EX-99.1 2 v105211_ex99-1.txt |Nektar logo| ================================================================================ News Release Nektar Therapeutics 201 Industrial Road San Carlos, CA 94070 650-631-3100 Phone 650-631-3150 Fax www.nektar.com ================================================================================ Nektar Therapeutics Announces Fourth Quarter And Year-End 2007 Financial Results SAN CARLOS, Calif., February 27, 2008 -- Nektar Therapeutics (Nasdaq: NKTR) announced today the company's financial results for the fourth quarter and year ended December 31, 2007. Revenue totaled $65.8 million in the fourth quarter of 2007 compared to $69.9 million in the fourth quarter of 2006. For the year ended December 31, 2007, Nektar reported total revenue of $273.0 million compared to $217.7 million in 2006. Cash, cash equivalents, and short-term investments were $482.4 million at December 31, 2007 compared to $452.6 million at September 30, 2007. Nektar reported a net income of $39.0 million or $0.42 per share in the fourth quarter of 2007 compared to a net loss of $38.9 million or $0.43 per share in the same period of 2006. For the twelve months ended December 31, 2007, our net loss was $32.8 million or $0.36 per share compared to a net loss of $154.8 million or $1.72 per share in the same period in 2006. "We have built a focused, efficient and driven company with an impressive and growing proprietary pipeline," said Howard W. Robin, President and CEO of the company. "We have moved multiple programs into phase 2 clinical development, entered into valuable new collaborations, and ended the year in a solid financial position. We expect to build on this momentum in 2008." 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) 314-5232 (U.S.); (617) 213-8052 (international) Passcode: 94561493 (Howard Robin is the host) Audio replay dial-in and passcode: Dial: (888) 286-8010 (U.S.) ;(617) 801-6888 (international) Passcode: 92959414 About Nektar Nektar Therapeutics is a biopharmaceutical company with a mission to develop and enable differentiated therapeutics with its industry-leading pulmonary and PEGylation technology platforms. Nektar pulmonary and PEGylation technology, expertise, manufacturing capabilities and know-how have enabled ten approved products for partners, which include the world's leading pharmaceutical and biotechnology companies. Nektar also develops its own products by applying its pulmonary and PEGylation technology platforms to existing medicines with the objective to enhance performance, such as improving efficacy, safety and compliance. This press release contains forward-looking statements that reflect the company's current views as to the value of its technology platforms and clinical pipeline of product candidates and overall prospects for the company's business. These forward-looking statements involve risks and uncertainties, including but not limited to: (i) the company's proprietary product candidates and those of certain of its partners are in the early phases 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 is subject to a number of uncertainties including but not limited to patient enrollment, clinical drug manufacturing, regulatory requirements and clinical outcomes, and (iii) the company's or its partner's success in obtaining regulatory approvals for 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 Quarterly Report on Form 10-Q and 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 (investors) twarner@nektar.com ------------------ Stephan Herrera, 415-488-7699 (investors) sherrera@nektar.com ------------------- Jennifer Ruddock, 650-631-4954 (media) jruddock@nektar.com ------------------- # # # NEKTAR THERAPEUTICS CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited)
ASSETS December 31, December 31, 2007 2006 ---------------- ---------------- Current assets: Cash and cash equivalents $ 76,293 $ 63,760 Short-term investments 406,060 394,880 Accounts receivable, net of allowance 21,637 47,148 Inventory 12,187 14,656 Other current assets 7,106 14,595 ---------------- ---------------- Total current assets 523,283 535,039 Long-term investments -- 8,337 Property and equipment, net 114,420 133,812 Goodwill 78,431 78,431 Other intangible assets, net 2,680 3,626 Other assets 6,289 8,932 ---------------- ---------------- Total assets $ 725,103 $ 768,177 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,589 $ 7,205 Accrued compensation 14,680 12,994 Accrued expenses to contract manufacturers 40,444 -- Accrued expenses 12,446 17,942 Interest payable 2,638 3,814 Capital lease obligations, current portion 2,335 711 Deferred revenue, current portion 19,620 16,409 Convertible subordinated notes, current portion -- 102,653 Other current liabilities 2,340 3,854 ---------------- ---------------- Total current liabilities 98,092 165,582 Convertible subordinated notes 315,000 315,000 Capital lease obligations 21,632 19,759 Deferred revenue 61,349 23,697 Other long-term liabilities 14,591 17,079 ---------------- ---------------- Total liabilites 510,664 541,117 Commitments and contingencies Stockholders' equity: Preferred stock -- -- Common stock 9 9 Capital in excess of par value 1,302,541 1,283,982 Accumulated other comprehensive income 1,643 62 Accumulated deficit (1,089,754) (1,056,993) ---------------- ---------------- Total stockholders' equity 214,439 227,060 ---------------- ---------------- Total liabilities and stockholders' equity $ 725,103 $ 768,177 ================ ================
