NEKTAR
News Release
Nektar Therapeutics Announces First Quarter 2008 Results
SAN CARLOS, Calif., May 7, 2008 -- Nektar Therapeutics (Nasdaq: NKTR) announced
today the company's financial results for the first quarter ended March 31,
2008.
Cash, cash equivalents, and short-term investments were $412.6 million at March
31, 2008 compared to $482.4 million at December 31, 2007.
Nektar reported a net loss of $40.7 million or $0.44 per share in the first
quarter of 2008, compared to a net loss of $25.7 million or $0.28 per share in
the first quarter of 2007. The increase in net loss is primarily the result of
$4.1 million of expense for maintaining third-party Exubera manufacturing
capacity, $5.3 million of expense for our workforce reduction, loss of gross
margin associated with Pfizer`s termination of the Exubera relationship, as well
as significant incremental investment in clinical development programs.
Offsetting these expenses are substantial operating efficiencies Nektar has
achieved over the last twelve months.
Revenue totaled $20.0 million in the first quarter of 2008 compared to $85.0
million in the first quarter of 2007. This decrease is the result of the
termination of Exubera by Pfizer.
"The first quarter was significant for Nektar as it represents the first time
that the company has made substantial investment into the clinical development
of innovative proprietary drug candidates, "said Howard W. Robin, President and
Chief Executive Officer. "Today we have moved past inhaled insulin, and our
proprietary small molecule PEGylation drug development platform is generating a
great deal of industry and scientific interest. We intend to build and advance
our impressive pipeline while continuing to exercise financial responsibility."
Mr. Robin will host a conference call today for analysts and investors beginning
at 2:00 p.m. Pacific time to discuss the company's performance. This conference
call will be available via webcast and can be accessed through a link that is
posted on the Investor Relations section of the Nektar website, www.nektar.com.
The web broadcast of the conference call will be available for replay through
March 12, 2008.
To access the conference call, follow these instructions:
Dial: (866) 713-8562 (U.S.); (617) 597-5310 (international)
Passcode: 50572577 (Howard Robin is the host)
Audio replay dial-in and passcode:
Dial: (888) 286-8010 (U.S.) ;(617) 801-6888 (international)
Passcode: 73371402
About Nektar
Nektar Therapeutics is a biopharmaceutical company that develops and enables
differentiated therapeutics with its industry-leading PEGylation and pulmonary
drug development platforms. Nektar's technology and drug development expertise
have enabled nine approved products for partners, which include leading
biopharmaceutical companies. Nektar is also developing a robust pipeline of its
own high-value therapeutics that addresses unmet medical needs by leveraging and
expanding its technology platforms to improve known molecules.
This press release contains forward-looking statements that reflect the
company's current views regarding the potential, progress, and clinical plans
for the company's proprietary and partnered product pipeline, and the value and
potential of the company's technology platforms. These forward-looking
statements involve risks and uncertainties, including but not limited to: (i)
the company's proprietary product candidates and those of its partners are in
various stages of clinical development and the risk of failure is high and can
occur at any stage prior to regulatory approval; (ii) the timing or success of
the commencement or end of clinical trials and commercial launch of partnered
products may be delayed or unsuccessful due to slower than anticipated patient
enrollment, drug manufacturing challenges, changing standards of care, clinical
trial design, clinical outcomes, or delay or failure in obtaining regulatory
approval in one or more important markets; (iii) clinical trials are long,
expensive and uncertain processes and the risk of failure of any product that is
in clinical development and prior to regulatory approval remains high and can
occur at any stage due to efficacy, safety or other factors; (iv) the company's
patent applications for its proprietary or partner product candidates may not
issue, patents that have issued may not be enforceable, or intellectual property
licenses from third parties may be required in the future; and (v) the outcome
of any existing or future intellectual property or other litigation related to
the company's proprietary product candidates. Other important risks and
uncertainties are detailed in the company's reports and other filings with the
Securities and Exchange Commission, including its most recent Annual Report on
Form 10-K. Actual results could differ materially from the forward-looking
statements contained in this press release. The company undertakes no obligation
to update forward-looking statements, whether as a result of new information,
future events or otherwise.
