Nektar(US:NKTR)2025-08-07 21:59PART I: FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Presents unaudited condensed financial statements for Q2 and H1 2025, detailing net losses, asset changes, and corporate actions Condensed Consolidated Balance Sheets Provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at period end Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and investments | $175,903 | $269,095 | | Total current assets | $186,566 | $261,292 | | Total assets | $207,534 | $303,850 | | Liabilities & Equity | | | | Total liabilities | $231,745 | $243,113 | | Total stockholders' equity (deficit) | $(24,211) | $60,737 | Condensed Consolidated Statements of Operations Presents the company's financial performance, outlining revenues, expenses, and net loss over specified periods Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $11,175 | $23,489 | $21,635 | $45,128 | | Product sales | $0 | $6,640 | $0 | $12,674 | | Research and development | $29,886 | $29,724 | $60,366 | $57,132 | | Loss from operations | $(36,230) | $(49,774) | $(80,765) | $(85,201) | | Net loss | $(41,593) | $(52,363) | $(92,475) | $(89,165) | | Basic and diluted net loss per share | $(2.95) | $(3.76) | $(6.57) | $(6.63) | - Product sales and cost of goods sold were zero for the three and six months ended June 30, 2025, following the sale of the company's manufacturing facility in December 20242747 Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities for the reported periods Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(94,791) | $(85,590) | | Net cash provided by investing activities | $93,304 | $36,240 | | Net cash provided by financing activities | $218 | $42,022 | | Net decrease in cash and cash equivalents | $(1,264) | $(7,337) | Notes to Condensed Consolidated Financial Statements Provides detailed explanations of financial statements, covering corporate actions, pipeline focus, and ongoing litigation - A one-for-fifteen reverse stock split of the company's common stock was effective June 8, 2025, with all share and per-share figures retrospectively adjusted61100 - On July 2, 2025, the company completed an underwritten public offering, selling 4,893,618 shares of common stock at $23.50 per share, with net proceeds of approximately $107.5 million4546106 - The company is involved in a legal dispute with Eli Lilly and Company regarding a breach of contract, with a jury trial scheduled to start on October 27, 202594 - In December 2024, Nektar sold its Huntsville manufacturing facility to Gannet BioChem for $64.7 million in cash and an approximate 20% equity interest, recording a $6.8 million loss for the first six months of 2025 from this investment478488 - Restructuring and impairment charges for the six months ended June 30, 2025, were $0.6 million, a significant decrease from $14.3 million in the same period of 2024, which included an $8.3 million impairment charge on leased facilities122 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strategic focus on immunotherapy, financial performance, and capital sufficiency Strategic Direction of Our Business Outlines the company's strategic focus on immunotherapy and key clinical programs, including recent trial data - The company's strategic focus is on developing innovative medicines in immunotherapy, with key clinical-stage programs including rezpegaldesleukin (autoimmune diseases) and NKTR-255 (cancer), and preclinical program NKTR-0165 (autoimmune diseases)140 - On June 24, 2025, Nektar announced statistically significant positive data from the 16-week induction period of its Phase 2b REZOLVE-AD trial for rezpegaldesleukin in patients with moderate-to-severe atopic dermatitis, meeting its primary endpoint143144 - The FDA has granted Fast Track designation for rezpegaldesleukin for both moderate-to-severe atopic dermatitis and severe-to-very severe alopecia areata142 Results of Operations Analyzes key financial performance metrics, including revenue, research and development expenses, and net loss Comparison of Operating Results (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $21,635 | $45,128 | $(23,493) | (52)% | | Research and development | $60,366 | $57,132 | $3,234 | 6% | | General and administrative | $41,418 | $40,659 | $759 | 2% | | Restructuring and impairment | $616 | $14,264 | $(13,648) | (96)% | | Net loss | $(92,475) | $(89,165) | $(3,310) | 4% | - The decrease in total revenue is primarily due to the cessation of product sales following the sale of the manufacturing facility in December 2024160 - Research and development expenses are expected to increase for the full year 2025 compared to 2024, as the company commences activities to support a Phase 3 trial for rezpegaldesleukin163168 Liquidity and Capital Resources Discusses the company's cash position, capital raising, and ability to fund operations for the foreseeable future - As of June 30, 2025, the company had approximately $175.9 million in cash and investments in marketable securities181 - Subsequent to the quarter end, on July 2, 2025, the company raised approximately $107.5 million in net proceeds from an underwritten public offering182183 - Management estimates that the company has sufficient working capital to fund its current business plans for at least the next twelve months from the filing date183 - Net cash used in operating activities for the first six months of 2025 was $94.8 million, compared to $85.6 million for the same period in 2024189 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that its market risks as of June 30, 2025, have not materially changed from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the company's market risks since the disclosures in the 2024 Annual Report on Form 10-K196 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025 - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report198 - No changes occurred in the company's internal control over financial reporting during the second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, internal controls199 PART II: OTHER INFORMATION Item 1. Legal Proceedings This section refers to the disclosures in Note 5 of the financial statements, which detail the company's ongoing legal matters - The company incorporates by reference the information on legal matters from Note 5 of the financial statements, which details the ongoing litigation with Eli Lilly and Company20394 Item 1A. Risk Factors Provides a comprehensive overview of significant risks, including drug development, financial, operational, and legal - The company's future success is highly dependent on clinical success of its drug candidates, particularly rezpegaldesleukin, where failure in clinical development would significantly harm the business206 - Nektar has substantial future capital requirements and may not have access to sufficient capital, potentially needing new collaborations or additional capital to continue its current level of R&D investment223 - The company relies on contract manufacturing organizations (CMOs) for drug supply, including a dependency on Gannet BioChem for PEG reagents, posing risks to clinical trial timelines and commercial supply241 - The company is involved in legal proceedings with Eli Lilly, which could result in substantial litigation costs and liabilities, adversely affecting the business285287 Other Information (Items 2-6) This section covers miscellaneous required disclosures, including stock trading plans and equity sales - President and CEO Howard W. Robin entered into a pre-arranged stock trading plan on May 22, 2025, for the sale of up to 19,998 shares317 - Chief Research and Development Officer Jonathan Zalevsky entered into a pre-arranged stock trading plan on May 16, 2025, for the sale of up to 6,073 shares318 - There were no unregistered sales of equity securities or no issuer purchases of equity securities during the three months ended June 30, 2025314