Nektar Therapeutics Reports Third Quarter 2024 Financial Results

SAN FRANCISCO, Nov. 7, 2024 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the third quarter ended September 30, 2024.

Cash and investments in marketable securities on September 30, 2024 were $249.0 million as compared to $329.4 million at December 31, 2023. Nektar's cash and marketable securities are expected to support strategic development activities and operations into the fourth quarter of 2026.

"We made excellent progress this quarter advancing our I&I pipeline, including the ongoing Phase 2b studies of rezpegaldesleukin in atopic dermatitis and alopecia areata," said Howard W. Robin, President and CEO of Nektar. "We see rapid enrollment in the 400-patient atopic dermatitis study for rezpegaldesleukin, and we remain on track for topline data in the first half of 2025. Our Phase 2 study in alopecia areata is also enrolling nicely with topline data expected in the second half of 2025."

"Beyond rezpegaldesleukin, we are focused on advancing our earlier stage TNFR2 antibody and bispecific programs, NKTR-0165 and NKTR-0166, with at least one of these slated to enter the clinic next year," continued Robin. "Next week, we are looking forward to presenting highly promising data at the 2024 ACR Convergence Meeting for our preclinical PEG-CSF program, NKTR-422. Finally, we recently published important data for our IL-15 agonist, NKTR-255, highlighting its potential as a validated mechanism in oncology."

Summary of Financial Results

Revenue in the third quarter of 2024 was $24.1 million compared to the same $24.1 million in the third quarter of 2023. Revenue for the first nine months of 2024 was $69.3 million compared to $66.2 million in the first nine months of 2023.

Total operating costs and expenses in the third quarter of 2024 were $58.5 million compared to $69.0 million in the third quarter of 2023. Total operating costs and expenses in the first nine months of 2024 were $188.8 million compared to $296.4 million in the first nine months of 2023. Operating costs and expenses for the first nine months of 2024 decreased primarily due to decreases in restructuring, impairment and costs of terminated programs and a one-time $76.5 million non-cash goodwill impairment recognized in the first quarter of 2023.

R&D expense in the third quarter of 2024 was $35.0 million compared to $24.1 million for the third quarter of 2023. For the first nine months of 2024, R&D expense was $92.2 million compared to $84.2 million in the first nine months of 2023. R&D expense increased for both the third quarter and the first nine months of 2024 primarily due to increases in development expenses for rezpegaldesleukin and NKTR-0165, partially offset by decreases in employee and related facilities costs, as well as development expenses for NKTR-255.

G&A expense was $19.0 million in the third quarter of 2024 compared to $21.1 million in the third quarter of 2023. G&A expense was $59.6 million for the first nine months of 2024 compared to $60.1 million in the first nine months of 2023. G&A expense decreased for both the third quarter and the first nine months of 2024 primarily due to decreases in employee costs, partially offset by the reduction of facilities costs allocated to research and development expenses.

Non-cash restructuring and impairment charges were less than $0.1 million in the third quarter of 2024 and $14.3 million in the first nine months of 2024. These non-cash charges are related to the declining San Francisco commercial real estate market and real estate lease obligations held by Nektar.

Net loss for the third quarter of 2024 was $37.1 million or $0.18 basic and diluted loss per share compared to a net loss of $45.8 million or $0.24 basic and diluted loss per share in the third quarter of 2023. Net loss in the first nine months of 2024 was?$126.2 million?or?$0.62?basic and diluted loss per share compared to a net loss of?$234.0 million?or?$1.23?basic and diluted loss per share in the first nine months of 2023.?Excluding the?$14.3 million?in non-cash restructuring and real estate impairment charges, net loss, on a non-GAAP basis, for the first nine months of 2024 was $111.9 million, or $0.55?basic and diluted loss per share.

