SAN FRANCISCO, Aug. 5, 2015 /PRNewswire/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the second quarter ended June 30, 2015.

Cash and investments in marketable securities at June 30, 2015 were $279.7 million as compared to $325.8 million at March 31, 2015.

"We are pleased that the MOVANTIK launch in the U.S. is off to an encouraging start with very rapid uptake," said Howard W. Robin, President and Chief Executive Officer of Nektar. "AstraZeneca plans to launch MOVANTIK in both Europe and Canada in the second half of this year. The SUMMIT-07 efficacy study of NKTR-181 in patients with chronic low back pain is well underway and proceeding ahead of schedule. We recently signed an important clinical collaboration with MD Anderson Cancer Center for our immuno-oncology therapy, NKTR-214, which is scheduled to enter a Phase 1 / 2 clinical study before year-end. Finally, Baxalta's ADYNOVATE, or BAX 855, continues on track to be approved and launched in the U.S. by the end of 2015."

Year-to-date revenue for 2015 was $131.5 million as compared to $48.3 million in the first half of 2014. The increase in revenue in the first half of 2015 as compared to the same period in 2014 is due to the recognition of $90.0 million of the $100.0 million milestone payment from AstraZeneca following the first commercial sale of MOVANTIK in the U.S. Revenue in the second quarter of 2015 was $22.7 million as compared to $28.5 million in the second quarter of 2014. Revenue included non-cash royalty revenue, related to our 2012 royalty monetization, of $4.7 million and $8.7 million in the second quarter and first half of 2015, respectively, and $4.8 million and $10.6 million in the second quarter and first half of 2014, respectively. This non-cash royalty revenue is offset by non-cash interest expense.

Total operating costs and expenses in the first half of 2015 were $131.9 million as compared to $107.6 million in the first half of 2014. Total operating costs and expenses in the second quarter of 2015 were $66.1 million as compared to $51.4 million in the second quarter of 2014. Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.

Research and development expense in the second quarter of 2015 was $45.4 million as compared to $36.7 million in the second quarter of 2014. For the first half of 2015, R&D expense was $92.4 million as compared to $75.0 million in the first half of 2014. R&D expense was higher in the second quarter and first half of 2015 as compared to the same periods in 2014 primarily due to the initiation of the Phase 3 efficacy study of NKTR-181 in patients with chronic low back pain. Additionally, R&D expense in the first half of 2015 included costs related to the commercial scale-up of production of devices for Amikacin Inhale, the ongoing Phase 3 study of NKTR-102 in breast cancer, the ongoing Phase 1 study of NKTR-171, and IND enabling activities for NKTR-214, which will enter the clinic in 2015.

General and administrative expense was $10.2 million in the second quarter of 2015 as compared to $9.6 million in the second quarter of 2014. G&A expense in the first half of 2015 was $20.5 million as compared to $19.5 million in the first half of 2014.

Net loss in the second quarter of 2015 was $52.7 million or $0.40 loss per share as compared to $32.6 million or $0.26 loss per share in the second quarter of 2014. Net loss in the first half of 2015 was $18.8 million or $0.14 loss per share as compared to $78.8 million or $0.63 loss per share in the first half of 2014.

The company also announced the following upcoming presentations and events:

IASLC 16th World Congress on Lung Cancer, Denver, CO:


    --  Abstract/Poster Title: "Etirinotecan Pegol (NKTR-102) in the Treatment
        of Patients with Metastatic Non Small Cell Lung Cancer (NSCLC) after
        Failure of 2nd Line Treatment: A Phase II study", Aggarwal C., et al.
        --  Date: September 9, 2015, 9:30 a.m. - 4:30 p.m. Mountain Time

CRI-CIMT-EATI-AACR Inaugural International Cancer Immunotherapy Conference, Translating Science into Survival 2015, New York, NY:


    --  Abstract/Poster Title: "Antitumor activity of the CD122-biased
        immunostimulatory cytokine combined with immune checkpoint blockade
        requires innate and adaptive immunity", Langowski, J., et al.
        --  Date: September 18, 2015, 4:30-6:30 p.m. Eastern Time

Nektar Investor and Analyst R&D Day, St. Regis Hotel, New York, NY:


    --  Date: October 8, 2015, 12:00-3:30 p.m. Eastern Time

Conference Call to Discuss Second Quarter 2015 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, Wednesday, August 5, 2015.

