On March 1,2018 Nektar Therapeutics (Nasdaq: NKTR) reported its financial results for the fourth quarter and year ended December 31, 2017 (Press release, Nektar Therapeutics, MAR 1, 2018, View Source [SID1234524309]

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Cash and investments in marketable securities at December 31, 2017 were $353.2 million as compared to $389.1 million at December 31, 2016. This does not include $1.85 billion in upfront payments from the new Bristol-Myers Squibb collaboration, which was announced on February 14, 2018.

"This past year was truly transformational for Nektar as we achieved a number of successes with Nektar medicines across our three key therapeutic areas of immuno-oncology, immunology and pain," said Howard W. Robin, President and Chief Executive Officer of Nektar. "In the area of pain, we completed a successful Phase 3 program for NKTR-181 in over 2,100 patients and healthy volunteers that will comprise our NDA submission in the second quarter of this year. In immunology, we entered into a major partnership with Eli Lilly for NKTR-358, a potential first-in-class T regulatory resolution therapeutic, which will be developed to treat a broad range of auto-immune disorders. Finally, in immuno-oncology, the clinical success we achieved with NKTR-214 led to a groundbreaking collaboration with Bristol-Myers Squibb that now enables us to broadly and rapidly advance NKTR-214 into over 20 registrational trials in up to 15,000 patients."

Summary of Financial Results

Revenue for the fourth quarter of 2017 was $95.5 million as compared to $37.5 million in the fourth quarter of 2016. Revenue in the fourth quarter of 2017 included a total of $60.0 million of non-recurring revenue related to a new sublicense agreement, a contract settlement agreement and the recognition of deferred revenue from several collaboration agreements.

Revenue for the year ended December 31, 2017 was $307.7 million as compared to $165.4 million in 2016. Revenue in 2017 included recognition of $130.1 million of the $150.0 million upfront payment from Nektar’s collaboration with Eli Lilly & Company for the development and commercialization of NKTR-358.

Total operating costs and expenses in the fourth quarter of 2017 were $119.5 million as compared to $69.6 million in the fourth quarter of 2016. Total operating costs and expenses increased primarily as a result of higher research and development (R&D) expense. Total operating costs and expenses for the year ended December 31, 2017 were $367.4 million as compared to $278.3 million in 2016.

R&D expense in the fourth quarter of 2017 was $81.4 million as compared to $50.2 million for the fourth quarter of 2016. R&D expense for the year ended December 31, 2017 was $268.5 million as compared to $203.8 million in 2016. R&D expense was higher in 2017 as compared to 2016 primarily because of expenses for our pipeline programs, including the completion of Phase 3 clinical studies for NKTR-181, Phase 1/2 clinical studies of NKTR-214 and NKTR-358, and IND-enabling activities for NKTR-262 and NKTR-255.

General and administrative (G&A) expense was $12.3 million in the fourth quarter of 2017 as compared to $12.8 million in the fourth quarter of 2016. G&A expense for the year ended December 31, 2017 was $52.4 million as compared to $44.3 million in 2016.

Net loss for the fourth quarter of 2017 was $33.8 million or $0.21 loss per share as compared to a net loss of $42.2 million or $0.28 loss per share in the fourth quarter of 2016. Net loss for the year ended December 31, 2017 was $96.7 million or $0.62 loss per share as compared to a net loss of $153.5 million or $1.10 loss per share in 2016.