Third Quarter 2024 and Recent Business Highlights

    --  In September 2024, Nektar presented several posters for
        rezpegaldesleukin (REZPEG) at the 2024 European Academy of Dermatology
        and Venereology (EADV) Congress. In addition to two trial-in-progress
        posters, new proteomic analyses were also presented, which showed that
        rezpegaldesleukin increased the protein levels of immune-regulating
        pathways and reduced specific serum proteins known to be elevated in
        patients with atopic dermatitis.
    --  In October 2024, Nektar and collaborators announced the publication of
        data from a Phase 1 trial evaluating NKTR-255 in combination with
        CD19/22 CAR-T cell therapy in patients with relapsed or refractory
        B-cell acute lymphoblastic leukemia (B-ALL) in Blood, an open-access
        journal of the American Society of Hematology. The data show that eight
        out of nine patients (89%) achieved complete remission, all without
        detectable measurable residual disease (MRD).
    --  In October 2024, Nature Communications published results from Phase 1b
        studies of rezpegaldesleukin in two inflammatory skin diseases,
        demonstrating durable dose-dependent improvements in physician-assessed
        disease activity and patient-reported outcomes for both studies.
        Rezpegaldesleukin was evaluated in patients with moderate-to-severe
        atopic dermatitis (AD) (NCT04081350) or chronic plaque psoriasis (PsO)
        (NCT04119557). AD patients receiving high dose rezpegaldesleukin
        demonstrate an 83% improvement in EASI score after 12 weeks of
        treatment. EASI improvement of >= 75% (EASI-75) and vIGA-AD responses
        were maintained for 36 weeks after treatment discontinuation in 71% and
        80% of week 12 responders, respectively. Results validate the role of
        IL-2-induced Treg proliferation and activation in the AD treatment
        paradigm, and support the advancement of rezpegaldesleukin in the Phase
        2b study in AD.
    --  In November, Nektar announced a definitive agreement with Ampersand
        Capital Partners to sell its commercial PEGylation manufacturing
        business in Huntsville, Alabama for $90 million in enterprise value,
        which is comprised of $70 million in cash and $20 million in equity
        ownership in the new portfolio company. The Huntsville-based facility
        will be spun out as a standalone Ampersand portfolio company and
        Ampersand has committed to invest additional growth equity capital into
        the new company. All of Nektar's employees at the Huntsville facility
        will be offered employment at the new portfolio company, ensuring
        continuity in the high-quality manufacturing and PEGylation expertise
        that longstanding customers trust and rely on. Nektar and the new
        Ampersand portfolio company will also enter into manufacturing supply
        agreements to meet Nektar's PEG reagent needs for rezpegaldesleukin and
        certain pipeline programs. The transaction will be subject to customary
        closing conditions and costs and is expected to close by December 2,
        2024. Following the closing, Nektar will retain all rights to current
        and future royalty streams and milestones related to existing PEGylated
        product license agreements. Nektar will also be entitled to appoint a
        representative to the board of the new Ampersand portfolio company.
    --  Enrollment remains on track for the two Phase 2b studies of REZPEG, one
        in patients with moderate-to-severe atopic dermatitis and one in
        patients with severe to very severe alopecia areata. Nektar expects
        topline data from these studies in the first half and in the second half
        of 2025, respectively.

Nektar also announced presentations at the following medical meetings:

2024 Society for Immunotherapy of Cancer (SITC) Annual Meeting

Late-breaking Abstract (LBA) 1489: " REStoring lymphoCytes Using NKTR-255 after chemoradiothErapy in solid tumors (RESCUE): Preplanned Interim Safety and Efficacy Analysis", Lin, S.
Presentation Type: Poster
ePoster will be on display on the SITC 2024 virtual meeting platform on Thursday, November 7, 2024, at 9:00 a.m. CST

2024 American College of Rheumatology (ACR) Convergence

Abstract 1866120: "A Novel Therapeutically Active CSF-1R Agonist Promotes Tissue Macrophages Inflammation Resolution and Induces Tissue Repair Pathways", Kivimae, S.
Presentation Type: Oral
Session: Abstracts: Cytokines & Cell Trafficking
Presentation Time: Monday, November 18 at 3:15 PM - 3:30 PM

