On February 28, 2019 Nektar Therapeutics (Nasdaq: NKTR) reported financial results for the fourth quarter and full year ended December 31, 2018 (Press release, Nektar Therapeutics, FEB 28, 2019, View Source [SID1234533843]).

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Cash and investments in marketable securities at December 31, 2018 were $1.9 billion as compared to $353.2 million at December 31, 2017.

"2018 was a remarkable year for Nektar accentuated by new collaborations with leading pharmaceutical companies that validate the depth and innovation of our pipeline," said Howard W. Robin, President and Chief Executive Officer of Nektar. "We entered 2019 in an exceptionally strong financial position. We are working closely with the FDA during the ongoing review of our NDA for NKTR-181 while simultaneously preparing for a potential commercial launch later this year. We continue to design and execute on our broad registrational program for NKTR-214 (bempegaldesleukin1) with our partner Bristol-Myers Squibb. NKTR-358 is advancing in the ongoing clinical study in lupus patients and two new studies in additional auto-immune conditions are planned to start in 2019.NKTR-262, our TLR agonist is being evaluated in a Phase 1/2 study and finally, NKTR-255, our next I-O candidate is slated to move into the clinic first in patients with multiple myeloma and then in combination with CAR-T therapy."

Summary of Financial Results

Revenue for the fourth quarter of 2018 was $39.8 million as compared to $95.5 million in the fourth quarter of 2017. 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, 2018 was $1.2 billion as compared to $307.7 million in 2017 and included the recognition of $1.06 billion of license revenue from the Bristol-Myers Squibb collaboration agreement.

Total operating costs and expenses in the fourth quarter of 2018 were $140.1 million as compared to $119.5 million in the fourth quarter of 2017. Total operating costs and expenses for 2018 were $505.4 million as compared to $367.4 million in 2017. Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.

R&D expense in the fourth quarter of 2018 was $108.9 million as compared to $81.4 million for the fourth quarter of 2017. R&D expense for the year ended December 31, 2018 was $399.5 million as compared to $268.5 million in 2017. R&D expense was higher in the fourth quarter and full year 2018 as compared to the same periods in 2017 primarily because of expenses for our pipeline programs, including the continued development of bempegaldesleukin in Phase 2 and registrational studies and related manufacturing costs, costs related to the NKTR-181 New Drug Application and NKTR-181 pre-commercial manufacturing, Phase 1 clinical studies of NKTR-358, the Phase 1 study of NKTR-262 in combination with bempegaldesleukin and IND-enabling activities for NKTR-255.

General and administrative (G&A) expense was $23.8 million in the fourth quarter of 2018 as compared to $12.3 million in the fourth quarter of 2017. G&A expense for 2018 was $81.4 million as compared to $52.4 million in 2017. G&A expense was higher in the fourth quarter and full year 2018 as compared to the same periods in 2017 primarily due to an increase in non-cash stock-based compensation expense.

Net loss for the fourth quarter of 2018 was $98.2 million or $0.57 basic and diluted loss per share as compared to a net loss of $33.8 million or $0.21 basic and diluted loss per share in the fourth quarter of 2017. Net income for the year ended December 31, 2018 was $681.3 million or $3.78 diluted earnings per share as compared to a net loss of $96.7 million or $0.62 basic and diluted loss per share in 2017.

