Nektar Therapeutics (NASDAQ:NKTR) Q2 2020 Earnings Conference Call August 6, 2020 5:00 PM ET Company Participants Jennifer Ruddock - Senior Vice President, Strategy and Corporate Affairs Howard Robin - President and Chief Executive Officer Gil Labrucherie - Chief Operating Officer and Chief Financial Officer Jonathan Zalevsky - Chief, Research and Development Wei Lin - Head, Development Conference Call Participants Peter Lawson - Barclays Tyler Van Buren - Piper Sandler Chris Shibutani - Cowen Alex Lim - Mi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________________________________________________ FORM 10-Q _______________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Comm ...

Nektar Therapeutics (NASDAQ:NKTR) Q1 2020 Earnings Conference Call May 7, 2020 5:00 PM ET Company Participants Jennifer Ruddock - SVP, Strategy & Corporate Affairs Howard Robin - President & CEO Wei Lin - SVP & Head of Development Jonathan Zalevsky - Chief R&D Officer Gil Labrucherie - COO & CFO Conference Call Participants Peter Lawson - Barclays Tyler Van Buren - Piper Sandler Chris Shibutani - Cowen Difei Yang - Mizuho Bert Hazlett - BTIG George Farmer - BMO Capital Markets Arlinda Lee - Canaccord Aydin ...

