Nektar Therapeutics (NKTR - Free Report) reported a loss of 32 cents per share in the third quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 34 cents. The reported loss was, however, significantly wider than the year-ago loss of 6 cents. The company’s shares are up 8% following the release of its third-quarter results.
Meanwhile, quarterly revenues tumbled 40% to $36.3 million from the year-ago quarter. The decrease was mainly due to a $40 million milestone payment received from AstraZeneca plc related to the EU launch of Movantik in the third quarter of 2015. However, revenues surpassed the Zacks Consensus Estimate of $30 million.
Quarter in Detail
The top line comprised product sales, royalty revenues, non-cash royalty revenues, license, collaboration and other revenues.
Product sales surged 103% to almost $14.7 million primarily due to higher sales to Ophthotech Corp. (OPHT - Free Report) under an exclusive manufacturing agreement to supply their ongoing Fovista studies as well as validation batches for their commercial readiness activities. Non-cash royalty revenues were up 27.1% to $7.7 million.
The company reported royalty revenues of $5.6 million in the third quarter of 2016 compared to the year-ago quarter figure of $0.2 million. License, collaboration and other revenues came in at $8.4 million compared to $46.5 million a year ago.
Research and development (R&D) expenses were up 20.4% to $52 million, primarily due to investments in pipeline including candidates like NKTR-181 and NKTR-214, and preparations for advancing NKTR-358 into the clinic in the first quarter of 2017.
General and administrative (G&A) expenses were up 8.4% to $10.3 million.
Nektar expects a decision from the European Medicines Agency’s Committee for Medicinal Products for Human Use for Onzeald for the treatment of advanced breast cancer with a history of brain metastases by the end of first quarter 2017. The company is looking to get the candidate approved for the treatment of patients with advanced breast cancer and brain metastases.
Upon the first sale of Onzeald in Europe, Nektar will receive a milestone payment of $10 million and will be eligible to receive 20% royalties on all European sales of Onzeald from Daiichi Sankyo.
In the third quarter, Nektar inked a clinical collaboration with Bristol-Myers Squibb Company (BMY - Free Report) to evaluate combination regimens of NKTR-214 with the latter’s anti-PD-1 antibody, Opdivo in five tumor types and at least seven indications.
Nektar has reiterated its financial guidance for 2016. The company continues to expect total revenue in the range of $160–$165 million. The company has also maintained R&D and G&A guidance. It still expects R&D expenditure in the range of $200 to $210 million and G&A expenses in the range of $40 million to $42 million in 2016.
Zacks Rank & Key Picks
Nektar currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Anika Therapeutics Inc. (ANIK - Free Report) , which sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 33.14%. Its share price has increased 16% year to date.
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