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Nektar Therapeutics Reports First Quarter 2022 Financial Results

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Nektar Therapeutics (NKTR) reported Q1 2022 financial results, revealing a revenue of $24.8 million, up from $23.6 million in Q1 2021. Operating costs increased to $141.4 million from $133.0 million year-over-year, with R&D expenses rising to $107.3 million. The net loss narrowed to $90.4 million or $0.49 per share, compared to a net loss of $123.0 million or $0.68 per share in Q1 2021. Nektar's strategic plan focuses on key pipeline programs and extends its cash runway into 2025, with cash reserves standing at $704.4 million.

Positive
  • Revenue increased to $24.8 million, up from $23.6 million in Q1 2021.
  • Net loss improved to $90.4 million compared to $123.0 million in Q1 2021.
  • Cash reserves of $704.4 million support operations through 2025.
Negative
  • Operating costs rose to $141.4 million from $133.0 million year-over-year.
  • R&D expenses increased to $107.3 million, indicating higher spending without immediate returns.

SAN FRANCISCO, May 5, 2022 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the first quarter ended March 31, 2022.

Cash and investments in marketable securities at March 31, 2022 were approximately $704.4 million as compared to $798.8 million at December 31, 2021, which is expected to support operations into 2025.

"The new strategic plan that we recently announced refocuses our company around specific investment into our most important pipeline programs – NKTR-358, NKTR-255, and core preclinical candidates," said Howard W. Robin, President and CEO of Nektar. "In addition, we have now implemented a cost restructuring plan which extends our cash runway through the first half of 2025. We believe our pipeline in auto-immune disease and oncology provides a path to bringing important therapeutics to patients and creating value for our shareholders."

Summary of Financial Results

Revenue in the first quarter of 2022 was $24.8 million as compared to $23.6 million in the first quarter of 2021.

Total operating costs and expenses in the first quarter of 2022 were $141.4 million as compared to $133.0 million in the first quarter of 2021. Operating costs and expenses increased primarily as a result of an increase in R&D expense.

R&D expense in the first quarter of 2022 was $107.3 million as compared to $95.6 million for the first quarter of 2021. R&D expense increased primarily due to increases in expense for bempegaldesleukin, NKTR-255 and NKTR-358.

G&A expense was $27.3 million in the first quarter of 2022 and $31.7 million in the first quarter of 2021.

Net loss for the first quarter of 2022 was $90.4 million or $0.49 basic and diluted loss per share as compared to a net loss of $123.0 million or $0.68 basic and diluted loss per share in the first quarter of 2021.

On April 25, 2022, Nektar announced new strategic and cost restructuring plans (https://ir.nektar.com/news-releases/news-release-details/nektar-therapeutics-announces-strategic-reorganization-plan-and) and conducted a call with analysts and investors to present those plans. On that call, the company provided annual financial guidance for 2022, and because of that, the company stated it would not hold its regular quarterly conference call conducted in conjunction with release of Q1 2022 financial results.

About Nektar

Nektar Therapeutics is a biopharmaceutical company with a robust, wholly owned R&D pipeline of investigational medicines in oncology, immunology, and inflammatory diseases 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," "extend," "potential," "create," "provide"" 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 NKTR-358, NKTR-255 and our other drug candidates in research programs, the prospects and plans for our collaborations with other companies, the timing of the initiation of clinical studies and the data readouts for our drug candidates, and our expectations (including our expected charges and cost savings) following our corporate restructuring, reorganization and workforce reduction, and our expected working capital and our cash runway. 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 NKTR-358,NKTR-255 and our other drug candidates are based on preclinical and clinical findings and observations and are subject to change as research and development continue; (ii) NKTR-358,NKTR-255 and our other drug candidates 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) NKTR-358,NKTR-255 and our other drug candidates 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 challenges caused by the COVID-19 pandemic, 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) we may not achieve the expected costs savings we expect from the restructuring and reorganization, (vi) 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 (vii) certain other important risks and uncertainties set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2022. 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:

Vivian Wu of Nektar Therapeutics
628-895-0661

 

NEKTAR THERAPEUTICS


CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands)


(Unaudited)














ASSETS


March 31, 2022


December 31, 2021

(1)

Current assets:











Cash and cash equivalents






$                    67,993


$                     25,218



Short-term investments






599,032


708,737



Accounts receivable






30,220


22,492



Inventory






15,379


15,801



Other current assets






20,831


23,333




Total current assets






733,455


795,581














Long-term investments






37,363


64,828


Property, plant and equipment, net






60,980


60,510


Operating lease right-of-use assets






114,296


117,025


Goodwill






76,501


76,501


Other assets






1,521


2,744




Total assets






$               1,024,116


$                1,117,189














LIABILITIES AND STOCKHOLDERS' EQUITY


















Current liabilities:











Accounts payable






12,617


9,747



Accrued compensation






22,653


15,735



Accrued clinical trial expenses






33,403


26,809



Other accrued expenses






17,011


15,468



Operating lease liabilities, current portion





19,597


17,441




Total current liabilities






105,281


85,200














Operating lease liabilities, less current portion




122,638


125,736


Development derivative liability






-


27,726


Liabilities related to the sales of future royalties, net




185,604


195,427


Other long-term liabilities






2,704


3,592




Total liabilities






416,227


437,681














Commitments and contingencies






















Stockholders' equity:











Preferred stock






-


-



Common stock






19


19



Capital in excess of par value






3,537,790


3,516,641



Accumulated other comprehensive loss





(6,532)


(4,157)



Accumulated deficit






(2,923,388)


(2,832,995)




Total stockholders' equity






607,889


679,508



Total liabilities and stockholders' equity





$               1,024,116


$                1,117,189














(1) The consolidated balance sheet at December 31, 2021 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 March 31,










2022


2021














Revenue:











Product sales






$                      5,688


$                      4,795



Non-cash royalty revenue related to the sales of future royalties



17,561


18,798



License, collaboration and other revenue





1,573


54


Total revenue






24,822


23,647














Operating costs and expenses:











Cost of goods sold






5,315


5,756



Research and development






107,253


95,604



General and administrative






27,339


31,679



Restructuring, impairment and other costs of terminated program



1,475


-


Total operating costs and expenses





141,382


133,039















Loss from operations






(116,560)


(109,392)














Non-operating income (expense):











Change in fair value of development derivative liability




33,427


(1,599)



Non-cash interest expense on liabilities related to the sales of future royalties


(7,529)


(13,296)



Interest income and other income (expense), net




395


1,412


Total non-operating expense, net






26,293


(13,483)














Loss before provision for income taxes





(90,267)


(122,875)














Provision for income taxes






126


92


Net loss






$                   (90,393)


$                 (122,967)


























Basic and diluted net loss per share





$                       (0.49)


$                       (0.68)














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


185,848


181,370


























NEKTAR THERAPEUTICS


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In thousands)


(Unaudited)










Three months ended March 31,










2022


2021


Cash flows from operating activities:









Net loss






$                   (90,393)


$                 (122,967)


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








Non-cash royalty revenue related to the sales of future royalties



(17,561)


(18,798)



Non-cash interest expense on liabilities related to the sales of future royalties 


7,529


13,296



Change in fair value of development derivative liability




(33,427)


1,599



Non-cash research and development expense




4,951


2,248



Stock-based compensation 






20,961


23,898



Depreciation and amortization 






3,730


3,543



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


1,276


2,345


Changes in operating assets and liabilities:










Accounts receivable






(7,728)


9,733



Inventory






422


(1,516)



Operating leases, net






1,787


1,541



Other assets 






2,864


6,183



Accounts payable 






2,998


779



Accrued compensation 






6,918


8,981



Other accrued expenses 






7,249


(7,950)


Net cash used in operating activities 





(88,424)


(77,085)














Cash flows from investing activities:










Purchases of investments 






(93,493)


(295,314)



Maturities of investments 






227,974


303,612



Sales of investments






-


5,036



Purchases of property, plant and equipment 




(4,203)


(2,876)


Net cash provided by investing activities 





130,278


10,458














Cash flows from financing activities:










Proceeds from shares issued under equity compensation plans




188


17,106



Cash receipts from development derivative liability



750


750


Net cash provided by financing activities 




938


17,856














Effect of foreign exchange rates on cash and cash equivalents 



(17)


(20)


Net increase (decrease) in cash and cash equivalents 




42,775


(48,791)


Cash and cash equivalents at beginning of period




25,218


198,955


Cash and cash equivalents at end of period





$                    67,993


$                   150,164














Supplemental disclosure of cash flow information:








Operating lease right-of-use asset recognized in exchange for lease liabilities


$                             -


$                      1,057


 

 

 

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SOURCE Nektar Therapeutics

FAQ

What were Nektar's Q1 2022 financial results?

Nektar reported Q1 2022 revenue of $24.8 million with a net loss of $90.4 million.

How much cash does Nektar have as of March 31, 2022?

As of March 31, 2022, Nektar had approximately $704.4 million in cash and investments.

What is the outlook for Nektar after the recent strategic plan?

Nektar's strategic plan aims to extend its cash runway into 2025 while focusing on key pipeline programs.

What were the significant changes in Nektar's operating costs in Q1 2022?

Operating costs increased to $141.4 million, up from $133.0 million in Q1 2021, primarily due to higher R&D expenses.

How did Nektar's net loss in Q1 2022 compare to Q1 2021?

Nektar's net loss narrowed to $90.4 million in Q1 2022 from $123.0 million in Q1 2021.

Nektar Therapeutics

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