(1) The consolidated balance sheet at December 31, 2006 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. Certain 2006 amounts have been reclassified between line items to conform with the 2007 presentation. NEKTAR THERAPEUTICS CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share information) (unaudited)
Three-Months Ended Twelve-Months Ended December 31, December 31, ---------------------------- ---------------------------- 2007 2006 2007 2006 ------------ ------------ ------------ ------------ Revenue: Product sales and royalties $ 26,702 $ 55,551 $ 180,755 $ 153,556 Contract research 38,489 12,053 85,925 56,303 Exubera commercialization readiness 582 2,300 6,347 7,859 ------------ ------------ ------------ ------------ Total revenue 65,773 69,904 273,027 217,718 Operating costs and expenses: Cost of goods sold 17,387 40,100 137,696 113,921 Cost of idle Exubera manufacturing capacity 6,314 -- 6,314 -- Exubera commercialization readiness costs 347 1,042 3,507 4,168 Research and development 39,310 42,521 153,575 149,381 General and administrative 13,997 17,441 56,336 78,319 Impairment of long lived assets(1) 28,396 8,254 28,396 9,410 Litigation Settlement 1,583 -- 1,583 17,710 Amortization of other intangible assets 236 708 946 4,039 Gain on termination of collaborative agreements, net (2) (79,178) -- (79,178) -- ------------ ------------ ------------ ------------ Total operating costs and expenses 28,392 110,066 309,175 376,948 ------------ ------------ ------------ ------------ Income (Loss) from operations 37,381 (40,162) (36,148) (159,230) Interest income 5,757 6,330 22,201 23,646 Interest expense (4,230) (5,458) (18,638) (20,793) Other Income 944 1,263 1,133 2,444 ------------ ------------ ------------ ------------ Income (Loss) before provision for income taxes 39,852 (38,027) (31,452) (153,933) Provision for income taxes 809 828 1,309 828 ------------ ------------ ------------ ------------ Net income (loss) $ 39,043 $ (38,855) $ (32,761) $ (154,761) ============ ============ ============ ============ Basic and diluted net earnings (loss) per share $ 0.42 $ (0.43) $ (0.36) $ (1.72) Shares used in computing basic and diluted net earnings (loss) per share (3) 92,211 90,499 91,876 89,789
Notes to Consolidated Statements of Operations (1) In Q4, the company conducted an evaluation and determined that uncertainties exist regarding the use of certain equipment and facilities related to Exubera manufacturing. As a result, Nektar recorded a non-cash impairment charge in Q4 of $28.4 million related to the write-down of these assets. (2) Gain on termination of collaborative agreement, net, is comprised of the following (in thousands): Three and Twelve-Months Ended December 31, 2007 -------- Pfizer termination settlement payment received 135,000 Exubera Inhaler Manufacturing and Supply Agreement Termination Tech Group (13,765) Bespak (18,598) -------- 102,637 Settlement of assets and liabilities related to Pfizer (23,459) -------- Gain on termination of collaborative agreements, net 79,178 ======== (3) For the three-months ended December 31, 2007, there were approximately 578 dilutive shares which did not change earnings per share. NEKTAR THERAPEUTICS CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, except per share information) (unaudited
Twelve-Months Ended December 31, -------------------------------------- 2007 2006 ---------------- ---------------- Cash flows provided by (used in) operating activities: Net loss $ (32,761) $ (154,761) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 29,028 33,509 Stock-based compensation 14,779 30,982 Impairment of long lived assets 28,396 9,410 Amortization of gain related to sale of building (874) (874) Gain on disposal of investment (860) (2,252) Loss on sale or disposal of assets 1,843 123 Changes in assets and liabilities: Decrease (increase) in trade accounts receivable 24,318 (34,654) Decrease (increase) in inventories 1,503 3,971 Decrease (increase) in other assets 7,443 1,095 Increase (decrease) in accounts payable (3,147) (8,926) Increase (decrease) in accrued compensation 986 3,581 Increase (decrease) in accrued expenses 36,151 5,503 Increase (decrease) in interest payable (1,176) 23 Increase (decrease) in deferred revenue 40,863 16,245 Increase (decrease) in other liabilities (190) 4,310 ---------------- ---------------- Net cash provided by (used in) operating activities 146,302 (92,715) Cash flows from investing activities: Purchases of property and equipment (32,796) (22,524) Purchases of investments (593,118) (502,230) Sales of investments 2,057 2,252 Maturities of investments 591,202 405,622 ---------------- ---------------- Net cash provided by (used in) investing activities (32,655) (116,880) Cash flows from financing activities: Issuance of common stock, net of issuance costs 3,780 22,259 Payments of loan and capital lease obligations (2,895) (10,488) Repayments of convertible subordinated notes (102,653) -- ---------------- ---------------- Net cash provided by (used in) financing activities (101,768) 11,771 Effect of exchange rates on cash and cash equivalents 654 311 ---------------- ---------------- Net increase (decrease) in cash and cash equivalents 12,533 (197,513) Cash and cash equivalents at beginning of year 63,760 261,273 ---------------- ---------------- Cash and cash equivalents at end of year 76,293 63,760 ================ ================