Nektar Therapeutics Reports Fourth Quarter and Year-End 2020 Financial Results

SAN FRANCISCO, Feb. 25, 2021 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported financial results for the fourth quarter and full year ended December 31, 2020.

(PRNewsfoto/Nektar Therapeutics)

Cash and investments in marketable securities at December 31, 2020 were approximately $1.2 billion as compared to $1.6 billion at December 31, 2019.

"This past year, Nektar made significant progress advancing our clinical pipeline of novel cytokine therapeutics," said Howard W. Robin, President and CEO of Nektar. "Our broad registrational program evaluating bempegaldesleukin (BEMPEG) plus nivolumab is progressing well with five registrational studies underway in melanoma, renal cell carcinoma and bladder cancer. We also recently added a sixth study to the registrational program to evaluate BEMPEG in combination with pembrolizumab in head and neck cancer and are pleased to be collaborating with Merck on the study. For our PROPEL study, we look forward to reporting the first data for BEMPEG plus pembrolizumab in patients with metastatic non-small cell lung cancer in the second half of 2021."

"For our second cytokine program, NKTR-255, we were very encouraged by the early signs of clinical activity that we recently reported at the SITC 2020 meeting, and are now advancing two Phase 1 clinical studies in combination with ADCC antibodies, one in hematological malignancies and one in solid tumors," continued Mr. Robin. "Finally, our partner Eli Lilly is conducting a broad Phase 2 program for NKTR-358, our T regulatory cell IL-2 agent, with Phase 2 studies in both lupus and ulcerative colitis and plans to initiate additional Phase 2 studies in immune-mediated diseases over the next 12-18 months."

Summary of Financial Results

Revenue in the fourth quarter of 2020 was $23.5 million as compared to $33.9 million in the fourth quarter of 2019. Revenue for the year ended December 31, 2020 was $152.9 million as compared to $114.6 million in 2019 and was higher primarily due to the recognition of $50.0 million in total milestones from Bristol-Myers Squibb related to the start of two new registrational trials of bempegaldesleukin plus Opdivo® (nivolumab) in adjuvant melanoma and muscle-invasive bladder cancer.

Total operating costs and expenses in the fourth quarter of 2020 were $134.2 million as compared to $143.5 million in the fourth quarter of 2019. Total operating costs and expenses for 2020 were $578.0 million as compared to $554.7 million in 2019. Total operating costs and expenses for full year 2020 increased as compared to 2019 primarily as a result of $45.2 million in impairment charges in the first quarter of 2020 resulting from the discontinuation of the NKTR-181 program, partially offset by a decrease in R&D expense.

R&D expense in the fourth quarter of 2020 was $102.7 million as compared to $110.4 million for the fourth quarter of 2019. R&D expense for the year ended December 31, 2020 was $408.7 million as compared to $434.6 million in 2019. Excluding pre-commercial manufacturing costs for NKTR-181 incurred during 2019, research and development expense increased for the full year 2020 primarily due to the clinical development of bempegaldesleukin in five registrational trials.

G&A expense was $27.1 million in the fourth quarter of 2020 and $27.1 million in the fourth quarter of 2019. G&A expense for 2020 was $104.7 million as compared to $98.7 million in 2019.

Net loss for the fourth quarter of 2020 was $117.2 million or $0.65 basic and diluted loss per share as compared to a net loss of $112.2 million or $0.64 basic and diluted loss per share in the fourth quarter of 2019. Net loss for the year ended December 31, 2020 was $444.4 million or $2.49 basic and diluted loss per share as compared to net loss of $440.7 million or $2.52 basic and diluted loss per share in 2019.

