Nektar Therapeutics Reports Financial Results for the Third Quarter of 2019
SAN FRANCISCO, Nov. 6, 2019 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the third quarter ended September 30, 2019.
Cash and investments in marketable securities at September 30, 2019 were approximately $1.7 billion as compared to $1.9 billion at December 31, 2018.
"We continue to make steady progress with our diverse portfolio of immuno-oncology and immunology programs," said Howard W. Robin, President and CEO of Nektar. "With our partner Bristol-Myers Squibb, we are conducting registrational trials evaluating the combination of bempegaldesleukin with nivolumab in melanoma, urothelial cancer and renal cell carcinoma. We are also working collaboratively with BMS to finalize the next set of registrational studies. This weekend at the SITC Annual Meeting, we are excited to present an 18-month follow-up for patients with metastatic melanoma enrolled in our PIVOT-02 study. This follows the recent announcement of our Breakthrough Therapy Designation for the doublet which was granted by FDA in August for patients with previously untreated metastatic melanoma. For NKTR-358, we now have three separate Phase 1b clinical trials ongoing in lupus, psoriasis and atopic dermatitis with our partner Eli Lilly, with plans to add an additional autoimmune indication to the development program in 2020. And importantly, we initiated our first clinical trial for NKTR-255, our novel IL-15 agonist, in patients with non-Hodgkin lymphoma and multiple myeloma."
Revenue in the third quarter of 2019 was $29.2 million as compared to $27.8 million in the third quarter of 2018. Year-to-date revenue for 2019 was $80.8 million as compared to $1.15 billion in the first nine months of 2018. Revenue was higher in the third quarter of 2019 as compared to the same period in 2018 primarily due to non-cash royalty revenue and an increase in product sales. Revenue was lower in the first nine months of 2019 as compared to the same period in 2018 primarily because of the recognition of $1.06 billion of license revenue from the Bristol-Myers Squibb collaboration agreement in the second quarter of 2018.
Total operating costs and expenses in the third quarter of 2019 were $128.0 million as compared to $126.4 million in the third quarter of 2018. Total operating costs and expenses in the first nine months of 2019 were $411.2 million as compared to $365.3 million in the same period of 2018. Total operating costs and expenses increased marginally in the third quarter of 2019 as compared to the third quarter of 2018 due to a decrease in research and development (R&D) expense, offset by an increase in general and administrative (G&A) expense. Total operating costs and expenses increased in the first nine months of 2019 as compared to the same period in 2018 due to increases in both R&D and G&A expense.
R&D expense in the third quarter of 2019 was $99.0 million as compared to $102.9 million for the third quarter of 2018. For the first nine months of 2019, R&D expense was $324.2 million as compared to $290.7 million in the first nine months of 2018. R&D expense was lower in the third quarter of 2019 as compared to the same period in 2018 due to decreased expense for the bempegaldesleukin program. R&D expense was higher in the first nine months as compared to the same period in 2018 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 Phase 1 clinical studies of NKTR-358 and IND-enabling activities for NKTR-255.
G&A expense was $24.0 million in the third quarter of 2019 as compared to $18.7 million in the third quarter of 2018. G&A expense in the first nine months of 2019 was $71.6 million as compared to $57.7 million in the first nine months of 2018. G&A expense was higher in the third quarter and first nine months of 2019 as compared to the same periods in 2018 due to costs related to commercialization readiness activities for NKTR-181 and bempegaldesleukin, and increased non-cash stock-based compensation.
Net loss in the third quarter of 2019 was $98.8 million or $0.56 basic and diluted loss per share as compared to net loss of $96.1 million or $0.56 basic and diluted loss per share in the third quarter of 2018. Net loss in the first nine months of 2019 was $327.2 million or $1.87 basic and diluted loss per share as compared to net income of $779.5 million or $4.34 diluted income per share in the first nine months of 2018.
Third Quarter 2019 and Recent Business Highlights
-- In September, Nektar presented clinical data from its PIVOT-02 study for
bempegaldesleukin in combination with Opdivo (nivolumab) at the 2019
CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference
demonstrating the promising clinical activity of the combination in
patients with advanced or metastatic triple-negative breast cancer,
particularly in patients with PD-L1 negative baseline tumors.
