EX-99.1 2 a4693415ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Nektar Announces Second Quarter 2004 Results SAN CARLOS, Calif.--(BUSINESS WIRE)--Aug. 2, 2004--Nektar Therapeutics (Nasdaq:NKTR) announced today its financial results for the second quarter ended June 30, 2004. The company reported total revenue of $28.5 million for the three months ended June 30, 2004, compared to $27.7 million for the three months ended June 30, 2003. In the second quarter of 2004, product revenue was $6.4 million compared to $6.5 million in the second quarter of 2003, and contract research revenue totaled $22.1 million compared to $21.2 million in the second quarter of 2003. The company reported a net loss of $22.2 million or $(0.27) per share for the three months ended June 30, 2004 compared to a net loss of $13.0 million or $(0.23) per share for the three months ended June 30, 2003. For the six months ended June 30, 2004, Nektar reported total revenue of $54.4 million compared to $53.3 million for the six months ended June 30, 2003. For the six months ended June 30, 2004, product revenue was $10.7 million compared to $13.7 million for the six months ended June 30, 2003, and contract research revenue totaled $43.6 million compared to $39.6 million for the six months ended June 30, 2003. For the six months ended June 30, 2004, Nektar reported a net loss of $62.2 million or $(0.85) per share compared to a net loss for the six months ended June 30, 2003 of $33.0 million or $(0.59) per share. As of June 30, 2004, the company reported cash, cash equivalents and short-term investments totaling approximately $425.3 million compared to $467.4 million as of March 31, 2004. "In the second quarter we continued to see excellent progress and growth in our product pipeline," said Ajit S. Gill, Nektar president and chief executive officer (CEO). "First, at the annual conference of the American Diabetes Association in June, Pfizer and Aventis presented data from Exubera(R) (inhaled human insulin powder) clinical trials that increase our confidence in the likelihood of Exubera realizing its potential as a major contributor to diabetes care. Second, Eyetech and Pfizer filed for approval of Macugen(TM) (pegaptanib sodium injection) for age-related macular degeneration, the leading cause of blindness for the elderly in developed countries. Further, we expanded our pipeline by adding a new collaboration with Pfizer to PEGylate a Pfizer product. The PEGylated version of the undisclosed Pfizer product is already in clinical testing." Summary of 2nd Quarter 2004 Progress Exubera In June, Nektar reported that Pfizer and Aventis announced results of long-term studies showing sustained glycemic control and pulmonary function in patients with type 2 diabetes taking Exubera. The data were presented at the 64th Annual Scientific Sessions of the American Diabetes conference. They included a pooled analysis of two one-year open-label studies involving 627 patients with type 2 diabetes showing that patients who added Exubera to their treatment regimen experienced no clinically important effect on pulmonary function compared with patients treated with oral agents alone. Glycemic control was maintained in both arms. An additional analysis of 209 patients, 159 of whom were treated with Exubera for up to four years, further supported these findings in type 1 and type 2 patients treated with Exubera. As reported in March 2004, the European Medicines Evaluation Agency (EMEA) has accepted the filing of a marketing authorization application for Exubera. Partner Pipeline On June 17, 2004, Eyetech Pharmaceuticals and Pfizer announced that they have completed the filing of a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) for Macugen as a treatment for wet age-related macular degeneration, the leading cause of severe vision loss in patients older than 50 years of age in the developed world. Macugen, which uses Nektar Advanced PEGylation Technology, has been fast-tracked by the FDA given the significant unmet medical need. Eyetech is also developing Macugen for diabetic macular edema which is in Phase II clinical trials. In a separate press release, Nektar today announced an agreement with Pfizer under which Pfizer will use Nektar Advanced PEGylation Technology for one of its products. The PEGylated version of this undisclosed product is in clinical testing. Proprietary Products Group Nektar's Proprietary Products Group applies Nektar technologies to create highly differentiated versions of already-approved drug molecules. Since January 2003, the Proprietary Products Group has advanced two products into the clinic. Conference Call Information Ajit S. Gill, Nektar president and CEO, will host a conference call today for analysts and investors beginning at 2:00 p.m. Pacific Time, to discuss further the company's performance. Investors can access a live audio-only Webcast through a link that will be posted on the Investor Relations section at Nektar's