2020 and Year-to-Date 2021 Business Highlights:

  • In February 2021, Nektar announced a clinical trial collaboration and supply agreement with Merck for a Phase 2/3 study of bempegaldesleukin, Nektar's investigational IL-2 pathway agent, in combination with Merck's KEYTRUDA® (pembrolizumab) for first-line treatment of patients with metastatic or unresectable recurrent squamous cell carcinoma of the head and neck (SCCHN) whose tumors express PD-L1. The study is planned to start in the second half of 2021.
  • In February 2021, Nektar announced a financing and co-development collaboration with SFJ Pharmaceuticals® for the development of bempegaldesleukin plus pembrolizumab in SCCHN. SFJ has agreed to fund up to $150 million to support the planned Phase 2/3 study and manage clinical trial operations for the study. In return, Nektar agrees to pay SFJ success-based annual milestone payments over a period of seven to eight years which are contingent upon receipt of certain U.S. regulatory approvals for specified indications for bempegaldesleukin, and will begin following completion of the SCCHN study, which is projected to be completed in 2024.
  • In December 2020, Nektar sold its royalties on future sales of ADYNOVATE® and MOVANTIK® to Healthcare Royalty Management, LLC in exchange for $150 million.
  • In December 2020, Nektar announced dosing of the first patient in its Phase 1/2 study of its IL-15 agonist, NKTR-255, in combination with cetuximab in patients with relapsed or refractory head and neck squamous cell carcinoma or colorectal cancer. The study may enroll up to 80 patients at approximately 15 investigator sites in the United States and European Union.
  • In December 2020, Nektar presented preclinical data for NKTR-255 at the American Society of Hematology (ASH) 2020 Annual Meeting, underscoring the potential for NKTR-255 as an innovative immunotherapeutic agent in the treatment of multiple myeloma.
  • In November 2020, Nektar presented new data from its immuno-oncology pipeline at the virtual 2020 Society for Immunotherapy of Cancer (SITC) Annual Meeting. Updated clinical data from the PIVOT-02 study metastatic melanoma cohort showed that bempegaldesleukin with nivolumab resulted in a durable clinical benefit with median progression-free survival of 30.9 months. NKTR-255 showed biological activity in the first patients treated in the monotherapy dose-escalation phase of the ongoing Phase 1 study in multiple myeloma and non-Hodgkin's lymphoma. In addition, new data showed that the combination of TLR agonist candidate, NKTR-262, plus bempegaldesleukin alters the tumor micro-environment through activation of both the innate and adaptive arms of the immune system.
  • In November 2020, Nektar presented new data from its NKTR-358 program at the American College of Rheumatology (ACR) virtual meeting. Data from the Phase 1b study in patients with mild to moderate systemic lupus erythematosus (SLE) showed that NKTR-358 produced a dose-dependent increase in expression of regulatory T cell (Treg) activation markers, providing a rationale for continued development in SLE and other inflammatory indications.
  • In October 2020, Nektar initiated a Phase 1b clinical study of bempegaldesleukin in adult patients with mild COVID-19 infection. The randomized, double-blind, placebo-controlled trial is designed to assess the safety, tolerability, and pharmacokinetic and pharmacodynamic profile of bempegaldesleukin in adult patients with mild COVD-19.
  • In August 2020, Vaccibody AS and Nektar announced that the first patient had been dosed in the Phase 1/2a study evaluating bempegaldesleukin with VB10.NEO, Vaccibody's personalized neoantigen cancer vaccine, in patients with advanced squamous cell carcinoma of the head and neck.
  • In June 2020, Nektar announced the presentation of results from the Phase 1b study evaluating multiple ascending doses of NKTR-358 at the Annual European Congress of Rheumatology (EULAR 2020) virtual meeting. The data showed that treatment with NKTR-358 was safe and well tolerated in patients with mild-to-moderate SLE and led to a marked and selective, dose-dependent expansion of regulatory T cells (Tregs) that was maintained over multiple administrations.
  • In May 2020, Nektar announced the publication of clinical data from its PIVOT-02 study evaluating bempegaldesleukin in combination with nivolumab in immunotherapy-naïve patients with advanced solid tumors, including melanoma, renal cell carcinoma (RCC) and non-small cell lung cancer. The data, published in Cancer Discovery, a journal of the American Association for Cancer Research, showed that bempegaldesleukin plus nivolumab resulted in encouraging overall response rates across multiple tumor types, independent of baseline PD-L1 expression, with responses continuing to deepen over time.
  • In April 2020, Nektar repaid the principal and accrued interest of its senior notes totaling $254.8 million.
  • In February 2020, Nektar announced the publication of preclinical bempegaldesleukin data in two manuscripts in Nature Communications showing how bempegaldesleukin works synergistically with multiple immune-based therapies to enhance T-cell-mediated tumor control.
  • In January 2020, Nektar and Bristol-Myers Squibb announced a new joint development plan that expanded the ongoing registrational program for bempegaldesleukin plus Opdivo® from three ongoing registrational trials in first-line metastatic melanoma, first-line cisplatin-ineligible metastatic urothelial cancer and first-line metastatic RCC to include two additional registrational trials in adjuvant melanoma and muscle-invasive bladder cancer. In addition, the expanded development plan includes a Phase 1/2 study to evaluate bempegaldesleukin plus nivolumab in combination with a tyrosine-kinase inhibitor in first-line RCC in order to support a future registrational trial.
  • In January 2020, Nektar made the strategic business decision to withdraw its New Drug Application (NDA) for NKTR-181, an investigational opioid medicine in development for chronic pain and make no further investment into the program.