2018 and Year-to-Date Business Highlights

● In February 2019, Nektar presented clinical data from first-line Stage IV urothelial carcinoma patients enrolled in the PIVOT-02 study of bempegaldesleukin with nivolumab at the 2019 ASCO (Free ASCO Whitepaper) Genitourinary Cancers Symposium.
● In December 2018, Nektar and Gilead entered into a research collaboration to explore the potential of NKTR-255, an IL-15 agonist, in virology. The collaboration will evaluate NKTR-255 in combination with antiretroviral therapies in Gilead’s portfolio.
● In December 2018, Nektar and Bristol-Myers Squibb initiated PIVOT-10, a potential registrational study evaluating bempegaldesleukin with nivolumab in cisplatin-ineligible urothelial carcinoma patients whose tumors express PD-L1 (Combined Positive Score < 10).
● In December 2018, Nektar and Bristol-Myers Squibb initiated PIVOT-09, a Phase 3 study of bempegaldesleukin with nivolumab versus tyrosine kinase inhibitor (TKI) monotherapy in patients with advanced metastatic renal cell carcinoma.
● In November 2018, Nektar presented data for first-line Stage IV melanoma patients from the ongoing PIVOT-02 study at the 2018 Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting.
● In November 2018, Nektar entered into a new clinical collaboration with Pfizer Inc. to evaluate several combination regimens in multiple cancer settings including metastatic castration-resistant prostate cancer (mCRPC) and squamous cell carcinoma of the head and neck (SCCHN). Under the collaboration, Pfizer will initiate a Phase 1b/2 clinical trial to evaluate the anti-cancer activity of the combined agents, avelumab, talazoparib and bempegaldesleukin and separately avelumab, enzalutamide and bempegaldesleukin.
● In September 2018, Nektar and Bristol-Myers Squibb initiated the Phase 3 study of bempegaldesleukin with nivolumab as compared to nivolumab monotherapy in participants with previously untreated unresectable or metastatic melanoma.
● In July 2018, the U.S. Food and Drug Administration filed and accepted a New Drug Application (NDA) for NKTR-181, a first-in-class opioid analgesic, to treat chronic low back pain in adult patients new to opioid therapy. In February 2019, Nektar received notification from the FDA that the review period for NKTR-181 has been extended by three months. The new Prescription Drug User Fee Act (PDUFA) date is now August 29, 2019. The FDA extended the action date to allow time to review data from two additional preclinical studies that Nektar conducted which were requested by the FDA early on in our review process. The new preclinical data are supportive of the company’s abuse liability package included in the NDA filing for NKTR-181.
● In June 2018, Nektar presented data from the ongoing PIVOT study for bempegaldesleukin with nivolumab at the 2018 ASCO (Free ASCO Whitepaper) Meeting. Pre-specified efficacy criteria were achieved in three tumor types: first-line melanoma, first-line renal cell carcinoma and first-line urothelial cancer.
● In May 2018, Nektar began dosing patients with systemic lupus erythematosus in a new Phase 1b multiple ascending dose study of NKTR-358, an IL-2 regulatory T cell stimulator, designed to correct the underlying immune system dysfunction found in patients with immune disorders.
● In April 2018, Nektar announced a new clinical collaboration agreement with Takeda to evaluate bempegaldesleukin with TAK-659, a dual SYK and FLT-3 inhibitor in liquid and solid tumors. The first of these studies, a Phase 1b study in patients with Non-Hodgkin Lymphoma, was initiated in January of 2019.
● In April 2018, Nektar presented preclinical data for its immuno-oncology pipeline at the 2018 AACR (Free AACR Whitepaper) Annual Meeting. Preclinical data presented by Nektar researchers and collaborators demonstrated that bempegaldesleukin combines with multiple modalities including TLR agonism and adoptive cell therapy.
● In April 2018, Nektar began dosing patients in the REVEAL Phase 1/2 study, which will evaluate NKTR-262, Nektar’s wholly-owned novel toll-like receptor 7/8 agonist, in combination with bempegaldesleukin. The dose-escalation phase of the study is continuing.
● In February 2018, Nektar and Bristol-Myers Squibb entered into a global development and commercialization agreement to evaluate the full potential of bempegaldesleukin with nivolumab in more than 20 indications in 9 tumor types.

The company also announced upcoming presentations and speaking engagements at the following scientific congresses during the first half of 2019:

ASCO-SITC Clinical Immuno-Oncology Symposium, San Francisco, CA

● Oral presentation (Abstract #28): "Phase Ib: Preliminary clinical activity and immune activation for NKTR-262 (TLR 7/8 agonist) plus NKTR-214 (CD122-biased agonist) in patients (pts) with locally advanced or metastatic solid tumors (REVEAL Phase Ib/II Trial)"
o Presenter: Dr. Adi Diab, MD Anderson Cancer Center
o Session: Oral Abstract Session B
o Session Date & Time: March 1, 2019, 1:00 p.m.-2:15 p.m. Pacific Time
26th International Molecular Medicine Tri-Conference, San Francisco, CA