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 Investor Relations section of the Nektar website: http://www.nektar.com. The web broadcast of the conference call will be available for replay through Monday, September 7, 2015.

To access the conference call, follow these instructions:

Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 97434654 (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 Investor Relations page at the Nektar website as soon as practical after the conclusion of the conference call.

About Nektar

Nektar Therapeutics has a robust R&D pipeline in pain, oncology, hemophilia and other therapeutic areas. In the area of pain, Nektar has an exclusive worldwide license agreement with AstraZeneca for MOVANTIK(TM) (naloxegol), the first FDA-approved once-daily oral peripherally-acting mu-opioid receptor antagonist (PAMORA) medication for the treatment of opioid-induced constipation (OIC), in adult patients with chronic, non-cancer pain. The product is also approved in the European Union as MOVENTIG® (naloxegol) and is indicated for adult patients with OIC who have had an inadequate response to laxatives. The AstraZeneca agreement also includes NKTR-119, an earlier stage development program that is a co-formulation of MOVANTIK and an opioid. NKTR-181, a wholly-owned mu-opioid analgesic molecule for chronic pain conditions, is in Phase 3 development. NKTR-171, a wholly-owned new sodium channel blocker being developed as an oral therapy for the treatment of peripheral neuropathic pain, is in Phase 1 clinical development. In hemophilia, BAX 855, a longer-acting PEGylated Factor VIII therapeutic is in Phase 3 development conducted by partner Baxter. A BLA for BAX 855 was filed by Baxter to the US FDA in December, 2014 and is currently under review. In anti-infectives, Amikacin Inhale is in Phase 3 studies conducted by Bayer Healthcare as an adjunctive treatment for intubated and mechanically ventilated patients with Gram-negative pneumonia.

Nektar's technology has enabled nine approved products in the U.S. or Europe through partnerships with leading biopharmaceutical companies, including AstraZeneca's MOVANTIK(TM), UCB's Cimzia® for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS® for hepatitis C and Amgen's Neulasta® for neutropenia.

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.

MOVANTIK(TM) is a trademark and MOVENTIG® is a registered trademark of the AstraZeneca group of companies.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "expect," "believe," "should," "may," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the potential of MOVANTIK, AstraZeneca's planned commercial launch of MOVANTIK in Europe and Canada, the enrollment status of the SUMMIT-07 efficacy study of NKTR-181, the projected start date of the clinical program for NKTR-214, Baxalta's regulatory and commercial launch plans for ADYNOVATE, and the value and potential of our polymer conjugate technology and research and development pipeline. 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) the commercial potential of a new drug at the early stages of commercial launch, such as MOVANTIK, is difficult to predict and will have a significant impact on our future results of operation and financial condition; (ii) the timing of the commencement or end of clinical trials and the commercial launch of our drug candidates and those of our partners 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; (iii) scientific discovery of new medical breakthroughs is an inherently uncertain process and the future success of the application of our technology platform to potential new drug candidates is therefore highly uncertain and unpredictable and one or more research and development programs could fail; (iv) patents may not issue from our patent applications for our drugs (including MOVANTIK and ADYNOVATE) and drug candidates, patents that have issued may not be enforceable, or additional intellectual property licenses from third parties may be required; and (v) the outcome of any existing or future intellectual property or other litigation related to our drugs and drug candidates and those of our collaboration partners including MOVANTIK and ADYNOVATE. Other important risks and uncertainties set forth in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 1, 2015. 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:
Investors
Jennifer Ruddock of Nektar Therapeutics
415-482-5585