Conference Call to Discuss Fourth Quarter and Year-End 2020 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, Thursday, February 25, 2021.

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/. The web broadcast of the conference call will be available for replay through March 25, 2021.

To access the conference call, follow these instructions:

Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)
Conference ID: 3857247 (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 biopharmaceutical company with a robust, wholly owned R&D pipeline of investigational medicines in oncology, immunology, and virology 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: "may," "design," "potential," "advance," "plan" 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, bempegaldesleukin, NKTR-358 and NKTR-255, and the timing of the initiation of clinical studies and the availability of clinical data for our drug candidates. 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 bempegaldesleukin, NKTR-358 and NKTR-255 are based on preclinical and clinical findings and observations and are subject to change as research and development continue; (ii) bempegaldesleukin, NKTR-358 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 ongoing clinical studies (notwithstanding positive findings in earlier preclinical and clinical studies); (iii) bempegaldesleukin, NKTR-358 and NKTR-255 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 and competitive factors; (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 November 6, 2020. 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:
Dan Budwick of 1AB
973-271-6085
dan@1abmedia.com

 

NEKTAR THERAPEUTICS


CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands)


(Unaudited)














ASSETS


December 31, 2020


December 31, 2019

(1)

Current assets:










Cash and cash equivalents




$

198,955


$

96,363



Short-term investments




862,941


1,228,499



Accounts receivable




38,889


36,802



Inventory





15,292


12,665



Advance payments to contract manufacturers



3,908


31,834



Other current assets




18,020


15,387




Total current assets




1,138,005


1,421,550














Long-term investments




136,662


279,119


Property, plant and equipment, net



59,662


65,665


Operating lease right-of-use assets



126,476


134,177


Goodwill






76,501


76,501


Other assets





1,461


344




Total assets





$

1,538,767


$

1,977,356














LIABILITIES AND STOCKHOLDERS' EQUITY


















Current liabilities:










Senior secured notes, net and interest payable



$

-


$

252,891



Accounts payable




22,139


19,234



Accrued compensation




14,532


11,467



Accrued clinical trial expenses



44,207


32,626



Accrued contract manufacturing expenses



11,310


7,304



Other accrued expenses




9,585


12,338



Operating lease liability, current portion



13,915


12,516



Deferred revenue, current portion



91


5,517




Total current liabilities




115,779


353,893














Operating lease liability, less current portion



136,373


142,730


Liabilities related to the sales of future royalties, net


200,340


72,020


Deferred revenue, less current portion



2,464


2,554


Other long-term liabilities




6,516


768




Total liabilities




461,472


571,965














Commitments and contingencies



















Stockholders' equity:









Preferred stock





-


-



Common stock





18


17



Capital in excess of par value



3,388,730


3,271,097



Accumulated other comprehensive loss



(2,295)


(1,005)



Accumulated deficit




(2,309,158)


(1,864,718)




