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Nektar's (NKTR) Q1 Earnings and Revenues Top Estimates

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Nektar Therapeutics (NKTR - Free Report) reported an adjusted loss of 53 cents per share for the first quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 81 cents and the year-ago loss of 69 cents. Adjusted loss excludes a negative impact of 25 cents per share for impairment charges and additional costs related to the discontinuation of the NKTR-181 program.

Quarterly revenues were up 79.2% year over year to $50.6 million owing to the recognition of a milestone payment during the quarter. Revenues also beat the Zacks Consensus Estimate of $44.94 million.

Nektar’s shares have lost 7.9% so far this year compared with the industry’s decline of 10.9%.

Quarter in Detail

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

In the first quarter, product sales decreased 21.7% from the year-ago period to $3.4 million.  Non-cash royalty revenues were up 20.2% to $9.9 million.

Nektar’s royalty revenues decreased 14.7% year over year to $9.7 million in the quarter.

License, collaboration and other revenues were $27.5 million in the quarter compared with $4.2 million in the year-ago quarter.The increase was due to the recognition of a $25-million milestone payment from Bristol-Myers (BMY - Free Report) triggered by the initiation of the registrational study of Nektar’s bempegaldesleukin plus Bristol-Myers’ Opdivo in muscle-invasive bladder cancer.

Research and development expenses decreased 8% to $109 million. Notably, the company had recorded pre-commercial manufacturing costs for NKTR-181 in the year-ago quarter, which was not present in the reported quarter and led to the decline in expenses.The company discontinued the development of NKTR-181 in January.

General and administrative expenses rose 4.8% to $26.2 million in the reported quarter.

Pipeline Update

On the earnings call, the company stated that clinical studies in oncology conducted by the company have not experienced any significant delays. However, the company cautioned that uncertainties concerning COVID-19 may delay late-stage studies or enrollment of new patients into clinical studies in the future. Moreover, it expects a delay of approximately three months related to the previously anticipated timelines for certain earlier-stage studies, including the phase I/II PROPEL study evaluating bempegaldesleukin in combination with Merck’s (MRK - Free Report) Keytruda in patients with select advanced or metastatic solid tumors.

Meanwhile, the company expects a delay of three to six months in the anticipated timeline of its partner-sponsored clinical studies.

In January, 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 of the candidate and decided to stop further development of it. Although discontinuation of further development of oxycodegol is a setback for the company, Nektar anticipates the move to help it generate cost savings 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’ PD-1 inhibitor, Opdivo, in several registrational studies, as a potential treatment for melanoma, urothelial cancer and renal cell carcinoma. In January, the companies expanded the agreement to develop the combination regimen in additional indications, namely adjuvant 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 (PFE - Free Report) to develop bempegaldesleukin in combination with their respective drugs, targeting several cancer indications.

Nektar is evaluating NKTR-358 in partnership with Eli Lilly in three separate clinical studies in patients with lupus, psoriasis and atopic dermatitis. The company is evaluating NKTR-255 in a phase I study as monotherapy in patients with relapsed, refractory non-Hodgkin lymphoma or multiple myeloma.

Nektar Therapeutics Price, Consensus and EPS Surprise


Nektar Therapeutics Price, Consensus and EPS Surprise

Nektar Therapeutics price-consensus-eps-surprise-chart | Nektar Therapeutics Quote

Zacks Rank

Nektar currently has 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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