EX-99.1 2 v113145_ex99-1.txt 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 ------------ ------------ 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 ------------ ------------ Total operating costs and expenses 61,881 110,985 ------------ ------------ 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) ============ ============ 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 ================== ================== 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 ============ ============