2017 and Year-to-Date Business Highlights

● In February 2018, Nektar and Bristol-Myers Squibb entered into a global development and commercialization agreement to evaluate the full potential of NKTR-214 plus Opdivo (nivolumab) in more than 20 indications in 9 tumor types including melanoma, renal cell carcinoma, non-small cell lung cancer, bladder and triple negative breast cancer. The first pivotal studies in melanoma and renal cell carcinoma are expected to be initiated in mid-2018.
● In December 2017, Nektar submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for NKTR-262, a small molecule agonist that targets toll-like receptors (TLRs) found on innate immune cells in the body. The REVEAL Phase 1/2 study will evaluate the safety, tolerability and anti-tumor effect of NKTR-262, administered in combination with NKTR-214 (doublet) and in combination with NKTR-214 and nivolumab (triplet), in patients with locally advanced or metastatic cancers. The company plans to enroll the first patients in the REVEAL study in March of 2018.
● In November 2017, Nektar announced positive data from the dose-escalation stage of the PIVOT-02 study of NKTR-214 in combination with Opdivo at the 2017 SITC (Free SITC Whitepaper) conference. Results showed compelling response rates and favorable safety data in both PD-L1 negative and PD-L1 positive patients with melanoma, renal cell carcinoma and non-small cell lung cancer.
● In September 2017, Nektar initiated the PROPEL clinical study to evaluate the efficacy and safety of NKTR-214 in combination with approved checkpoint inhibitors, TECENTRIQ(atezolizumab) and KEYTRUDA (pembrolizumab) in patients with bladder and non-small cell lung cancer. Data from the PROPEL study is expected in the second half of 2018.
● In July 2017, Nektar and Eli Lilly announced a strategic collaboration to develop and commercialize NKTR-358, a potential first-in-class resolution therapeutic, that addresses an underlying immune system imbalance in patients with auto-immune conditions. A Phase 1 singe-ascending dose study is underway and a Phase 1/2 multiple-ascending dose study of NKTR-358 in patients with lupus is planned to begin in the second quarter of 2018.
● In July 2017, Nektar announced positive results from a Human Abuse Potential (HAP) study of NKTR-181, a first-in-class opioid analgesic.
● In May 2017, Nektar announced a new research collaboration with Takeda to explore the combination of NKTR-214 with five oncology compounds from Takeda’s cancer portfolio including a SYK-inhibitor and a proteasome inhibitor.
● In March 2017, Nektar announced positive results from the SUMMIT-07 Phase 3 efficacy study of NKTR-181 in over 600 patients with chronic low back pain. The primary efficacy endpoint of the study demonstrated significantly improved chronic back pain relief with NKTR-181 compared to placebo (p=0.0019). Key secondary endpoints of the study also achieved high statistical significance. The study demonstrated that NKTR-181 had a favorable safety profile and was well tolerated.

The company also announced upcoming presentations at the following scientific congresses during the first half of 2018:

American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2018, Chicago, IL:

● Abstract 3755/Poster 5: "Comprehensive antitumor immune activation by a novel TLR7/8 targeting agent NKTR-262 combined with CD122-biased immunostimulatory cytokine NKTR-214", Kivimae, S., et al.
○ Session: Immunology: Immunomodulatory Agents and Interventions 1
○ Session Date and Time: Tuesday, April 17, 2018, 8:00 a.m. – 12:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 32
● Abstract 2755/Poster 17: "NKTR-262: Prodrug pharmacokinetics in mice, rats, and dogs", Lee, M., et al.
○ Session: Immunology: Immune Mechanisms Invoked by Therapies 1
○ Session Date and Time: Monday, April 16, 2018, 1:00 p.m. – 5:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 33
● Abstract 123/Poster 13: "Enhanced anti-tumor activity of the combination of entinostat and NKTR-214 in renal and colon cancer tumor models", Wang, L., et al.
○ Session: Tumor Biology: Role of the Innate Immune System in Tumorigenesis
○ Session Date and Time: Sunday, April 15, 2018, 1:00 p.m. – 5:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 5

● Abstract 3566/Poster 4: "Enhanced expansion and tumor targeting of adoptively transferred T cells with NKTR-214", Parisi, G., et al.
○ Session: Clinical Research: Adoptive Cell Therapy 3
○ Session Date and Time: Tuesday, April 17, 2018, 8:00 a.m. – 12:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 24

Antigen-Specific Immune Tolerance Drug Development Summit 2018, Boston, MA:

● Preclinical Data Presentation: "NKTR-358: A Selective Regulatory T Cell Inducing Agent for the Treatment of Autoimmune and Inflammatory Diseases"
○ Presenter: Jonathan Zalevsky, Ph.D., Nektar Therapeutics
○ Date and Time: Wednesday, April 25, 2018, 4:20 p.m. Eastern Time

American Academy of Pain Medicine 34th Annual Meeting, Vancouver, BC:

● Poster: "Efficacy, safety, and tolerability of NKTR-181 in patients with moderate to severe chronic low-back pain: A Phase 3 study"
○ Presenter: John Markman, M.D., University of Rochester Medical Center
○ Session: Poster Session 2
○ Date and Time: Friday, April 27, 2018, 6:00 p.m. Pacific Time
● Poster: "Measuring withdrawal in a phase 3 study of a new analgesic, NKTR-181, in subjects with moderate-to-severe chronic low-back pain"
○ Presenter: Jack Henningfield, Ph.D., Pinney Associates
○ Session: Poster Session 2
○ Date: Friday, April 27, 2018, 6:00 p.m. Pacific Time

Treg Directed Therapy for Autoimmune Disorders Meeting, Boston, MA:

● Preclinical Data Presentation: "NKTR-358: An IL-2 Pathway Agonist that Selectively Expands and Activates Regulatory T cells for the Treatment of Allergy and Autoimmune Disease"
○ Presenter: Jonathan Zalevsky, Ph.D., Nektar Therapeutics
○ Session: Enhanced Treg-based therapy with the use of IL-2
○ Date and Time: Wednesday, May 23, 2018, 3:40 p.m. Eastern Time

3rd Annual Advances in Immuno-Oncology Congress, London, U.K.:

● Presentation: "Accessing The Potential Of An Immunotherapeutic Agent"
○ Presenter: Jonathan Zalevsky, Ph.D., Nektar Therapeutics
○ Session: Translational Immuno-Oncology
○ Date and Time: Thursday, May 24, 2018, 5:40 p.m. London Time

College on Problems of Drug Dependence 80th Annual Scientific Meeting, San Diego, CA:

● Oral Presentation: "Neuropharmacodynamic Profile of NKTR-181: Correlation to Low Abuse Potential"
○ Presenter: Laurie VanderVeen, Ph.D., Nektar Therapeutics
○ Session: Preclinical Opioid
○ Date and Time: Tuesday, June 12, 2018, 10:15 a.m. – 10:30 a.m. Pacific Time

● Oral Presentation: "Assessment of Drug Abuse-Related Events with MADDERS in SUMMIT-07: A Phase-3 Study of NKTR-181 in Patients With Moderate to Severe Chronic Low-Back Pain"

○ Presenter: Ryan K. Lanier, Ph.D., Analgesic Solutions
○ Session: Pain
○ Date and Time: Wednesday, June 13, 2018, 1:30 p.m. – 1:45 p.m. Pacific Time

Conference Call to Discuss Fourth Quarter and Year-End 2017 Financial Results
Nektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time today, Thursday, March 1, 2018.

This press release and a live audio-only Webcast of the conference call can be accessed through a link that is posted on the home page and Investors section of the Nektar website: View Source The web broadcast of the conference call will be available for replay through Monday, April 2, 2018.

To access the conference call, follow these instructions:

Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 6299239 (Nektar Therapeutics is the host)

In the event that any non-GAAP financial measure is discussed on the conference call that is not described in the press release, or explained on the conference call, related information will be made available on the Investors page at the Nektar website as soon as practical after the conclusion of the conference call..

Cash and investments in marketable securities at December 31, 2017 were $353.2 million as compared to $389.1 million at December 31, 2016. This does not include $1.85 billion in upfront payments from the new Bristol-Myers Squibb collaboration, which was announced on February 14, 2018.

"This past year was truly transformational for Nektar as we achieved a number of successes with Nektar medicines across our three key therapeutic areas of immuno-oncology, immunology and pain," said Howard W. Robin, President and Chief Executive Officer of Nektar. "In the area of pain, we completed a successful Phase 3 program for NKTR-181 in over 2,100 patients and healthy volunteers that will comprise our NDA submission in the second quarter of this year. In immunology, we entered into a major partnership with Eli Lilly for NKTR-358, a potential first-in-class T regulatory resolution therapeutic, which will be developed to treat a broad range of auto-immune disorders. Finally, in immuno-oncology, the clinical success we achieved with NKTR-214 led to a groundbreaking collaboration with Bristol-Myers Squibb that now enables us to broadly and rapidly advance NKTR-214 into over 20 registrational trials in up to 15,000 patients."

Summary of Financial Results

Revenue for the fourth quarter of 2017 was $95.5 million as compared to $37.5 million in the fourth quarter of 2016. Revenue in the fourth quarter of 2017 included a total of $60.0 million of non-recurring revenue related to a new sublicense agreement, a contract settlement agreement and the recognition of deferred revenue from several collaboration agreements.

Revenue for the year ended December 31, 2017 was $307.7 million as compared to $165.4 million in 2016. Revenue in 2017 included recognition of $130.1 million of the $150.0 million upfront payment from Nektar’s collaboration with Eli Lilly & Company for the development and commercialization of NKTR-358.

Total operating costs and expenses in the fourth quarter of 2017 were $119.5 million as compared to $69.6 million in the fourth quarter of 2016. Total operating costs and expenses increased primarily as a result of higher research and development (R&D) expense. Total operating costs and expenses for the year ended December 31, 2017 were $367.4 million as compared to $278.3 million in 2016.