-- In October, Nektar announced that its partner Eli Lilly initiated two
Phase 1b studies of NKTR-358, a novel T regulatory (Treg) cell
stimulator, one in patients with psoriasis and one in patients with
atopic dermatitis. NKTR-358 is designed to treat autoimmune and
inflammatory conditions by correcting the immune system imbalance that
results from reduced numbers and impaired function of immune regulating
Treg cells.
-- In October, Nektar announced the initiation of a first-in-human, Phase 1
clinical study evaluating NKTR-255, an interleukin-15 (IL-15) receptor
agonist, as monotherapy for patients with relapsed or refractory
non-Hodgkin lymphoma or multiple myeloma (MM). The study will also
combine NKTR-255 with multiple targeted antibodies that function through
an antibody-dependent cell-mediated cytotoxicity mechanism to evaluate
the safety and efficacy in adults with relapsed or refractory MM.
The company also announced upcoming presentations at the following scientific congresses:
2019 Society for Immunotherapy and Cancer (SITC) Annual Meeting, National Harbor, MD:
-- Oral Presentation: "Clinical activity of BEMPEG plus NIVO in previously
untreated patients with metastatic melanoma: updated results from the
phase 1/2 PIVOT-02 study"
-- Presenter: Dr. Adi Diab, MD Anderson Cancer Center
-- Session: Concurrent Session 310: Combination Phase 1-2 Clinical
Trials
-- Date: Saturday, November 9, 2019, 5:15 p.m. - 5:30 p.m. Eastern
Standard Time
-- Poster: "NKTR-255, a polymer-conjugated IL-15 receptor agonist, enhances
efficacy of therapeutic monoclonal antibodies with ADCC activity in
solid tumor models", Kivimäe, S., et al.
-- Session Date and Time: Friday, November 8, 2019, 7:00 a.m. - 8:00
p.m. Eastern Standard Time
-- Poster: "Bempegaldesleukin in combination with local radiation and
systemic checkpoint blockade induces a robust systemic anti-tumor
immunity", Pieper, A., et al.
-- Session Date and Time: Friday, November 8, 2019, 7:00 a.m. - 8:00
p.m. Eastern Standard Time
-- Poster: "Characterization and comparison of NKTR-255, a
polymer-conjugated IL-15 versus IL-15 superagonist", Miyazaki, T., et
al.
-- Session Date and Time: Saturday, November 9, 2019, 7:00 a.m. - 8:00
p.m. Eastern Standard Time
-- Trials in Progress Poster: "A multicenter, open-label, exploratory
platform study to evaluate biomarkers and immunotherapy combinations for
the treatment of patients with metastatic castration-resistant prostate
cancer (PORTER)", Nissola, L., et al.
-- Session Date and Time: Friday, November 8, 2019, 7:00 a.m. - 8:00
p.m. Eastern Standard Time
ACR 2019 American College of Rheumatology Annual Meeting, Atlanta, GA:
-- Poster: "Selective induction of functional regulatory T-cells in healthy
volunteers by NKTR-358, a novel IL-2 conjugate Treg stimulator, in
development for the treatment of autoimmune diseases", Fanton, C., et
al.
-- Session: T Cell Biology & Targets in Autoimmune & Inflammatory
Disease Poster
-- Date: Sunday, November 10, 2019, 9:00 a.m. - 11:00 a.m. Eastern
Standard Time
The Promise of Interleukin-2 Therapy 2019, Paris, France:
-- Presentation: "NKTR-358: A polymer-conjugated IL-2 that drives the
selective expansion of endogenous Tregs for the treatment of autoimmune
diseases"
-- Presenter: Christine Fanton, Ph.D., Nektar Therapeutics
-- Session: Session V.a - Novel IL-2s
-- Date: Friday, November 15, 2019, 2:00 p.m. Central European Time
-- Presentation: "Bempegaldesleukin: A polymer-conjugated IL-2 prodrug for
multiple immune oncology applications"
-- Presenter: Loui Madakamutil, Ph.D., Nektar Therapeutics
-- Session: Session VI - IL-2 in cancer therapy
-- Date: Friday, November 15, 2019, 4:30 p.m. Central European Time
11(th) Annual PEGs Europe, Lisbon, Portugal:
-- Presentation: "TLR Agonist NKTR-262 Immunotherapy Combination with