Tim Warner, 650-283-4915
twarner@nektar.com
Stephan Herrera, 415-488-7699
sherrera@nektar.com
Jennifer Ruddock, 650-631-4954
jruddock@nektar.com
# # #
NEKTAR THERAPEUTICS
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
(unaudited)
Three-Months Ended March 31,
2008 2007
------------ ------------
Revenue:
Product sales and royalties $ 10,371 $ 73,019
Contract research 9,621 11,997
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Total revenue 19,992 85,016
Operating costs and expenses:
Cost of goods sold 7,227 56,522
Cost of idle Exubera manufacturing capacity 5,334 --
Research and development 37,373 37,492
General and administrative 11,711 16,735
Amortization of other intangible assets 236 236
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Total operating costs and expenses 61,881 110,985
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Income (Loss) from operations (41,889) (25,969)
Non-Operating income (expense):
Interest income 5,013 5,473
Interest expense (3,918) (4,933)
Other Income 302 6
------------ ------------
Total non-operating income 1,397 546
Income (Loss) before provision for income taxes (40,492) (25,423)
Provision for income taxes 213 250
------------ ------------
Net income (loss) $ (40,705) $ (25,673)
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Basic and diluted net earnings (loss) per share $ (0.44) $ (0.28)
Shares used in computing basic and
diluted net earnings (loss) per share (3) 92,330 91,454
NEKTAR THERAPEUTICS
CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
ASSETS March 31, 2008 December 31, 2007(1)
------------------ ------------------
Current assets:
Cash and cash equivalents $ 36,676 $ 76,293
Short-term investments 375,954 406,060
Accounts receivable, net of allowance 14,040 21,637
Inventory 11,027 12,187
Other current assets 5,826 7,106
------------------ ------------------
Total current assets 443,523 523,283
Property and equipment, net 114,381 114,420
Goodwill 78,431 78,431
Other intangible assets, net 2,444 2,680
Other assets 5,057 6,289
------------------ ------------------
Total assets $ 643,836 $ 725,103
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,556 $ 3,589
Accrued compensation 10,884 14,680
Accrued expenses to contract manufacturers 8,450 40,444
Accrued expenses 12,409 12,446
Interest payable 85 2,638
Capital lease obligations, current portion 2,259 2,335
Deferred revenue, current portion 19,657 19,620
Other current liabilities 2,345 2,340
------------------ ------------------
Total current liabilities 57,645 98,092
Convertible subordinated notes 315,000 315,000
Capital lease obligations 21,330 21,632
Deferred revenue 60,112 61,349
Other long-term liabilities 13,990 14,591
------------------ ------------------
Total liabilites 468,077 510,664
Commitments and contingencies
Stockholders' equity:
Preferred stock -- --
Common stock 9 9
Capital in excess of par value 1,303,996 1,302,541
Accumulated other comprehensive income 2,213 1,643
Accumulated deficit (1,130,459) (1,089,754)
------------------ ------------------
Total stockholders' equity 175,759 214,439
------------------ ------------------
Total liabilities and stockholders' equity $ 643,836 $ 725,103
================== ==================
(1) The consolidated balance sheet at December 31, 2007 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
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share information)
(unaudited)
Three-Months Ended March 31,
----------------------------
2008 2007
------------ ------------
Cash flows provided by (used in) operating activities:
Net loss $ (40,705) $ (25,673)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 5,917 7,571
Stock-based compensation 1,084 6,861
Amortization of gain related to sale of building (219) (219)
Loss on sale or disposal of assets 107 304
Changes in assets and liabilities:
Decrease (increase) in trade accounts receivable 7,597 (17,599)
Decrease (increase) in inventories 1,160 (2,114)
Decrease (increase) in other assets 2,044 3,227
Increase (decrease) in accounts payable (2,033) (3,547)
Increase (decrease) in accrued compensation (3,932) (1,635)
Increase (decrease) in accrued expenses to
contract manufacturers (31,994) --
Increase (decrease) in accrued expenses (37) (2,604)
Increase (decrease) in interest payable (2,553) (2,684)
Increase (decrease) in deferred revenue (1,200) 8,801
Increase (decrease) in other liabilities (208) 314
------------ ------------
Net cash used in operating activities (64,972) (28,997)
Cash flows from investing activities:
Purchases of property and equipment (5,281) (5,556)
Purchases of investments (156,092) (79,411)
Maturities of investments 186,758 167,696
------------ ------------
Net cash provided by investing activities 25,385 82,729
Cash flows used in financing activities:
Issuance of common stock 371 2,134
Payments of loan and capital lease obligations (411) (400)
Repayments of convertible subordinated notes
-- (36,026)
------------ ------------
Net cash provided by (used in) financing activities (34,292) (40)
Effect of exchange rates on cash and cash equivalents 10 (60)
------------ ------------
Net increase (decrease) in cash and cash equivalents $ (39,617) $ 19,380
Cash and cash equivalents at beginning of period $ 76,293 $ 63,760
------------ ------------
Cash and cash equivalents at end of period $ 36,676 $ 83,140
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