Nektar Therapeutics (NKTR -4.35%) didn't have a lot of good financial news the last time the company reported its quarterly results. In February, it announced that fourth-quarter revenue dropped 58% from the prior-year period and a wider net loss.
However, there are plenty of positives for Nektar outside of its financial numbers. But the numbers are still important. Nektar announced its Q1 results after the market closed on Wednesday. Here's what you need to know from the company's quarterly update.
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By the numbers
Nektar reported revenue in the first quarter of $28.2 million. This reflected a 26% decrease from the prior-year period revenue total of $38 million. The consensus Wall Street analysts' estimate projected Q1 revenue of $29.2 million.
On a GAAP basis, Nektar's net loss in the first quarter was $118.5 million, or $0.68 per share. The company's bottom line reflected deterioration from the prior-year period GAAP net loss of $95.8 million, or $0.60 per share. However, Nektar met the consensus analysts' Q1 earnings estimate.
Nektar ended the first quarter with cash, cash equivalents, and short-term investments of $1.8 billion. This was down from the $1.9 billion on hand as of Dec. 31, 2018.
Behind the numbers
Why did Nektar's revenue drop from the prior-year period in Q1? The primary reason for the decrease was the recognition of $10 million received from Takeda Pharmaceutical for the approval of hemophilia drug Adynovi in Europe.
The company's earnings were down this quarter because of the declining revenue coupled with an increase in operating expenses, primarily in research and development (R&D). R&D expenses in Q1 were $118.5 million, compared to the prior-year period of $99.4 million. The rise in R&D's expenses stemmed from increased expenses in the company's pipeline programs, including bempegaldesleukin in phase 2, NKTR-358 in phase 1, and activities for NKTR-255 to pave the way for clinical testing in the future.
There were several key highlights for Nektar this quarter, including:
- Positive preclinical data for immuno-oncology pipeline candidates bempegaldesleukin and NKTR-255.
- Presented clinical data for bempegaldesleukin in combination with Opdivo as a first-line Stage IV urothelial carcinoma treatment at the 2019 ASCO Genitourinary Cancers Symposium.
- Presented preliminary immune activation from the Reveal phase 1/2 study of NKTR-262 in combination with bempegaldesleukin at the 2019 ASCO-SITC meeting.
Looking ahead
One key thing for investors to look forward to with Nektar Therapeutics is the anticipated FDA approval of pain drug NKTR-181. If it's approved, the company plans to launch the drug later this year.
Nektar Therapeutics CEO Howard Robin said that the company is working with Bristol-Myers Squibb on a "broad joint development program for bempegaldesleukin in combination with nivolumab." These efforts include registrational trials in melanoma, RCC, urothelial, and non-small cell lung cancer that are already underway. Robin added that more trials should be initiated over the next few months.