2024 American Society of Hematology (ASH) Annual Meeting

Abstract 203576: "NKTR-255 Vs Placebo to Enhance Complete Responses and Durability Following CD19-Directed CAR-T Therapy in Patients with Relapsed/Refractory (R/R) Large B-cell Lymphoma (LBCL)", Ahmed, S.
Presentation Type: Poster
Session: Cellular Immunotherapies: Early Phase Clinical Trials and Toxicities
Presentation Time: Saturday, December 7 at 5:30 PM - 7:30 PM

Conference Call to Discuss Third Quarter 2024 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 on November 7, 2024.

This press release and 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: http://ir.nektar.com/. The web broadcast of the conference call will be available for replay through December 8, 2024.

To access the conference call, please pre-register at Nektar Earnings Call Registration. All registrants will receive dial-in information and a PIN allowing them to access the live call.

About Nektar Therapeutics

Nektar Therapeutics is a clinical-stage biotechnology company focused on developing treatments that address the underlying immunological dysfunction in autoimmune and chronic inflammatory diseases. Nektar's lead product candidate, rezpegaldesleukin (REZPEG, or NKTR-358), is a novel, first-in-class regulatory T cell stimulator being evaluated in two Phase 2b clinical trials, one in atopic dermatitis and one in alopecia areata. Our pipeline also includes a preclinical candidate NKTR-0165, which is a bivalent tumor necrosis factor receptor type II agonist antibody. Nektar, together with various partners, is also evaluating NKTR-255, an investigational IL-15 receptor agonist designed to boost the immune system's natural ability to fight cancer, in several ongoing clinical trials. Nektar is headquartered in San Francisco, California. For further information, visit www.nektar.com and follow us on LinkedIn.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements which can be identified by words such as: "will," "expect," "develop," "potential," "advance," "anticipate," and similar references to future periods. Examples of forward-looking statements include, among others, statements regarding the therapeutic potential of, and future development plans for, rezpegaldesleukin, NKTR-0165, NKTR-0166, NKTR-422, and NKTR-255, and whether all the closing conditions of the announced definitive agreement will be met. 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 rezpegaldesleukin, NKTR-0165, NKTR-0166, NKTR-422 and NKTR-255 are based on preclinical and clinical findings and observations and are subject to change as research and development continue; (ii) rezpegaldesleukin, NKTR-0165, NKTR-0166, NKTR-422 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 future clinical studies (notwithstanding positive findings in earlier preclinical and clinical studies); (iii) rezpegaldesleukin, NKTR-0165, NKTR-0166, NKTR-422 and NKTR-255 are in 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 August 9, 2024. 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:
Madelin Hawtin
LifeSci Communications
603-714-2638
mhawtin@lifescicomms.com


                                                                                       
            
              NEKTAR THERAPEUTICS


                                                                              
            
              CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                               
            (In thousands)


                                                                                                
            (Unaudited)




                   
            
              ASSETS                                      
            September 30, 2024                                December 31, 2023
                                                                                                                                                      (1)



       Current assets:


                                                                     
            Cash and cash equivalents                                                                              $30,109                $35,277


                                                                     
            Short-term investments                                                                                 214,386                268,339


                                                                     
            Accounts receivable                                                                                                            1,205


                                                                     
            Inventory, net                                                                                                                16,101


                                                                     
            Other current assets                                                                                     8,933                  9,779


                                                                     
            Assets held for sales                                                                                   33,053


                                                                     
            Total current assets                                                                                   286,481                330,701





       Long-term investments                                                                                                                                    4,537                 25,825



       Property, plant and equipment, net                                                                                                                       3,603                 18,856



       Operating lease right-of-use assets                                                                                                                      8,826                 18,007