Total stockholders' equity



1,077,295


1,405,391



Total liabilities and stockholders' equity



$

1,538,767


$

1,977,356














(1) The consolidated balance sheet at December 31, 2019 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,










2020


2019


2020


2019


















Revenue:














     Product sales





$

2,884


$

5,815


$

17,504


$

20,117


     Royalty revenue 





(412)


12,214


30,999


41,222


     Non-cash royalty revenue related to sale of future royalties


20,562


8,718


48,563


36,303


     License, collaboration and other revenue



428


7,115


55,849


16,975


Total revenue





23,462


33,862


152,915


114,617


















Operating costs and expenses:












     Cost of goods sold





4,323


5,989


19,477


21,374


     Research and development




102,724


110,369


408,678


434,566


     General and administrative




27,136


27,142


104,682


98,712


     Impairment of assets and other costs for terminated program


-


-


45,189


-


Total operating costs and expenses



134,183


143,500


578,026


554,652


















Loss from operations




(110,721)


(109,638)


(425,111)


(440,035)


















Non-operating income (expense):











     Interest expense





-


(5,428)


(6,851)


(21,310)


     Non-cash interest expense on liability related to sale of future royalties


(8,183)


(7,191)


(30,267)


(25,044)


     Interest income and other income (expense), net



1,829


10,371


18,282


46,335


Total non-operating expense, net



(6,354)


(2,248)


(18,836)


(19)


















Loss before provision for income taxes



(117,075)


(111,886)


(443,947)


(440,054)


















Provision for income taxes




128


278


493


613


     Net loss






$

(117,203)


$

(112,164)


$

(444,440)


$

(440,667)


















Net loss per share:













     Basic






$

(0.65)


$

(0.64)


$

(2.49)


$

(2.52)


     Diluted






$

(0.65)


$

(0.64)


$

(2.49)


$

(2.52)


















Weighted average shares outstanding used in computing net loss per share:










     Basic






179,684


176,130


178,581


174,993


     Diluted






179,684


176,130


178,581


174,993


















 

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)











Year Ended December 31,











2020


2019

Cash flows from operating activities:








Net loss








$

(444,440)


$

(440,667)

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





Non-cash royalty revenue related to sale of future royalties




(48,563)


(36,303)

Non-cash interest expense on liability related to sale of future royalties 


30,267


25,044

Stock-based compensation 





94,261


99,795

Depreciation and amortization 





14,182


13,156

Impairment of advance payments to contract manufacturers and equipment for terminated program

20,351


-

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


3,943


(11,394)

Changes in operating assets and liabilities:








Accounts receivable






1,913


6,411

Inventory







(2,627)


(1,284)

Operating leases, net






2,743


13,090

Other assets 







4,476


1,190

Accounts payable 






2,382


12,967

Accrued compensation 






4,697


1,530

Other accrued expenses 






8,644


4,349

Deferred revenue 






(5,516)


(16,565)

Net cash used in operating activities 





(313,287)


(328,681)














Cash flows from investing activities:








Purchases of investments 





(987,533)


(1,380,865)

Maturities of investments 






1,449,304


1,614,036

Sales of investments 






41,700


-

Purchases of property, plant and equipment 





(7,258)


(26,285)

Net cash provided by investing activities 





496,213


206,886














Cash flows from financing activities:








Proceeds from sale of future royalties, net of $3.8 million of transaction costs


146,250


-

Repayment of senior notes





(250,000)


-

Proceeds from shares issued under equity compensation plans




23,396


23,355

Net cash provided by (used in) financing activities 




(80,354)


23,355

Effect of exchange rates on cash and cash equivalents 




20


(102)

Net increase (decrease) in cash and cash equivalents 




102,592


(98,542)

Cash and cash equivalents at beginning of year





96,363


194,905

Cash and cash equivalents at end of year





$

198,955


$

96,363














Supplemental disclosure of cash flow information:







Cash paid for interest






$

9,742


$

19,199

Cash paid for income taxes






$

539


$

555

Right-of-use assets recognized in exchange for operating lease liabilities


$

2,133


$

57,691

 

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SOURCE Nektar Therapeutics

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