It's been a wild ride for shareholders of Nektar Therapeutics (NASDAQ:NKTR) so far in 2020. The stock got off to a great start, soaring more than 20%. But Nektar gave up all of those gains and then some after two U.S. Food and Drug Administration (FDA) advisory committees voted against recommending approval for experimental pain drug oxycodegol.

Nektar announced its fourth-quarter results after the market closed on Thursday. Investors seemed to have liked what they heard, with shares up around 6% in after-hours trading. Here are the highlights from Nektar's Q4 update.

Two gloved hands holding test tubes in each hand.

Image Source: Getty Images.

By the numbers

Nektar reported revenue in the fourth quarter of $33.9 million. Although this reflected a year-over-year decline of 15%, it topped the average analysts' Q4 revenue estimate of $26.93 million.

The company announced a Q4 net loss of $112.2 million, or $0.64 per share, based on generally accepted accounting principles (GAAP). This result was worse than Nektar's net loss of $98.2 million, or $0.57 per share, posted in the same quarter of 2018. However, Nektar beat the Wall Street consensus estimate of a net loss of $0.68 per share in the fourth quarter.

Nektar ended the fourth quarter with cash and investments in marketable securities of $1.6 billion. This wasn't too far below the company's cash stockpile of $1.9 billion as of Dec. 31, 2018.

Behind the numbers

The company received $12.2 million in royalties in Q4, its biggest source of revenue. This was a little higher than the $12.1 million in royalty revenue recorded in the prior-year period. Nektar also reported non-cash royalty revenue related to the sale of future royalties of $8.7 million, lower than the $8.9 million in the same quarter of 2018.

Nektar's license, collaboration, and other revenue totaled $7.1 million in Q4, less than half of the $14.4 million posted in the prior-year period. This was partially offset by an increase in product sales to $5.8 million from $4.4 million in Q4 of 2018.

The company reported total operating costs in Q4 of $143.5 million, only a little higher than the $140.1 million announced in the same quarter last year. This increase stemmed primarily from higher research and development costs and general and administrative expenses. 

Nektar also achieved pipeline progress in the fourth quarter. The biotech presented results from preclinical studies of NKTR-255 in treating hematological malignancies and updated results from a phase 1a study of NKTR-358 in treating autoimmune and inflammatory diseases. It presented new data from the Pivot-02 phase 2 study of bempegaldesleukin in combination with Bristol Myers Squibb's (NYSE:BMY) Opdivo.

The company also initiated a phase 1 study evaluating NKTR-255 in treating relapsed or refractory non-Hodgkin lymphoma or multiple myeloma. Nektar's partner, Eli Lilly (NYSE:LLY), kicked off two phase 1b clinical studies for NKTR-358, one focused on psoriasis and the other on atopic dermatitis.

Looking ahead

As is the case with many biotech stocks, pipeline progress is the most important thing to watch with Nektar Therapeutics. The company's amended agreement with Bristol-Myers Squibb expanded the number of targeted indications for the bempegaldesleukin-Opdivo combo to five. Success in at least some of these studies is critical for Nektar.

Look for additional milestones for NKTR-358, as well. Eli Lilly should initiate a phase 2 study of the drug in treating lupus, as well as start an additional phase 2 clinical study targeting a new autoimmune indication in 2020.

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