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Nektar Therapeutics Reports First Quarter 2011 Financial Results

SAN FRANCISCO, April 27, 2011 /PRNewswire/ --  Nektar Therapeutics (Nasdaq: NKTR) today reported its financial results for the quarter ended March 31, 2011.

Cash, cash equivalents, and short-term investments at March 31, 2011 were $518.6 million as compared to $315.9 million at December 31, 2010.

Revenue for the first quarter of 2011 decreased to $11.3 million as compared to $33.2 million in the first quarter of 2010.  This decrease in revenue year over year is primarily attributable to the completion as of December 31, 2010 of the amortization of the $125.0 million upfront payment received in 2009 from AstraZeneca for the NKTR-118 license agreement.  

Total operating costs and expenses in the first quarter of 2011 increased by 23% to $45.2 million, compared to $36.6 million in the first quarter 2010.  This increase was primarily a result of higher development expenses related to the advancement of multiple programs in clinical development.  Research and development expense increased to $30.2 million in the first quarter 2011 as compared to $23.3 million for the same quarter in 2010.  General and administrative expense increased to $11.7 million in the first quarter 2011 from $9.0 million in the first quarter of 2010.

“Nektar made great progress in the first quarter of 2011,” said Howard W. Robin, President and Chief Executive Officer of Nektar. “The first patients were enrolled in the comprehensive Phase 3 program for NKTR-118, and our proprietary next-generation opioid candidate, NKTR-181, entered Phase 1 clinical development.  We are also preparing our lead oncology candidate, NKTR-102, for advancement into Phase 3 development.  We continue to be highly focused on advancing our preclinical pipeline to enable the introduction of one new IND candidate each year.”

Net loss for the first quarter ended March 31, 2011 was $36.0 million or $0.33 loss per share as compared to a net loss of $6.1 million or $0.07 loss per share in the first quarter of 2010.

Conference Call to Discuss First Quarter 2011 Financial ResultsNektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time (ET)/2:00 p.m. Pacific Time (PT) today, Wednesday, April 27, 2011.

The press release and 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: The web broadcast of the conference call will be available for replay through Wednesday, May 25, 2011.

To access the conference call, follow these instructions:

Dial: (800) 573-4754 (U.S.); (617) 224-4325 (international)

Passcode: 88966725 (Nektar Therapeutics is the host)

An audio replay will also be available shortly following the call through Wednesday, May 25, 2011 and can be accessed by dialing (888) 286-8010 (U.S.); or (617) 801-6888 (international) with a passcode of 92209339.

In the event that any non-GAAP financial measure is discussed on the conference call that is not described in the press release, or explained on the conference call, related information will be made available on the Investor Relations page at the Nektar website as soon as practical after the conclusion of the conference call.

About NektarNektar Therapeutics is a biopharmaceutical company developing novel therapeutics based on its PEGylation and advanced polymer conjugation technology platforms. Nektar has a robust R&D pipeline of potentially high-value therapeutics in oncology, pain and other areas. In the area of pain, Nektar has an exclusive worldwide license agreement with AstraZeneca for NKTR-118, an investigational drug candidate, being evaluated in Phase 3 clinical studies as a once-daily, oral tablet for the treatment of opioid-induced constipation.  The agreement also includes NKTR-119, an earlier stage development program that is a co-formulation of NKTR-118 and an opioid.  NKTR-181, a novel mu-opioid analgesic molecule, is being evaluated in Phase 1 clinical studies.  In oncology, NKTR-102, a novel topoisomerase I-inhibitor, is being evaluated in Phase 2 clinical studies for the treatment of breast, ovarian and colorectal cancers.  NKTR-105, a novel anti-mitotic agent, is in a Phase 1 clinical study in cancer patients with refractory solid tumors.

Nektar's technology has enabled seven approved products in the U.S. or Europe through partnerships with leading biopharmaceutical companies, including UCB's Cimzia® for Crohn's disease and rheumatoid arthritis, Roche's PEGASYS® for hepatitis C and Amgen's Neulasta® for neutropenia.

Nektar is headquartered in San Francisco, California, with additional R&D operations in Huntsville, Alabama and Hyderabad, India. Further information about the company and its drug development programs and capabilities may be found online at