Web site at http://www.nektar.com. The Web broadcast of the conference call will be available for replay through August 16, 2004. Analysts and investors can also access the conference call live via telephone by dialing (888) 862-6557 (US); (630) 691-2748 (international). The passcode is Nektar and the leader is Mr. Ajit Gill. An audio replay will be available shortly following the call through August 16, 2004, and can be accessed by dialing (877) 213-9653 (U.S.); or (630) 652-3041 (international) with a passcode of 9483662. In the event that any non-GAAP financial measure is discussed on the conference call that is not described in this earnings release, related information will be made available on the Investor Relations page at our Web site as soon as practicable after the conclusion of this conference call. About Nektar Nektar Therapeutics provides industry-leading drug delivery technologies, expertise and manufacturing to enable the development of high-value, differentiated therapeutics. Nektar's advanced drug delivery capabilities are designed to enable the company's biotechnology and pharmaceutical partners to solve drug development challenges and realize the full potential of their therapeutics, from developing new molecular entities to managing the life cycles of established products. This release contains forward-looking statements that reflect management's current views as to Nektar's business strategy, product and technology development plans and funding, collaborative arrangements, clinical trials, and other future events and operations. These forward-looking statements involve uncertainties and other risks that are detailed in Nektar's reports and other filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 2003, as amended, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2004. Actual results could differ materially from these forward-looking statements. NEKTAR THERAPEUTICS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share information) Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- (unaudited) (unaudited) Revenue: Contract research revenue 22,102 $ 21,210 $ 43,611 $ 39,603 Product sales 6,425 6,538 10,747 13,673 --------- --------- --------- --------- Total revenue 28,527 27,748 54,358 53,276 Operating costs and expenses: Cost of goods sold 6,733 3,708 9,269 8,330 Research and development 36,451 32,380 70,471 64,521 General and administrative 5,479 5,136 9,901 10,314 Amortization of other intangible assets 981 1,127 1,962 2,254 --------- --------- --------- --------- Total operating costs and expenses 49,644 42,351 91,603 85,419 --------- --------- --------- --------- Loss from operations (21,117) (14,603) (37,245) (32,143) Gain/(loss) on extinguishment of debt -- 4,320 (9,258) 4,320 Other income/(expense), net 124 132 431 251 Interest income 1,608 1,262 2,854 2,886 Interest expense (2,779) (4,150) (18,814) (8,302) --------- --------- --------- --------- Net loss before provision for income taxes (22,164) (13,039) (62,032) (32,988) Provision for income taxes -- -- 132 -- --------- --------- --------- --------- Net loss $(22,164) $(13,039) $(62,164) $(32,988) ========= ========= ========= ========= Basic and diluted net loss per common share $ (0.27) $ (0.23) $ (0.85) $ (0.59) ========= ========= ========= ========= Shares used in computing basic and diluted net loss per common share 83,501 55,718 72,858 55,660 ========= ========= ========= ========= NEKTAR THERAPEUTICS CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, 2004 December 31, 2003 (unaudited) (1) -------------- ----------------- ASSETS Current assets: Cash, cash equivalents and short-term investments $425,271 $285,967 Other current assets 36,020 20,531 -------------- ----------------- Total current assets 461,291 306,498 Restricted investments -- 12,442 Property and equipment, net 157,615 149,388 Goodwill 130,120 130,120 Other intangible assets 8,709 10,963 Deposits and other assets 3,184 7,377 -------------- ----------------- $760,919 $616,788 ============== ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $22,094 $26,797 Capital lease obligations - current 1,469 1,341 Deferred revenue 21,679 18,719 -------------- ----------------- Total current liabilities 45,242 46,857 Convertible subordinated debentures 173,949 359,988 Accrued rent 2,148 2,110 Capital lease obligations - noncurrent 30,472 31,686 Other long-term liabilities 11,747 11,956 Stockholders' equity: Preferred stock at par -- -- Common stock at par 8 6 Capital in excess of par 1,179,131 778,500 Deferred compensation (3,362) (38) Accumulated other comprehensive gain/(loss) (1,017) 958 Accumulated deficit (677,399) (615,235) -------------- ----------------- Total stockholders' equity 497,361 164,191 -------------- ----------------- $760,919 $616,788 ============== ================= (1) The balance sheet at December 31, 2003 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. CONTACT: Nektar Therapeutics Joyce Strand, 650-631-3138