Nektar (NKTR) Q4 Earnings & Revenues Top Estimates, Stock Up

Nektar Therapeutics (NASDAQ:NKTR) reported a loss of 64 cents per share for the fourth quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 69 cents but wider than a loss of 57 cents per share incurred in the year-ago period.

Quarterly revenues were down 55% year over year to $33.9 million. However, revenues comfortably beat the Zacks Consensus Estimate of $26.3 million.

Nektar’s shares were up 1.1% in after-market trading on Feb 27, following the earnings release. However, the stock has declined 49.9% in the past year compared with the industry’s decrease of 10.7%.

Quarter in Detail

Nektar’s top line comprises product sales, royalty revenues, non-cash royalty revenues besides license, collaboration and other revenues.

In the fourth quarter, product sales increased 33.4% from the year-ago period to $5.8 million. Non-cash royalty revenues were down 2.8% to $8.7 million.

Nektar’s royalty revenues were up 1.1% year over year to $12.2 million in the quarter.

License, collaboration and other revenues came in at $7.1 million, registering a decline of 50.6% year over year.

Research and development expenses increased 1.4% to $110.4 million, primarily due to higher expense related to clinical development of bempegaldesleukin (earlier NKTR-214) and other pipeline candidates.

General and administrative expenses were up 14.2% to $27.1 million in the reported quarter.

Full-Year Results

Nektar reported total revenues of $114.6 million in 2019 compared with $1.19 billion in the year-ago period. The significant decrease was due to an upfront payment of $1.06 billion from Bristol-Myers (BMY) related to a collaboration agreement recorded in 2018. The company reported loss of $2.52 per share in 2019 against earnings of $3.78 in 2018.

Pipeline Update

Last month, Nektar announced that two FDA advisory committees did not give recommendation for approval to its chronic pain candidate, NKTR-181 or oxycodegol. Following the unfavorable decision, the company withdrew the new drug application seeking approval for the candidate and decided to stop further development of it. Although discontinuation of further development of oxycodegol is a setback for the company, it anticipates the move to help it generate cost savings in the range of $75-$125 million in 2020.

Nektar is developing several candidates across important therapeutic areas including Onzeald in breast cancer, NKTR-358 in inflammatory disease and NKTR-255 in virology and oncology indications. The company is also developing several immuno-oncology candidates, with bempegaldesleukin being its primary candidate.

The company is developing bempegaldesleukin in combination with Bristol-Myers’ (NYSE:BMY) PD-1 inhibitor, Opdivo, in several registrational studies, as a potential treatment for melanoma, urothelial cancer and renal cell carcinoma. Last month, the companies expanded the agreement to develop the combination regimen in additional indications namelyadjuvant melanoma setting and muscle invasive bladder cancer. Moreover, Bristol-Myers will initiate and fund an early-stage study to evaluate the regimen in non-small cell lung cancer patients in first-line setting.

Nektar also has collaboration agreements with Takeda and Pfizer (NYSE:PFE) to develop bempegaldesleukin in combination with their respective drugs targeting several cancer indications.

Nektar is evaluating NKTR-358 in partnership with Eli Lilly (NYSE:LLY) in three separate clinical studies in patients with lupus, psoriasis and atopic dermatitis.

In October 2019, the company initiated a phase I study to evaluate NKTR-255 as monotherapy in patients with relapsed, refractory non-Hodgkin lymphoma or multiple myeloma.

Zacks Rank

Nektar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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