[PART I: FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%3A%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements — Unaudited](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%E2%80%94%20Unaudited) This section presents Nektar Therapeutics' unaudited condensed consolidated financial statements for Q1 2020 versus Q1 2019, reflecting key financial performance and position [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets and stockholders' equity, alongside a slight increase in total liabilities, reflecting the period's financial activity Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $1,429,324 | $1,421,894 | | **Total assets** | **$1,887,933** | **$1,977,356** | | **Total current liabilities** | $377,471 | $354,661 | | **Total liabilities** | **$591,507** | **$571,965** | | **Total stockholders' equity** | **$1,296,426** | **$1,405,391** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show a significant increase in total revenue but a widened net loss, primarily driven by an impairment charge for a terminated program Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three months ended March 31, 2020 | Three months ended March 31, 2019 | | :--- | :--- | :--- | | **Total revenue** | **$50,573** | **$28,222** | | License, collaboration and other revenue | $27,515 | $4,204 | | Total operating costs and expenses | $184,204 | $148,909 | | Research and development | $108,987 | $118,463 | | Impairment of assets and other costs | $45,189 | $— | | **Loss from operations** | **($133,631)** | **($120,687)** | | **Net loss** | **($138,651)** | **($119,632)** | | **Basic and diluted net loss per share** | **($0.78)** | **($0.69)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved slightly, while investing activities provided significant cash, leading to an overall increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | | Three months ended March 31, 2020 | Three months ended March 31, 2019 | | :--- | :--- | :--- | | **Net cash used in operating activities** | **($78,075)** | **($80,895)** | | **Net cash provided by (used in) investing activities** | **$197,767** | **($12,138)** | | **Net cash provided by financing activities** | **$11,077** | **$4,894** | | Net increase (decrease) in cash and cash equivalents | $130,672 | ($88,153) | | **Cash and cash equivalents at end of period** | **$227,035** | **$106,752** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, significant events like the NKTR-181 program termination and related impairment, and key collaboration revenue, alongside other financial disclosures - The company is a research-based biopharmaceutical firm focused on developing treatments for cancer and autoimmune diseases, expecting to continue incurring **substantial losses** and **negative cash flows** due to significant R&D investment[23](index=23&type=chunk)[24](index=24&type=chunk) - Following a negative FDA advisory committee recommendation for NKTR-181, the company withdrew its NDA and terminated the program, resulting in a Q1 2020 charge of **$45.2 million**, comprising a **$19.7 million** write-off of advance payments and **$25.5 million** in other costs[55](index=55&type=chunk)[56](index=56&type=chunk) - In Q1 2020, the company recognized a **$25.0 million** milestone payment from its collaboration with Bristol-Myers Squibb (BMS) for bempegaldesleukin, following the first patient visit in a registrational muscle-invasive bladder cancer trial[75](index=75&type=chunk)[82](index=82&type=chunk)[85](index=85&type=chunk) - On April 13, 2020, subsequent to the quarter's end, the company redeemed its 7.75% senior secured notes by repaying the entire principal of **$250.0 million** and accrued interest of **$4.8 million**[107](index=107&type=chunk)[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic pipeline focus, program terminations, the impact of COVID-19 on clinical trials, and financial performance, including revenue growth and net loss, while affirming sufficient working capital Revenue Breakdown Q1 2020 vs Q1 2019 (in thousands) | Revenue Type | Q1 2020 | Q1 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Product sales | $3,444 | $4,398 | ($954) | (22)% | | Royalty revenue | $9,719 | $11,390 | ($1,671) | (15)% | | Non-cash royalty revenue | $9,895 | $8,230 | $1,665 | 20% | | License, collaboration & other | $27,515 | $4,204 | $23,311 | >100% | | **Total revenue** | **$50,573** | **$28,222** | **$22,351** | **79%** | - The increase in License, collaboration and other revenue was primarily due to the recognition of a **$25.0 million** milestone from the BMS Collaboration Agreement for the first patient visit in a registrational muscle invasive bladder cancer trial[151](index=151&type=chunk) - The company recorded an impairment charge of **$45.2 million** in Q1 2020 related to the termination of the NKTR-181 program, including a **$19.7 million** write-off of advance payments and **$25.5 million** for non-cancellable commitments and severance[166](index=166&type=chunk)[167](index=167&type=chunk) - The COVID-19 pandemic is expected to delay clinical trial timelines, with partner-led studies projected to be delayed by **three to six months** and earlier-stage Nektar-run studies by approximately **three months**[135](index=135&type=chunk)[136](index=136&type=chunk)[162](index=162&type=chunk) - As of March 31, 2020, the company had approximately **$1.5 billion** in cash and investments, and subsequently repaid **$254.8 million** in senior notes, with management believing it has sufficient working capital for at least the **next 12 months**[143](index=143&type=chunk)[175](index=175&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's market risks since the prior annual report - Market risks as of March 31, 2020, have **not materially changed** from those reported in the 2019 Form 10-K[278](index=278&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting despite the transition to remote work - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[280](index=280&type=chunk) - **No material changes** to internal control over financial reporting occurred in Q1 2020, and adjustments for remote work due to COVID-19 have **not materially impacted** these controls[281](index=281&type=chunk) [PART II: OTHER INFORMATION](index=53&type=section&id=PART%20II%3A%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including securities class action and shareholder derivative complaints, for which no loss can be reasonably estimated or recorded - The company and certain executives are named in **securities class action** and **shareholder derivative lawsuits** alleging misrepresentations about bempegaldesleukin's efficacy, safety, and clinical trial plans[70](index=70&type=chunk)[261](index=261&type=chunk) - All legal cases are in early stages, and the company **cannot reasonably estimate** a potential future loss or range of losses, with **no liability** recorded as of March 31, 2020[70](index=70&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section outlines material risks, including dependency on lead drug candidate success, drug development uncertainty, COVID-19 impacts, manufacturing challenges, capital requirements, and competition - The company's future success is **highly dependent** on the successful development, regulatory approval, and commercialization of its lead immuno-oncology candidate, bempegaldesleukin[190](index=190&type=chunk) - The business could be **adversely affected** by health epidemics, particularly the COVID-19 pandemic, which may **disrupt clinical trials, manufacturing, and the supply chain**, and could delay patient enrollment and regulatory interactions[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - The company faces **risks related to manufacturing**, including the ability of its contract manufacturers to produce sufficient quantities and reliance on **single-source suppliers** for critical raw materials[211](index=211&type=chunk)[213](index=213&type=chunk) - The company has **substantial future capital requirements** and may **not have access to sufficient capital**, with future funding depending on achieving milestones, royalties, or new high-value collaborations[219](index=219&type=chunk)[222](index=222&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or share repurchases during the quarter - There were **no unregistered sales** of equity securities or share repurchases in the three months ended March 31, 2020[287](index=287&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - **No defaults** upon senior securities occurred[288](index=288&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - **No information** was reported under this item[290](index=290&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and required certifications - **Lists exhibits** filed with the report, including corporate governance documents and **required SEC certifications**[292](index=292&type=chunk)[293](index=293&type=chunk)

Nektar Therapeutics (NASDAQ:NKTR) Q4 2019 Results Conference Call February 27, 2020 5:00 PM ET CompanyParticipants Jennifer Ruddock - Senior Vice President, Strategy and Corporate Affairs Howard Robin - President and Chief Executive Officer Dr. Wei Lin - Senior Vice President and Head of Development Dr. Jonathan Zalevsky - Chief Research and Development Officer Gil Labrucherie - Chief Operating Officer and Chief Financial Officer Conference Call Participants Chris Shibutani - Cowen Alexander Duncan - Piper ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ___________________________________________________________________________ Form 10-K ___________________________________________________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to ...

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