● Presentation Title: "Advanced Cytokine Engineering for Immunotherapy"
o Presenter: Steven Doberstein, Ph.D., Nektar Therapeutics
o Session: Emerging Immuno-Oncology Targets Session
o Session Date & Time: March 12, 2019, at 11:25 a.m. Pacific Time
Keystone Symposia Cancer Immunotherapy: Mechanistic Insights to Improve Clinical Benefit, Whistler, BC, Canada

● Presentation Title: "Intratumoral expansion of CD8+ T cells and depletion of Tregs after treatment with NKTR-214, a first-in-class, CD122-preferential IL-2 pathway agonist"
o Presenter: Willem Overwijk, Ph.D., Nektar Therapeutics
o Session: Immune Checkpoints: Basic Mechanisms and Novel Targets
o Session Date & Time: March 13, 2019, 8:00 a.m.-11:00 a.m. Pacific Time
CHI’s Fourth Annual Immuno-Oncology Summit Europe, London, UK

● Presentation Title: "Exploratory Studies up to IND with NKTR-255, a Memory T-Cell Stimulating Cytokine"
o Presenter: Saul Kivimae, Ph.D., Nektar Therapeutics
o Session: Importance of Cytokines/Innovative Approaches with Clinical Benefit
o Session Date and Time: March 19, 2019, at 16:45 Greenwich Mean Time
ICI-IO Combinations Summit, Boston, MA

● Presentation Title: "Supercharging the Tumor Microenvironment: Lessons from NKTR-214 and OPDIVO"
o Presenter: Willem Overwijk, Ph.D., Nektar Therapeutics
o Session Date and Time: March 20, 2019, at 11:30 a.m. Eastern Time
American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2019, Atlanta, GA

● Abstract 2256/Poster Board 15: "Combination of neoantigen DNA plasmid vaccine VB10.NEO and NKTR-214, a CD122-biased immunostimulatory cytokine, induces strong neoantigen-specific T cell responses and sustained tumor regression in pre-clinical models," Granum, S., et al.
o Session: Clinical Research – Combination Immunotherapies 1
o Session Date and Time: April 1, 2019, 1:00 p.m.-5:00 p.m. Eastern Time
o Location: Georgia World Congress Center, Exhibit Hall B, Poster Section 19

● Abstract 3210/Poster Board 20: "A potential immunotherapeutic approach for the treatment of osteosarcoma," Wahba, A., et al.
o Session: Immunology – Combination Immunotherapies 2
o Session Date & Time: Tuesday, April 2, 2019, 8:00 a.m.-12:00 p.m. Eastern Time
o Location: Georgia World Congress Center, Exhibit Hall B, Poster Section 2

● Abstract 3265/Poster Board 15: "NKTR-255, a polymer-conjugated IL-15 enhances anti-tumor NK cell responses and synergizes with monoclonal antibodies to provide long-term survival in human lymphoma model," Miyazaki, T., et al.
o Session: Immunology – Novel Immunomodulatory Agents
o Session Date and Time: April 2, 2019, 8:00 a.m.-12:00 p.m. Eastern Time
o Location: Georgia World Congress Center, Exhibit Hall B, Poster Section 25
15th Annual PEGS Boston Summit, Boston, MA

● Keynote: "Harnessing Potent Cytokine Agonist Pathways by Polymer Engineering to Develop Novel Immune Therapeutic Agents"
o Presenter: Loui Madakamutil, Ph.D., Nektar Therapeutics
o Session: Latest Developments in Agonist Immunotherapy – Cytokines and OX40 Targets
o Presentation Date and Time: Thursday, April 11, 2019 1:50 p.m. Eastern Time
6th Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Conference (ITOC6), Vienna, Austria

● Poster P2.12: "Mechanism of Action of NKTR-214, a first-in-class, CD122-preferential IL-2 pathway agonist"
o Presenter: Willem Overwijk, Ph.D., Nektar Therapeutics
o Session: Emerging Concepts/Novel Agents
o Session Dates and Times: April 11, 2019, at 18.20 Central European Time and April 12, 2019, from 14.00-14.30 Central European Time

Conference Call to Discuss Fourth Quarter and Year-End 2018 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, February 28, 2019. 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 Thursday, March 28, 2019.

To access the conference call, follow these instructions:

Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)
Passcode: 4988768 (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.