       Other assets                                                                                                                                             4,519                  4,644


                                                                     
            Total assets                                                                                          $307,966               $398,033




      
          
              LIABILITIES AND STOCKHOLDERS' EQUITY





       Current liabilities:


                                                                     
            Accounts payable                                                                                         8,577                  9,848


                                                                     
            Accrued expenses                                                                                        32,377                 22,162


                                                                     
            Operating lease liabilities, current portion                                                21,504                19,259


                                                                     
            Liabilities related to assets held for sale                                                  5,125


                                                                     
            Total current liabilities                                                                               67,583                 51,269





       Operating lease liabilities, less current portion                                                                                                86,758  98,517



       Liabilities related to the sales of future royalties, net                                                                                        97,829 112,625



       Other long-term liabilities                                                                                                                              6,912                  4,635


                                                                     
            Total liabilities                                                                                      259,082                267,046





       Commitments and contingencies





       Stockholders' equity:


                                                                     
            Preferred stock


                                                                     
            Common stock                                                                                                19                     19


                                                                     
            Capital in excess of par value                                                                       3,654,981              3,608,137


                                                                     
            Treasury stock                                                                                         (3,000)


                                                                     
            Accumulated other comprehensive income (loss)                                        355                     80


                                                                     
            Accumulated deficit                                                                                (3,603,471)           (3,477,249)


                                                                     
            Total stockholders' equity                                                                              48,884                130,987


                                                                     
            Total liabilities and stockholders' equity                                                $307,966              $398,033





       (1) The consolidated balance sheet at December 31, 2023 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,


                                                                                                                                                                                                              2024                              2023                      2024                        2023





         Revenue:


                                                                                               
     Product sales                                                                                              $8,015                            $5,822                   $20,689                     $15,198


                                                                                                 Non-cash royalty revenue related to the sales of future
                                                                                                  royalties                                                                  15,731               18,167                  48,029                          50,860


                                                                                               
     License, collaboration and other revenue                                                           378                     155                             534                   179



         Total revenue                                                                                                                                                                24,124                24,144                            69,252                    66,237





         Operating costs and expenses:


                                                                                               
     Cost of goods sold                                                                                          4,435                            12,431                    22,709                      26,485


                                                                                               
     Research and development                                                                                   35,031                            24,070                    92,163                      84,220


                                                                                               
     General and administrative                                                                                 18,957                            21,147                    59,616                      60,097


                                                                                                 Restructuring, impairment and costs of terminated program                       46               11,360                  14,310                          49,107


                                                                                               
     Impairment of goodwill                                                                                                                                                                          76,501



         Total operating costs and expenses                                                                                                                                 58,469               69,008                 188,798                         296,410




                                                                                               
     Loss from operations                                                                                     (34,345)                         (44,864)                (119,546)                  (230,173)





         Non-operating income (expense):


                                                                                                 Non-cash interest expense on liabilities related to the sales of
                                                                                                  future royalties                                                (6,020)              (5,910)             (17,959)                         (18,467)


                                                                                               
     Interest income                                                                                             3,437                             5,211                    11,558                      14,392


                                                                                               
     Other income (expense), net                                                                                 (120)                            (335)                    (255)                        100



         Total non-operating income (expense), net                                                                                                                         (2,703)             (1,034)                (6,656)                        (3,975)





         Loss before provision for income taxes                                                                                                                           (37,048)             (45,898)               (126,202)                       (234,148)





         Provision (benefit) for income taxes                                                                                                                                              9                  (61)                               20                     (171)



         Net loss                                                                                                                                                                  $(37,057)            $(45,837)                       $(126,222)               $(233,977)





         Basic and diluted net loss per share                                                                                                                              $(0.18)             $(0.24)                $(0.62)                        $(1.23)





         Weighted average shares outstanding used in computing basic and diluted net loss per                                                            209,249  190,406              204,292               189,651
    share

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SOURCE Nektar Therapeutics