Nektar Therapeutics (NKTR 4.41%) hasn't left a sweet taste in investors' mouths so far in 2019. The stock has dropped nearly 44% year to date, with most of this decline coming after the biotech reported manufacturing issues with two batches of experimental drug bempegaldesleukin (also referred to as bempeg).
But investors had reasons to like Nektar's third-quarter results, announced after the market closed on Wednesday. Here are the highlights of the company's Q3 update.
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By the numbers
Nektar reported revenue in the third quarter of $29.2 million. This reflected a 5% increase from the prior-year-period revenue total of $27.8 million. It also beat the consensus among Wall Street analysts for Q3 revenue of $26.4 million.
The company reported a net loss of $98.8 million, or $0.56 per share, based on generally accepted accounting principles (GAAP). This compared to a net loss of $96.1 million, or $0.56 per share, in the same period in 2018. Analysts were expecting a Q3 net loss of $0.73 per share.
Nektar ended the third quarter with cash, cash equivalents, and short-term investments of $1.7 billion. The biotech had $1.9 billion on hand as of Dec. 31, 2018.
Behind the numbers
The company's revenue growth in the third quarter stemmed mainly from a big jump in noncash royalty revenue related to the sale of future royalties. In addition, Nektar's product sales increased nearly 31% year over year to $5.6 million. These gains were partially offset by lower license, collaboration, and other revenue.
Nektar's bottom line worsened a bit despite this revenue increase due primarily to an uptick in spending. The company's total operating expenses rose 1.3% year over year to $128 million. Although Nektar's research and development costs were lower than in the prior-year period, the biotech's general and administrative costs increased as it prepared for the commercial launches of bempeg and NKTR-181.
In addition to its financial results, Nektar noted several other important recent developments, including:
- The presentation of clinical data from the phase 1/2 Pivot-02 study evaluating a combination of bempegaldesleukin and Bristol-Myers Squibb's (BMY -0.30%) Opdivo in treating breast cancer.
- Nektar partner Eli Lilly beginning a couple of phase 1b clinical studies evaluating NKTR-358 in treating psoriasis and atopic dermatitis.
- The announcement of the kickoff of a phase 1 clinical trial for NKTR-255 as a monotherapy in treating relapsed or refractory non-Hodgkin's lymphoma or multiple myeloma.
Looking ahead
The big question right now for Nektar is: What decision will the FDA make for NKTR-181? The agency was originally scheduled to make its approval decision for the opioid drug by Aug. 29 but missed that deadline.
Nektar CEO Howard Robin didn't mention anything about NKTR-181 in his comments in the company's Q3 press release. However, he did talk about bempeg. Robin said, "With our partner Bristol-Myers Squibb, we are conducting registrational trials evaluating the combination of bempegaldesleukin with nivolumab in melanoma, urothelial cancer, and renal cell carcinoma. We are also working collaboratively with BMS to finalize the next set of registrational studies."
The fortunes of biotech stocks hinge on clinical trial successes and regulatory approvals. Right now Nektar's future remains murky while it waits for clinical progress for bempeg and a potential FDA green light for NKTR-181.
