations/events. The web broadcast of the conference call will be available for replay through Thursday, March 28, 2019.
To access the conference call, follow these instructions:
Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)
Passcode: 4988768 (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
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, autoimmune disease and chronic pain. We leverage our 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 Nektar and its drug development programs and capabilities may be found online at www.nektar.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains uncertain or forward-looking statements which can be identified by words such as: "advance," "continue," "may," "will" 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 investigational products (including bempegaldesleukin, NKTR-181, NKTR-358, NKTR-262 and NKTR-255), the timing of receiving a response in connection with our pending new drug application, "NDA" for NKTR-181, and the results of clinical 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) the timing of the commencement or end of clinical studies 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, and enrollment competition; (ii) the timing and probability of regulatory approval, if any, for NKTR-181 is uncertain and difficult to predict; (iii) scientific discovery of new medical breakthroughs is an inherently uncertain process and the future success of applying our technology platform to drug candidates (such as bempegaldesleukin, NKTR-262, NKTR-358, and NKTR-255) is therefore highly uncertain and unpredictable and one or more of these programs may fail; (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 Nektar's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 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.
1. rINN (recommended International Nonproprietary Name)
Contact:
For Investors:
Jennifer Ruddock of Nektar Therapeutics
415-482-5585
Ashleigh Barreto of Nektar Therapeutics
628-895-0694
For Media:
Jodi Sievers of Nektar Therapeutics
415-482-5593
Dan Budwick of 1AB
973-271-6085
dan@1abmedia.com
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS
December 31, 2018
December 31, 2017 (1)
Current assets:
Cash and cash
equivalents $194,905 $4,762
Short-term
investments 1,140,445 291,370
Accounts
receivable 43,213 5,014
Inventory 11,381 10,726
Advance payments
to contract
manufacturers 26,450 7,155
Other current
assets 21,293 7,793
Total current assets 1,437,687 326,820
Long-term investments 582,889 57,088
Property, plant and equipment, net 48,851 47,463
Goodwill 76,501 76,501
Other assets 4,244 994
Total assets $2,150,172 $508,866
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,854 $4,782
Accrued
compensation 9,937 8,263
Accrued contract
manufacturing
expenses 23,841 3,845
Accrued clinical
trial expenses 14,700 9,461
Other accrued
expenses 9,087 6,219
Interest payable 4,198 4,198
Deferred
revenue,
current portion 13,892 18,949
Other current
liabilities 493 446
Total current liabilities 82,002 56,163
Senior secured notes, net 246,950 245,207
Liability related to the sale of future
royalties, net 82,911 94,655
Deferred revenue, less current portion 10,744 19,021
Other long-term liabilities 9,990 5,992
Total liabilities 432,597 421,038
Commitments and contingencies
Stockholders' equity:
Preferred stock
Common stock 17 15
Capital in
excess of par
value 3,147,925 2,207,865
Accumulated
other
comprehensive
loss (6,316) (2,111)
Accumulated
deficit (1,424,051) (2,117,941)
Total stockholders' equity 1,717,575 87,828
Total
liabilities and
stockholders'
equity $2,150,172 $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 December 31, Year Ended December 31,
2018 2017 2018 2017
Revenue:
Product sales $4,360 $7,791 $20,774 $32,688
Royalty revenue 12,078 9,574 41,976 33,527
Non-cash royalty revenue
related to sale of future
royalties 8,971 9,164 33,308 30,531
License, collaboration and
other revenue 14,417 68,937 1,097,265 210,965
Total revenue 39,826 95,466 1,193,323 307,711
Operating costs and
expenses:
Cost of goods sold 7,461 9,753 24,412 30,547
Research and development 108,883 81,429 399,536 268,461
General and administrative 23,777 12,337 81,443 52,364
Impairment of equipment and
other costs for terminated
program 15,981 15,981
Total operating costs and
expenses 140,121 119,500 505,391 367,353
Income (loss) from
operations (100,295) (24,034) 687,932 (59,642)
Non-operating income
(expense):
Interest expense (5,415) (5,633) (21,582) (22,085)
Non-cash interest expense
on liability related to
sale of future royalties (6,388) (5,334) (21,196) (18,869)
Interest income and other
income (expense), net 12,048 1,357 37,571 4,520
Total non-operating income
(expense), net 245 (9,610) (5,207) (36,434)
Income (loss) before
provision for income taxes (100,050) (33,644) 682,725 (96,076)
Provision (benefit) for
income taxes (1,838) 182 1,412 616
Net income (loss) $(98,212) $(33,826) $681,313 $(96,692)
Net income (loss) per share:
Basic $(0.57) $(0.21) $4.02 $(0.62)
Diluted $(0.57) $(0.21) $3.78 $(0.62)
Weighted average shares outstanding
used in computing net income (loss)
per share:
Basic 173,271 158,324 169,600 155,953
Diluted 173,271 158,324 180,119 155,953
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December 31,
2018 2017
Cash flows from operating activities:
Net income (loss) $681,313 $(96,692)
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 (33,308) (30,531)
Non-cash interest expense on
liability related to sale of future
royalties 21,196 18,869
Stock-based compensation 88,101 36,615
Depreciation and amortization 10,870 14,741
Impairment of equipment from
terminated program 15,081
Accretion of discounts, net and other
non-cash transactions (10,952) (881)
Changes in operating assets and
liabilities:
Accounts receivable (25,505) 10,664
Inventory (655) 383
Other assets (31,652) (4,800)
Accounts payable 971 2,074
Accrued compensation 1,674 (10,017)
Other accrued expenses 27,947 7,277
Deferred revenue (15,331) (28,269)
Other liabilities 3,545 (14,928)
Net cash provided by (used in)
operating activities 718,214 (80,414)
Cash flows from investing activities:
Purchases of investments (2,271,250) (404,425)
Maturities of investments 890,957 347,743
Sales of investments 11,963 37,549
Purchases of property, plant and
equipment (14,239) (9,676)
Sales of property and plant 2,633
Net cash used in investing activities (1,379,936) (28,809)
Cash flows from financing activities:
Payment of capital lease obligations (5,131)
Issuance of common stock 790,231
Proceeds from shares issued under
equity compensation plans 61,735 59,522
Net cash provided by financing
activities 851,966 54,391
Effect of exchange rates on cash and
cash equivalents (101) (46)
Net increase (decrease) in cash and
cash equivalents 190,143 (54,878)
Cash and cash equivalents at
beginning of year 4,762 59,640
Cash and cash equivalents at end of
year $194,905 $4,762
Supplemental disclosure of cash flow
information:
Cash paid for interest $19,471 $20,116
Cash paid for income taxes $618 $556
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