Bempegaldesleukin (NKTR-214) Harnessing Innate and Adaptive Immune
System for the Treatment of Solid Tumors"
-- Presenter: Saul Kivimäe, Ph.D., Nektar Therapeutics
-- Session: Reprogramming the Microenvironment/The Innate Immune
System/Glyco-immune Checkpoints
-- Date: Tuesday, November 19, 2019, 5:30 p.m. Western European Time
-- Presentation: "NKTR-255: A Polymer-Conjugated IL-15 that Enhances CAR T
Efficacy in Murine Models"
-- Presenter: Loui Madakamutil, Ph.D., Nektar Therapeutics
-- Session: TILs and Gamma Delta Therapy
-- Date: Thursday, November 21, 2019, 11:15 a.m. Western European Time
Melanoma Bridge 2019, Naples, Italy:
-- Presentation: "Clinical activity of BEMPEG plus NIVO in previously
untreated patients with metastatic melanoma: updated results from the
phase 1/2 PIVOT-02 study"- [Encore Presentation]
-- Presenter: Igor Puzanov, M.D., Roswell Park Comprehensive Cancer
Center, Melanoma Bridge Co-chair
-- Session: Emergent Strategies Session
-- Date: Saturday, December 7, 2019, 12:00 p.m. - 12:15 p.m. Central
European Time
61(st) American Society of Hematology (ASH) Annual Meeting & Exposition, Orlando, FL:
-- Poster: "Combination of NKTR-255, a Polymer Conjugated Human IL-15, with
CD19 CAR T Cell Immunotherapy in a Preclinical Lymphoma Model", Chou,
C., et al.
-- Session: 625. Lymphoma: Pre-Clinical--Chemotherapy and Biologic
Agents: Poster II
-- Date: Sunday, December 8, 2019, 6:00 p.m. - 8:00 p.m. Eastern
Standard Time
-- Poster: "Restoring Innate and Adaptive Immune Repertoire in Multiple
Myeloma for Therapeutic Application", Fernandez, R., et al.
-- Session: 652. Myeloma: Pathophysiology and Pre-Clinical Studies,
Excluding Therapy: Poster III
-- Date: Monday, December 9, 2019, 6:00 p.m. - 8:00 p.m. Eastern
Standard Time
-- Trials in Progress Poster: "A Phase 1, Open-Label, Multi-Center, Dose
Escalation and Dose Expansion Study of NKTR-255 As a Single Agent in
Relapsed or Refractory Hematologic Malignancies and in Combination with
Daratumumab As a Salvage Regimen for Multiple Myeloma", Shah, N. et al.
-- Session: 704. Immunotherapies: Poster III
-- Date: Monday, December 9, 2019; 6:00 p.m. - 8:00 p.m. Eastern
Standard Time
Conference Call to Discuss First Quarter 2019 Financial Results
Nektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Standard Time/2:00 p.m. Pacific Standard Time, Wednesday, November 6, 2019.
This press release and a 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 Monday, December 9, 2019.
To access the conference call, follow these instructions:
Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)
Conference ID: 3079832 (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 Nektar's 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 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 uncertain or forward-looking statements which can be identified by words such as: "advance," "plan," "finalizing," "design," "evaluate," "promise," "potential," "continue," "may," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the finalization of a joint development plan to study bempegaldesleukin ("bempeg"), the potential therapeutic benefits of our investigational products (including bempeg, NKTR-358 and NKTR-255) and future plans to clinically study our investigational products in one or more particular indications, 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, delays caused by our collaboration partners, and enrollment competition; (ii) 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 bempeg, NKTR-358, and NKTR-255) is therefore highly uncertain and unpredictable and one or more of these programs may fail; (iii) 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 (iv) 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 August 9, 2019. 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.
