) reported a loss of 14 cents per share in the third quarter of
2013, narrower than the year-ago loss of 38 cents and the Zacks
Consensus Estimate of a loss of 19 cents. The narrower loss
during the quarter was primarily due to higher revenues.
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Total revenues in the reported quarter jumped 230.8% to $60.9
million, well above the Zacks Consensus Estimate of $48 million.
The huge increase in quarterly revenues was primarily due to a
$25.0 million milestone payment received from
) relating to naloxegol. Third quarter revenues also benefited
from higher product sales.
Quarter in Details
Total revenues comprised net product revenues, royalty revenues,
non-cash royalty revenues, license and collaboration revenues and
License, collaboration and other revenues increased to $41.4
million from the year-ago figure of $6.1 million primarily due to
the milestone received from AstraZeneca. Nektar has a partnership
with AstraZeneca for naloxegol, which is being developed for the
treatment of opioid-induced constipation (OIC). The $25 million
milestone payment during the quarter was related to the
acceptance of the marketing authorization application for the
candidate in the EU.
We remind investors that naloxegol is also filed in the U.S. The
acceptance of the New Drug Application in the U.S. will further
trigger a $70 million milestone payment from AstraZeneca. Nektar
is eligible to receive another $175 million for naloxegol,
related to the U.S. and EU launch of the drug and achievement of
Nektar's net product revenues of approximately $14.7 million were
up 75.6% during the reported quarter.
Nektar's royalty revenues decreased 28.9% to $0.4 million during
the quarter. Non-cash royalty revenues related to the sale of
future royalties increased 32% to $4.5 million in the reported
Research and development (R&D) expenses were up 29.1% to
$43.9 million in the third quarter of 2013. R&D expenses
during the quarter increased primarily due to higher clinical
expenses related to its pipeline.
Nektar's general and administrative (G&A) expenses increased
5.7% to $10.6 million during the quarter.
2013 Outlook Updated
Nektar cut its revenue guidance for 2013 to $135 million - $140
million (previous: $200 million - $210 million). The company
pared its revenue guidance as the $70 million milestone payment
from AstraZeneca that was expected in Nov 2013 is now scheduled
Revenue guidance includes $17 million of non-cash royalty
revenues in relation to Cimzia and Mircera.
Nektar also reduced its R&D expense guidance for 2013 to $175
million - $180 million from $200 million - $220 million. The
reduced R&D guidance is primarily due to the postponement of
a phase III study initiation of NKTR-181. Nektar's G&A
expenses for 2013 are however maintained in the range of $42-$44
In Jul 2013, Nektar completed the enrolment process for the phase
III BEACON study on its metastatic breast cancer candidate
NKTR-102. Nektar plans to conduct an interim futility analysis on
the phase III study in early 2014. The company expects top-line
survival data from the BEACON study by the end of 2014 or early
Nektar is currently designing a phase III study on NKTR-181 in
chronic pain patients after missing the primary endpoint in the
phase II efficacy study earlier this year. The company expects to
initiate the study in the middle of next year. We expect investor
focus to remain on Nektar's pipeline.
Nektar currently carries a Zacks Rank #3 (Hold). However stocks
AMAG Pharmaceuticals, Inc.
) currently look better positioned with a Zacks Rank #1 (Strong