This press release contains forward-looking statements that reflect management's current views regarding the value and potential of Nektar's drug candidate pipeline, the value and potential of Nektar's technology platform, and the value and potential of certain of Nektar's collaborations with third parties.  These forward-looking statements involve numerous risks and uncertainties, including but not limited to: (i) Nektar's 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 prior to regulatory approval for numerous reasons including safety and efficacy findings even after positive findings in preclinical and clinical studies; (ii) the timing of the commencement or end of clinical trials and the successful commercial launch of our drug candidates may be delayed or unsuccessful due to slower than anticipated patient enrollment, manufacturing challenges, changing standards of care, regulatory delay, evolving regulatory requirements, clinical trial design, clinical outcomes, competitive factors, or delay or failure in ultimately obtaining regulatory approval in one or more important markets; (iii) scientific discovery of new medical breakthroughs is an inherently uncertain process and the future success of the application of Nektar's technology platform to potential new drug candidates is therefore highly uncertain and unpredictable and one or more research and development programs could fail; (iv) Nektar's patent applications for its proprietary or partner product candidates may not issue, patents that have issued may not be enforceable, or additional intellectual property licenses from third parties may be required in the future; (v) the outcome of any future intellectual property or other litigation related to Nektar's proprietary product candidates or complex commercial agreements; and (vi) certain other important risks and uncertainties set forth in Nektar's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2011.  Actual results could differ materially from the forward-looking statements contained in this press release.  Nektar undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.Nektar Investor Inquiries:Jennifer Ruddock/Nektar Therapeutics

(650) 631-4954Susan Noonan/SA Noonan Communications, LLC

(212) 966-3650Nektar Media Inquiries:Karen Bergman/BCC Partners

(650) 575-1509 Michelle Corral/BCC Partners

(415) 794-8662NEKTAR THERAPEUTICSCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited)ASSETSMarch 31, 2011December 31, 2010

(1)Current assets:Cash and cash equivalents

7,755Short-term investments

496,157298,177Accounts receivable


11,7127,266Other current assets

6,8595,679Total current assets

539,373353,979Property and equipment, net


76,50176,501Other assets

976972Total assets

521,225LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable

7,194Accrued compensation

7,6809,252Accrued expenses

9,2318,540Accrued clinical trial expenses

13,64912,144Deferred revenue, current portion

19,97420,584Other current liabilities

4,8656,394Total current liabilities

58,88064,108Convertible subordinated notes

214,955214,955Capital lease obligations

16,44817,014Deferred revenue

122,818124,763Deferred gain

3,9344,152Other long-term liabilities

6,2055,571Total liabilities

423,240430,563Commitments and contingenciesStockholders' equity:Preferred stock

--Common stock

119Capital in excess of par value

1,580,9901,354,232Accumulated other comprehensive income

818968Accumulated deficit

(1,300,581)(1,264,547)Total stockholders' equity

281,23890,662Total liabilities and stockholders' equity

521,225(1) The consolidated balance sheet at December 31, 2010 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 THERAPEUTICSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share information)(unaudited)Three Months Ended March 31, 20112010Revenue:   Product sales and royalties

4,793$  3,584   License, collaboration, and other

6,50629,653Total revenue

11,29933,237Operating costs and expenses:   Cost of goods sold

3,2634,296   Research and development

30,17623,286   General and administrative

11,7279,013Total operating costs and expenses

45,16636,595Loss from operations

(33,867)(3,358)Non-operating income (expense):Interest income

432463Interest expense

(2,585)(2,951)Other income, net

13424Total non-operating expense

(2,019)(2,464)Loss before provision for income taxes

(35,886)(5,822)Provision for income taxes

148308Net loss

$ (36,034)$ (6,130)Basic and diluted net loss per share

(0.33)$   (0.07)Weighted average shares used in computing basic and diluted net loss per share

108,67793,631NEKTAR THERAPEUTICSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(unaudited)Three Months Ended March 31,20112010Cash flows from operating activities:Net loss

$   (36,034)$   (6,130)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization

3,8564,149Stock-based compensation

4,8023,744Other non-cash transactions

309(235)Changes in operating assets and liabilities:Accounts receivable


(4,446)(2,232)Other assets

(1,199)(883)Accounts payable

(2,895)1,748Accrued compensation

(1,572)(4,348)Accrued expenses

1,9611,354Accrued clinical trial expenses

1,505(552)Deferred revenue

(2,555)(26,568)Other liabilities

(1,544)(1,302)Net cash used in operating activities

$   (14,870)$ (34,163)Cash flows from investing activities:Purchases of investments

(372,723)(115,277)Maturities of investments

113,235112,074Sales of investments

61,3688,197Purchases of property and equipment

(3,765)(3,973)Net cash (used in) provided by investing activities

$ (201,885)$
,021Cash flows from financing activities:Payments of loan and capital lease obligations

(459)(359)Issuance of common stock, net of issuance costs

221,9584,776Net cash provided by financing activities

$  221,499$
4,417Effect of exchange rates on cash and cash equivalents

(14)(300)Net increase (decrease) in cash and cash equivalents

4,730$ (29,025)Cash and cash equivalents at beginning of period

17,75549,597Cash and cash equivalents at end of period

22,485$  20,572

SOURCE Nektar Therapeutics
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