R&D expense in the fourth quarter of 2017 was $81.4 million as compared to $50.2 million for the fourth quarter of 2016. R&D expense for the year ended December 31, 2017 was $268.5 million as compared to $203.8 million in 2016. R&D expense was higher in 2017 as compared to 2016 primarily because of expenses for our pipeline programs, including the completion of Phase 3 clinical studies for NKTR-181, Phase 1/2 clinical studies of NKTR-214 and NKTR-358, and IND-enabling activities for NKTR-262 and NKTR-255.

General and administrative (G&A) expense was $12.3 million in the fourth quarter of 2017 as compared to $12.8 million in the fourth quarter of 2016. G&A expense for the year ended December 31, 2017 was $52.4 million as compared to $44.3 million in 2016.

Net loss for the fourth quarter of 2017 was $33.8 million or $0.21 loss per share as compared to a net loss of $42.2 million or $0.28 loss per share in the fourth quarter of 2016. Net loss for the year ended December 31, 2017 was $96.7 million or $0.62 loss per share as compared to a net loss of $153.5 million or $1.10 loss per share in 2016.

2017 and Year-to-Date Business Highlights

● In February 2018, Nektar and Bristol-Myers Squibb entered into a global development and commercialization agreement to evaluate the full potential of NKTR-214 plus Opdivo (nivolumab) in more than 20 indications in 9 tumor types including melanoma, renal cell carcinoma, non-small cell lung cancer, bladder and triple negative breast cancer. The first pivotal studies in melanoma and renal cell carcinoma are expected to be initiated in mid-2018.
● In December 2017, Nektar submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for NKTR-262, a small molecule agonist that targets toll-like receptors (TLRs) found on innate immune cells in the body. The REVEAL Phase 1/2 study will evaluate the safety, tolerability and anti-tumor effect of NKTR-262, administered in combination with NKTR-214 (doublet) and in combination with NKTR-214 and nivolumab (triplet), in patients with locally advanced or metastatic cancers. The company plans to enroll the first patients in the REVEAL study in March of 2018.
● In November 2017, Nektar announced positive data from the dose-escalation stage of the PIVOT-02 study of NKTR-214 in combination with Opdivo at the 2017 SITC (Free SITC Whitepaper) conference. Results showed compelling response rates and favorable safety data in both PD-L1 negative and PD-L1 positive patients with melanoma, renal cell carcinoma and non-small cell lung cancer.
● In September 2017, Nektar initiated the PROPEL clinical study to evaluate the efficacy and safety of NKTR-214 in combination with approved checkpoint inhibitors, TECENTRIQ(atezolizumab) and KEYTRUDA (pembrolizumab) in patients with bladder and non-small cell lung cancer. Data from the PROPEL study is expected in the second half of 2018.
● In July 2017, Nektar and Eli Lilly announced a strategic collaboration to develop and commercialize NKTR-358, a potential first-in-class resolution therapeutic, that addresses an underlying immune system imbalance in patients with auto-immune conditions. A Phase 1 singe-ascending dose study is underway and a Phase 1/2 multiple-ascending dose study of NKTR-358 in patients with lupus is planned to begin in the second quarter of 2018.
● In July 2017, Nektar announced positive results from a Human Abuse Potential (HAP) study of NKTR-181, a first-in-class opioid analgesic.
● In May 2017, Nektar announced a new research collaboration with Takeda to explore the combination of NKTR-214 with five oncology compounds from Takeda’s cancer portfolio including a SYK-inhibitor and a proteasome inhibitor.
● In March 2017, Nektar announced positive results from the SUMMIT-07 Phase 3 efficacy study of NKTR-181 in over 600 patients with chronic low back pain. The primary efficacy endpoint of the study demonstrated significantly improved chronic back pain relief with NKTR-181 compared to placebo (p=0.0019). Key secondary endpoints of the study also achieved high statistical significance. The study demonstrated that NKTR-181 had a favorable safety profile and was well tolerated.

The company also announced upcoming presentations at the following scientific congresses during the first half of 2018:

American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2018, Chicago, IL:

● Abstract 3755/Poster 5: "Comprehensive antitumor immune activation by a novel TLR7/8 targeting agent NKTR-262 combined with CD122-biased immunostimulatory cytokine NKTR-214", Kivimae, S., et al.
○ Session: Immunology: Immunomodulatory Agents and Interventions 1
○ Session Date and Time: Tuesday, April 17, 2018, 8:00 a.m. – 12:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 32
● Abstract 2755/Poster 17: "NKTR-262: Prodrug pharmacokinetics in mice, rats, and dogs", Lee, M., et al.
○ Session: Immunology: Immune Mechanisms Invoked by Therapies 1
○ Session Date and Time: Monday, April 16, 2018, 1:00 p.m. – 5:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 33
● Abstract 123/Poster 13: "Enhanced anti-tumor activity of the combination of entinostat and NKTR-214 in renal and colon cancer tumor models", Wang, L., et al.
○ Session: Tumor Biology: Role of the Innate Immune System in Tumorigenesis
○ Session Date and Time: Sunday, April 15, 2018, 1:00 p.m. – 5:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 5