Contact:
For Investors:
Jennifer Ruddock of Nektar Therapeutics
415-482-5585
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
September 30, 2019
December 31, 2018 (1)
Current assets:
Cash and cash
equivalents $81,224 $194,905
Short-term
investments 1,414,448 1,140,445
Accounts
receivable 41,205 43,213
Inventory 13,720 11,381
Advance payments
to contract
manufacturers 13,015 26,450
Other current
assets 15,212 21,293
Total current assets 1,578,824 1,437,687
Long-term investments 231,082 582,889
Property, plant and equipment, net 64,614 48,851
Operating lease right-of-use assets 134,888
Goodwill 76,501 76,501
Other assets 2,385 4,244
Total assets $2,088,294 $2,150,172
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $21,963 $5,854
Accrued
compensation 23,101 9,937
Accrued clinical
trial expenses 38,338 14,700
Accrued contract
manufacturing
expenses 8,646 23,841
Other accrued
expenses 11,394 9,580
Interest payable 4,198 4,198
Operating lease
liabilities,
current portion 9,318
Deferred revenue,
current portion 8,392 13,892
Total current liabilities 125,350 82,002
Senior secured notes, net 248,257 246,950
Operating lease liabilities, less current
portion 145,099
Liability related to the sale of future
royalties, net 73,455 82,911
Deferred revenue, less current portion 6,779 10,744
Other long-term liabilities 643 9,990
Total liabilities 599,583 432,597
Commitments and contingencies
Stockholders' equity:
Preferred stock
Common stock 17 17
Capital in excess
of par value 3,241,160 3,147,925
Accumulated other
comprehensive
loss (1,186) (6,316)
Accumulated
deficit (1,751,280) (1,424,051)
Total stockholders' equity 1,488,711 1,717,575
Total liabilities
and
stockholders'
equity $2,088,294 $2,150,172
(1) The consolidated balance
sheet at December 31, 2018 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 September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Revenue:
Product sales $5,558 $4,256 $14,302 $16,414
Royalty revenue 10,275 10,259 29,008 29,898
Non-cash royalty revenue
related to sale of future
royalties 10,264 8,372 27,585 24,337
License, collaboration and
other revenue 3,121 4,875 9,860 1,082,848
Total revenue 29,218 27,762 80,755 1,153,497
Operating costs and expenses:
Cost of goods sold 4,927 4,783 15,385 16,951
Research and development 99,048 102,895 324,197 290,653
General and administrative 23,983 18,718 71,570 57,666
Total operating costs and
expenses 127,958 126,396 411,152 365,270
Income (loss) from operations (98,740) (98,634) (330,397) 788,227
Non-operating income
(expense):
Interest expense (5,425) (5,442) (15,882) (16,167)
Non-cash interest expense on
liability related to sale of
future royalties (5,813) (4,814) (17,853) (14,808)
Interest income and other
income (expense), net 11,492 11,847 35,964 25,523
Total non-operating income
(expense), net 254 1,591 2,229 (5,452)
Income (loss) before provision
for income taxes (98,486) (97,043) (328,168) 782,775
Provision (benefit) for income
taxes 322 (900) (939) 3,250
Net income (loss) $(98,808) $(96,143) $(327,229) $779,525
Net income (loss) per share:
Basic $(0.56) $(0.56) $(1.87) $4.63
Diluted $(0.56) $(0.56) $(1.87) $4.34
Weighted average shares
outstanding used in computing
net income (loss) per share:
Basic 175,402 172,698 174,609 168,363
Diluted 175,402 172,698 174,609 179,619
NEKTAR THERAPEUTICS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2019 2018
Cash flows from operating activities:
Net income (loss) $(327,229) $779,525
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 (27,585) (24,337)
Non-cash interest expense on liability
related to sale of future royalties 17,853 14,808
Stock-based compensation 74,787 63,895
Depreciation and amortization 9,582 7,799
Accretion of discounts, net and other
non-cash transactions (10,421) (8,136)
Changes in operating assets and
liabilities:
Accounts receivable 2,008 (16,179)
Inventory (2,339) (2,570)
Other assets 18,127 (22,087)
Accounts payable 16,109 2,611
Accrued compensation 13,164 19,659
Other accrued expenses 10,019 26,603
Deferred revenue (9,465) (10,931)
Other liabilities 11,932 5,104
Net cash provided by (used in) operating
activities (203,458) 835,764
Cash flows from investing activities:
Purchases of investments (1,028,883) (1,944,178)
Maturities of investments 1,122,902 467,658
Sales of investments 11,963
Purchases of property, plant and
equipment (22,614) (5,552)
Sales of property, plant and equipment 2,633
Net cash provided by (used in) investing
activities 71,405 (1,467,476)
Cash flows from financing activities:
Issuance of common stock 790,231
Proceeds from shares issued under equity
compensation plans 18,449 59,067
Net cash provided by financing activities 18,449 849,298
Effect of exchange rates on cash and cash
equivalents (77) (87)
Net increase (decrease) in cash and cash
equivalents (113,681) 217,499
Cash and cash equivalents at beginning of
period 194,905 4,762
Cash and cash equivalents at end of
period $81,224 $222,261
Supplemental disclosure of cash flow
information:
Cash paid for interest $14,229 $14,701
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