Nektar (NKTR) Q1 Earnings & Revenues Beat, Decline Y/Y

Nektar Therapeutics (NASDAQ:NKTR) reported a loss of 68 cents per share for the first quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 71 cents. The company had recorded a loss of 21 cents per share in the year-ago period.

Quarterly revenues were $28.2 million compared with the year-ago figure of $38 million. The unfavorable year-over-year comparison was attributable to a payment of $10 million received from Takeda (NYSE:TAK) upon approval of Adynovi in Europe in the first quarter of 2018. Adynovi has been developed using Nektar’s proprietary technology, Captisol. The top line, however, beat the Zacks Consensus Estimate of $25.45 million.

Nektar’s shares gained 1.1% in pre-market trading on May 9 following the earnings release. The stock has declined 0.7% so far this year against the industry’s rally of 8.2%.

Quarter in Detail

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

In the first quarter, product sales declined 30.1% to $4.4 million from the year-ago period. Meanwhile, non-cash royalty revenues increased 20.8% to $8.2 million.

Nektar reported royalty revenues of $11.4 million in the quarter, registering an improvement of 2.8% from the year-ago quarter.

License, collaboration and other revenues came in at $4.2 million compared with $13.7 million in the prior year.

Research and development (R&D) expenses escalated 19.2% to $118.5 million, primarily due to investments in pipeline, including candidates bempegaldesleukin (earlier NKTR-214), NKTR-358 and NKTR-255.

General and administrative (G&A) expenses were up 33.7% to $25 million in the reported quarter primarily due to costs related to commercialization initiatives to support launch of NKTR-181 upon potential approval and higher stock-based compensation expenses. A new drug application seeking approval for NKTR-181 as a treatment for chronic pain is under review in the United States. A decision is expected in August 2019.

Pipeline Update

Nektar is developing several candidates across important therapeutic areas including Onzeald in breast cancer and NKTR-255 in virology indications. The company is also developing several immuno-oncology candidates, with bempegaldesleukin being its primary candidate. The company also has several collaborations with large pharma companies, including Gilead Sciences (NASDAQ:GILD) , Bristol-Myers (NYSE:BMY) and Lilly to develop its pipeline candidates in combination with their drugs.

Nektar and its partner Lilly expect to initiate phase Ib studies to evaluate NKTR-358 in several auto-immune disorders later this year. Currently, a multiple-ascending dose study is evaluating the candidate in lupus patients.

Nektar and Bristol-Myers are evaluating bempegaldesleukin plus Bristol-Myers’ PD-L1 inhibitor Opdivo (nivolumab) in a phase III study – PIVOT-09 – and a registrational study – PIVOT-10 – for treating renal cell carcinoma and urothelial carcinoma, respectively. Under the PIVOT program, the companies are also developing the combination therapy for first-line metastatic melanoma, renal cell carcinoma and bladder cancers and second-line non-small cell lung cancer. The program will also develop a triplet combination of bempegaldesleukin, Opdivo and Yervoy (ipilimumab).

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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