Media
Nadia Hasan of WCG
212-257-6738
nektar@wcgworld.com


                                                                           NEKTAR THERAPEUTICS

                                                                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                             (In thousands)

                                                                               (Unaudited)


                           ASSETS                                     June 30, 2015                        December 31, 2014              (1)
                                                                   -------------                        -----------------

    Current assets:

                        Cash and cash
                        equivalents                                                   $20,875                                     $12,365

                       Restricted cash                                                 25,000                                      25,000

                        Short-term
                        investments                                                   233,785                                     225,459

                        Accounts
                        receivable, net                                                 3,680                                       3,607

                       Inventory                                                       10,124                                      12,952

                        Other current
                        assets                                                          8,782                                       8,817
                       --------------

                       Total current assets                                           302,246                                     288,200


    Property, plant and equipment, net                                               72,158                                      70,368

    Goodwill                                                                         76,501                                      76,501

    Other assets                                                                      5,762                                       6,552
                                                                                      -----                                       -----

                       Total assets                                                  $456,667                                    $441,621
                       ============


                             LIABILITIES AND STOCKHOLDERS' EQUITY


    Current liabilities:

                       Accounts payable                                                $2,833                                      $2,703

                        Accrued
                        compensation                                                   10,824                                       5,749

                        Accrued clinical
                        trial expenses                                                  8,946                                       7,708

                        Other accrued
                        expenses                                                        9,713                                       6,418

                       Interest payable                                                 6,917                                       6,917

                        Capital lease
                        obligations,
                        current portion                                                 5,643                                       4,512

                        Deferred
                        revenue,
                        current portion                                                22,987                                      24,473

                        Other current
                        liabilities                                                    13,214                                       5,567
                       --------------

                       Total current liabilities                                       81,077                                      64,047


    Senior secured notes                                                            125,000                                     125,000

    Capital lease obligations, less
     current portion                                                                  2,889                                       4,139

    Liability related to sale of
     future royalties                                                               121,971                                     120,471

    Deferred revenue, less current
     portion                                                                         73,963                                      76,911

    Other long-term liabilities                                                      16,668                                      14,721
                                                                                     ------                                      ------

                       Total liabilities                                              421,568                                     405,289


    Commitments and contingencies


    Stockholders' equity:

                       Preferred stock                                                      -                                          -

                       Common stock                                                        13                                          13

                        Capital in
                        excess of par
                        value                                                       1,841,730                                   1,824,195

                        Accumulated
                        other
                        comprehensive
                        loss                                                          (1,498)                                    (1,567)

                        Accumulated
                        deficit                                                   (1,805,146)                                (1,786,309)
                       ------------

                       Total stockholders' equity                                      35,099                                      36,332

                        Total
                        liabilities and
                        stockholders'
                        equity                                                       $456,667                                    $441,621
                       ================



    (1) The consolidated balance
     sheet at December 31, 2014 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                        Six Months Ended

                                              June 30,                              June 30,
                                              --------                              --------

                                                2015                        2014                        2015         2014
                                                ----                        ----                        ----         ----



    Revenue:

      Product sales and
       royalty revenue                       $11,713                      $5,891                     $19,812      $11,808

      Non-cash royalty
       revenue related to
       sale of future
       royalties                               4,740                       4,837                       8,702       10,610

      License,
       collaboration and
       other revenue                           6,208                      17,785                     102,948       25,866
                                               -----                      ------                     -------       ------

    Total revenue                             22,661                      28,513                     131,462       48,284


    Operating costs and expenses:

      Cost of goods sold                      10,534                       5,108                      18,978       13,015

      Research and
       development                            45,412                      36,702                      92,423       75,040

      General and
       administrative                         10,184                       9,619                      20,487       19,547

    Total operating
     costs and expenses                       66,130                      51,429                     131,888      107,602
                                              ------                      ------                     -------      -------


    Loss from
     operations                             (43,469)                   (22,916)                      (426)    (59,318)


    Non-operating income (expense):

