Nektar Therapeutics Repurchases $100 Million of Convertible Debt and Reports Third Quarter 2008 Financi...(rating costs and expenses: Cost of ...),Health

Cost of goods sold 5,349 27,457 18,020 123,469

Cost of idle Exubera

manufacturing capacity 6,821

Research and development 38,265 35,773 109,138 114,265

General and administrative 12,149 12,426 36,951 42,339

Amortization of other

intangible assets 237 237 710 710

Total operating costs and

expenses 56,000 75,893 171,640 280,783

Loss from operations (34,561) (19,572) (109,808) (73,529)

Non-operating income (expense):

Interest income 2,375 5,519 10,578 16,444

Interest expense (3,988) (4,773) (11,835) (14,408)

Loss on equity investment (705) - (705) -

Other income (expense), net 117 206 1,188 189

Total non-operating income

(expense) (2,201) 952 (774) 2,225

Loss before provision for income

taxes (36,762) (18,620) (110,582) (71,304)

Provision for income taxes 276 - 536 500

Net loss $(37,038) $(18,620) $(111,118) $(71,804)

Basic and diluted net loss per

share $(0.40) $(0.20) $(1.20) $(0.78)

Shares used in computing basic

and diluted net loss per share 92,415 92,028 92,408 91,764

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

September 30, December 31,

2008 2007

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