● Abstract 3566/Poster 4: "Enhanced expansion and tumor targeting of adoptively transferred T cells with NKTR-214", Parisi, G., et al.
○ Session: Clinical Research: Adoptive Cell Therapy 3
○ Session Date and Time: Tuesday, April 17, 2018, 8:00 a.m. – 12:00 p.m. Central Time
○ Location: McCormick Place South, Exhibit Hall A, Poster Section 24

Antigen-Specific Immune Tolerance Drug Development Summit 2018, Boston, MA:

● Preclinical Data Presentation: "NKTR-358: A Selective Regulatory T Cell Inducing Agent for the Treatment of Autoimmune and Inflammatory Diseases"
○ Presenter: Jonathan Zalevsky, Ph.D., Nektar Therapeutics
○ Date and Time: Wednesday, April 25, 2018, 4:20 p.m. Eastern Time

American Academy of Pain Medicine 34th Annual Meeting, Vancouver, BC:

● Poster: "Efficacy, safety, and tolerability of NKTR-181 in patients with moderate to severe chronic low-back pain: A Phase 3 study"
○ Presenter: John Markman, M.D., University of Rochester Medical Center
○ Session: Poster Session 2
○ Date and Time: Friday, April 27, 2018, 6:00 p.m. Pacific Time
● Poster: "Measuring withdrawal in a phase 3 study of a new analgesic, NKTR-181, in subjects with moderate-to-severe chronic low-back pain"
○ Presenter: Jack Henningfield, Ph.D., Pinney Associates
○ Session: Poster Session 2
○ Date: Friday, April 27, 2018, 6:00 p.m. Pacific Time

Treg Directed Therapy for Autoimmune Disorders Meeting, Boston, MA:

● Preclinical Data Presentation: "NKTR-358: An IL-2 Pathway Agonist that Selectively Expands and Activates Regulatory T cells for the Treatment of Allergy and Autoimmune Disease"
○ Presenter: Jonathan Zalevsky, Ph.D., Nektar Therapeutics
○ Session: Enhanced Treg-based therapy with the use of IL-2
○ Date and Time: Wednesday, May 23, 2018, 3:40 p.m. Eastern Time

3rd Annual Advances in Immuno-Oncology Congress, London, U.K.:

● Presentation: "Accessing The Potential Of An Immunotherapeutic Agent"
○ Presenter: Jonathan Zalevsky, Ph.D., Nektar Therapeutics
○ Session: Translational Immuno-Oncology
○ Date and Time: Thursday, May 24, 2018, 5:40 p.m. London Time

College on Problems of Drug Dependence 80th Annual Scientific Meeting, San Diego, CA:

● Oral Presentation: "Neuropharmacodynamic Profile of NKTR-181: Correlation to Low Abuse Potential"
○ Presenter: Laurie VanderVeen, Ph.D., Nektar Therapeutics
○ Session: Preclinical Opioid
○ Date and Time: Tuesday, June 12, 2018, 10:15 a.m. – 10:30 a.m. Pacific Time

● Oral Presentation: "Assessment of Drug Abuse-Related Events with MADDERS in SUMMIT-07: A Phase-3 Study of NKTR-181 in Patients With Moderate to Severe Chronic Low-Back Pain"

○ Presenter: Ryan K. Lanier, Ph.D., Analgesic Solutions
○ Session: Pain
○ Date and Time: Wednesday, June 13, 2018, 1:30 p.m. – 1:45 p.m. Pacific Time

Conference Call to Discuss Fourth Quarter and Year-End 2017 Financial Results
Nektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time today, Thursday, March 1, 2018.

This press release and a live audio-only Webcast of the conference call can be accessed through a link that is posted on the home page and Investors section of the Nektar website: View Source The web broadcast of the conference call will be available for replay through Monday, April 2, 2018.

To access the conference call, follow these instructions:

Dial: (877) 881.2183 (U.S.); (970) 315.0453 (international)
Passcode: 6299239 (Nektar Therapeutics is the host)

In the event that any non-GAAP financial measure is discussed on the conference call that is not described in the press release, or explained on the conference call, related information will be made available on the Investors page at the Nektar website as soon as practical after the conclusion of the conference call.