      Interest expense                       (4,118)                    (4,488)                    (8,289)     (9,021)

      Non-cash interest
       expense on
       liability related
       to sale of future
       royalties                             (5,152)                    (5,134)                   (10,202)    (10,521)

      Interest income and
       other income
       (expense), net                            246                          96                         457          408
                                                 ---                         ---                         ---          ---

    Total non-
     operating expense,
     net                                     (9,024)                    (9,526)                   (18,034)    (19,134)


    Loss before
     provision for
     income taxes                           (52,493)                   (32,442)                   (18,460)    (78,452)


    Provision for
     income taxes                                164                         195                         377          386
                                                 ---                         ---                         ---          ---

    Net loss                               $(52,657)                  $(32,637)                  $(18,837)   $(78,838)
                                            ========                    ========                    ========     ========


    Basic and diluted
     net loss per share                      $(0.40)                    $(0.26)                    $(0.14)     $(0.63)
                                              ======                      ======                      ======       ======


    Weighted average
     shares outstanding
     used in computing
     basic and diluted
     net loss per share                      131,643                     127,040                     131,502      125,301
                                             =======                     =======                     =======      =======



                                 NEKTAR THERAPEUTICS

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    (In thousands)

                                     (Unaudited)

                                                            Six Months Ended June 30,
                                                            -------------------------

                                                                        2015                2014
                                                                        ----                ----

    Cash flows from operating activities:

    Net loss                                                       $(18,837)          $(78,838)

    Adjustments to
     reconcile net loss
     to net cash
     provided by (used
     in) operating
     activities:

    Non-cash royalty
     revenue related to
     sale of future
     royalties                                                       (8,702)           (10,610)

    Non-cash interest
     expense on
     liability related
     to sale of future
     royalties                                                        10,202              10,521

    Stock-based
     compensation                                                      9,737               8,525

    Depreciation and
     amortization                                                      5,833               6,519

    Other non-cash
     transactions                                                      (621)                865

    Changes in operating assets and liabilities:

    Accounts receivable,
     net                                                                (73)              (818)

    Inventory                                                          2,828               (659)

    Other assets                                                         190                 738

    Accounts payable                                                    (10)            (1,818)

    Accrued compensation                                               5,075             (2,868)

    Accrued clinical
     trial expenses                                                    1,238             (3,697)

    Other accrued
     expenses                                                          1,859               (314)

    Deferred revenue                                                 (4,434)              7,636

    Other liabilities                                                 11,772             (6,557)
                                                                      ------              ------

    Net cash provided by
     (used in) operating
     activities                                                       16,057            (71,375)


    Cash flows from investing activities:

    Maturities of
     investments                                                     111,001             118,777

    Purchases of
     investments                                                   (124,468)          (166,496)

    Sale of investments                                                5,215                   -

    Purchases of
     property, plant and
     equipment                                                       (4,584)            (5,192)
                                                                      ------              ------

    Net cash used in
     investing
     activities                                                     (12,836)           (52,911)


    Cash flows from financing activities:

    Payment of capital
     lease obligations                                               (2,484)            (1,650)

    Repayment of
     proceeds from sale
     of future royalties                                                   -            (7,000)

    Issuance of common
     stock, net of
     issuance costs                                                        -            116,601

    Proceeds from shares
     issued under equity
     compensation plans                                                7,798               7,961
                                                                       -----               -----

    Net cash provided by
     financing
     activities                                                        5,314             115,912


    Effect of exchange
     rates on cash and
     cash equivalents                                                   (25)                  6
                                                                         ---                 ---

    Net increase
     (decrease) in cash
     and cash
     equivalents                                                       8,510             (8,368)

    Cash and cash
     equivalents at
     beginning of period                                              12,365              39,067

    Cash and cash
     equivalents at end
     of period                                                       $20,875             $30,699
                                                                     =======             =======


    Supplemental disclosure of cash flow information:

    Cash paid for
     interest                                                         $8,320              $8,622
                                                                      ======              ======

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