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Nektar Therapeutics Reports First Quarter 2009 Financial Results

SAN CARLOS, Calif., May 6 /PRNewswire-FirstCall/ -- Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the first quarter ended March 31, 2009.

Net loss for the quarter ended March 31, 2009 was $31.8 million or $0.34 per share, compared to net loss of $40.7 million or $0.44 per share in the first quarter of 2008.

Nektar made improvements to its operating efficiencies as compared to a year ago. Total operating costs and expenses were down 35% to $40.0 million in the first quarter of 2009 as compared to $61.9 million in the first quarter of 2008.

"Nektar continues to make great progress advancing our clinical pipeline and delivering on our objectives in the first quarter of 2009," stated Howard W. Robin, President and Chief Executive Officer of Nektar. "Our recently reported positive Phase 2 data for NKTR-118 provides the first clinical validation of our advanced polymer conjugate technology with oral small molecule drugs. With a robust clinical pipeline and a proven technology platform, Nektar is well-positioned to enter into strategic, high-value partnerships and capitalize on multiple new product opportunities generated by our platform."

Research and development expense was $23.9 million in the first quarter of 2009 as compared to $37.4 million for the same quarter in 2008. Included in the $23.9 million of overall research and development spending is approximately $13.5 million of investment in Nektar preclinical and clinical development programs.

Revenue for the three month period ended March 31, 2009 was $9.7 million compared to revenue of $20.0 million in the first quarter of 2008. This decrease in revenue is primarily the result of lower contract research and manufacturing revenues resulting from the sale of certain of the company's pulmonary assets to Novartis.

Cash, cash equivalents, and short-term investments at March 31, 2009 were $325.3 million.

Conference Call to Discuss First Quarter 2009 Financial Results

A conference call to review results will be held on May 6, 2009 at 2 PM Pacific Time.

Details are below:

Howard Robin, president and chief executive officer, and John Nicholson, chief financial officer, will host a conference call beginning at 5:00 p.m. Eastern Time (ET)/2:00 p.m. Pacific Time (PT) on Wednesday, May 6, 2009.

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:

              To access the conference call, follow these instructions:
              Dial: 888.396.2369 (U.S.); 617.847.8710  (international)
              Participant Passcode: 82263149 (Howard Robin is the  host)

An audio replay will also be available shortly after the call and will remain so through May 20, 2009.

              To access the replay, follow these instructions:
              Dial: 888-286-8010 (U.S.); 617-801-6888 (international)
              Participant Passcode: 19053055

About Nektar

Nektar Therapeutics is a biopharmaceutical company developing novel therapeutics based on its PEGylation and advanced polymer conjugate technology 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 and enable molecules.

For more information on Nektar Therapeutics, please visit

This press release contains forward-looking statements that reflect management's current views regarding the progress and potential of the company's pipeline of proprietary drug candidates, the value and potential of the company's technology platform, and the company's position to enter into new strategic collaborations with third parties. These forward-looking statements involve numerous risks and uncertainties, including but not limited to: (i) the company's proprietary product candidates and those of its collaboration partners are in various stages of clinical development and the risk of failure is high and can unexpectedly occur at any stage of development prior to regulatory approval for numerous reasons including, without limitation, safety and efficacy findings; (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) 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; (iv) the outcome of any future intellectual property or other litigation related to the company's proprietary product candidates or complex commercial agreements; (v) if the company is unable to establish and maintain collaboration partnerships on attractive commercial terms, our business, results of operations and financial condition could suffer; and (vi) certain other important risks and uncertainties set forth in the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2009 and the company's most recent Quarterly Report on Form 10-Q to be filed on or about May 8, 2009. 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.

    Jennifer Ruddock, 650-631-4954
    Nektar Therapeutics

    Susan Noonan, (212) 966-3650
    SAN Group

                        NEKTAR THERAPEUTICS
           (In thousands, except per share information)

                                                 Ended March 31,
                                                  2009      2008
                                                  ----      ----
       Product sales and royalties               $6,470   $10,371
       Collaboration and other                    3,241     9,621
                                                  -----     -----
    Total revenue                                 9,711    19,992

    Operating costs and expenses:
       Cost of goods sold                         5,099     7,227
       Other cost of revenue                          -     5,334
       Research and development                  23,890    37,373
       General and administrative                11,020    11,947
                                                 ------    ------
    Total operating costs and expenses           40,009    61,881

    Loss from operations                        (30,298)  (41,889)

    Non-Operating income (expense):
      Interest income                             1,650     5,013
      Interest expense                           (3,337)   (3,918)
      Other Income                                   45       302
                                                    ---       ---
    Total non-operating income (expense)         (1,642)    1,397

    Loss before provision for income taxes      (31,940)  (40,492)
    Provision (benefit) for income taxes           (133)      213
                                                   ----       ---
    Net income (loss)                          $(31,807) $(40,705)
                                               ========  ========

    Basic and diluted net earnings (loss)
     per share                                   $(0.34)   $(0.44)

    Shares used in computing basic and
     diluted net earnings (loss) per share       92,516    92,330

                               NEKTAR THERAPEUTICS
                                  (In thousands)

                  ASSETS                    March 31,     December 31,
                                               2009         2008  (1)
                                            ---------     ------------
    Current assets:
      Cash and cash equivalents              $122,300       $155,584
      Short-term investments                  202,999        223,410
      Accounts receivable, net of allowance     5,796         11,161
      Inventory                                13,392          9,319
      Other current assets                      6,108          6,746
                                                -----          -----
        Total current assets                  350,595        406,220

    Property and equipment, net                75,020         73,578
    Goodwill                                   76,501         76,501
    Other assets                                3,823          4,237
                                                -----          -----
      Total  assets                          $505,939       $560,536
                                             ========       ========


    Current liabilities:
      Accounts payable                         $2,675        $13,832
      Accrued compensation                      5,437         11,570
      Accrued clinical trial expenses          14,982         17,622
      Accrued expenses                         11,583          9,923
      Deferred revenue, current portion         8,416         10,010
      Interest payable                             58          1,805
      Other current liabilities                 3,486          3,612
                                                -----          -----
        Total current liabilities              46,637         68,374

    Convertible subordinated notes            214,955        214,955
    Capital lease obligations                  19,989         20,347
    Deferred revenue                           54,132         55,567
    Deferred gain                               5,682          5,901
    Other long-term liabilities                 5,270          5,238
                                                -----          -----
        Total liabilities                     346,665        370,382

    Commitments and contingencies

    Stockholders' equity:
      Preferred stock                               -              -
      Common stock                                  9              9
      Capital in excess of par value        1,315,182      1,312,796
      Accumulated other comprehensive
       income (loss)                              (20)         1,439
      Accumulated deficit                  (1,155,897)    (1,124,090)
                                           ----------     ----------
        Total stockholders' equity            159,274        190,154
                                              -------        -------
      Total liabilities and
       stockholders' equity                  $505,939       $560,536
                                             ========       ========

    (1) The consolidated balance sheet at December 31, 2008 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 2008 amounts have been reclassified
     between line items to conform with the 2009 presentation.

                              NEKTAR THERAPEUTICS
                 (In thousands, except per share information)

                                                          Ended March 31,
                                                          2009      2008
                                                          ----      ----
    Cash flows used in operating activities:
      Net loss                                         $(31,807) $(40,705)
      Adjustments to reconcile net loss to net
       cash used in operating activities:
          Depreciation and amortization                   3,615     5,917
          Stock-based compensation                        2,325     1,084
          Other non-cash transactions                       115      (112)
      Changes in assets and liabilities:
          Decrease (increase) in trade accounts
           receivable                                     5,365     7,597
          Decrease (increase) in inventories             (4,073)    1,160
          Decrease (increase) in prepaids and other
           assets                                           496     2,044
          Increase (decrease) in accounts payable        (8,095)   (2,033)
          Increase (decrease) in accrued compensation    (6,133)   (3,932)
          Increase (decrease) in accrued clinical
           trial expenses                                (2,640)       86
          Increase (decrease) in accrued expenses to
           contract manufacturers                             -   (31,994)
          Increase (decrease) in accrued expenses         3,364      (123)
          Increase (decrease) in deferred revenue        (3,029)   (1,200)
          Increase (decrease) in other liabilities       (1,897)   (2,761)
                                                         ------    ------
      Net cash used in operating activities             (42,394)  (64,972)

    Cash flows from investing activities:
          Purchases of property and equipment            (5,104)   (5,281)
          Purchases of investments                      (85,298) (156,092)
          Maturities of investments                     104,458   186,758
          Transaction costs from Novartis pulmonary
           asset sale                                    (4,766)        -
                                                         ------       ---
      Net cash provided by investing activities           9,290    25,385

    Cash flows used in financing activities:
          Proceeds from issuances of common stock            61       371
          Payments of loan and capital lease
           obligations                                     (302)     (411)
                                                           ----      ----
      Net cash used in financing activities                (241)      (40)
      Effect of exchange rates on cash and cash
       equivalents                                           61        10
                                                            ---       ---
      Net decrease in cash and cash equivalents        $(33,284) $(39,617)
      Cash and cash equivalents at beginning of
       period                                          $155,584   $76,293
                                                       --------   -------
      Cash and cash equivalents at end of period       $122,300   $36,676
                                                       ========   =======

SOURCE Nektar Therapeutics
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