) reported a loss of 26 cents per share in the second quarter of
2014, narrower than the Zacks Consensus Estimate of a loss of 38
cents and the year-ago loss of 37 cents.
Nektar Therapeutics - Earnings Surprise |
Total revenues in the reported quarter fell 15.8% year over year
to $28.5 million. The decrease in quarterly revenues was primarily
due to decreased manufacturing activity. However, revenues beat the
Zacks Consensus Estimate of $21 million.
Quarter in Detail
Total revenues comprised net product revenues, royalty revenues,
non-cash royalty revenues, license and collaboration revenues and
Nektar's net product and royalty revenues of approximately $5.9
million were down 44.8% during the reported quarter. Non-cash
royalty revenues related to the sale of future royalties increased
26.3% year over year to $4.8 million in the reported quarter.
License, collaboration and other revenues decreased 8.1% year
over year to $17.8 million. Nektar has a partnership with
) for Movantik (naloxegol), which is being developed for the
treatment of opioid-induced constipation (OIC). Movantik is under
review in the U.S. A final decision from the FDA on the approval of
Movantik is expected by Sep 16, 2014.
In Jun 2014, most of the members of the FDA's Anesthetic and
Analgesic Drug Products Advisory Committee (AADPAC) recommended
that no cardiovascular outcomes study is required for the
peripherally-acting mu-opioid receptor antagonist (PAMORA) class of
drugs, which includes Movantik. We note that although the FDA is
not bound to follow the advisory committee's opinion, it generally
does so. Movantik is also under review in the EU and Canada for the
Research and development (R&D) expenses were down 29.7% year
over year to $36.7 million in the second quarter of 2014. R&D
expenses during the quarter decreased primarily due to lower
clinical expenses as the phase III study on pipeline candidate
etirinotecan pegol (breast cancer) completed enrollment in the
third quarter of last year. Nektar's general and administrative
(G&A) expenses increased 4.2% year over year to $9.6 million
during the quarter.
2014 Guidance Reiterated
Nektar reaffirmed its 2014 revenue guidance in the range of
$190-$195 million. The Zacks Consensus Estimate of $199 million is
ahead of the company's guidance range.
The company's revenue guidance includes the recognition of $35
million of milestone payments from AstraZeneca related to Movantik
in the third quarter of 2014. Nektar also expects to recognize $70
million of additional milestones from its other collaborations. The
guidance also includes $20 million of non-cash royalty revenues in
relation to Cimzia and Mircera.
Nektar expects 2014 R&D expenses between $165-$175 million
and G&A expenses within $40-$42 million.
AstraZeneca expects a potential EU approval as well for Movantik
before 2014 end. It intends to launch Movantik in the U.S. and the
EU in the first quarter of 2015/early second quarter of 2015 and
second quarter of 2015 respectively. The launch will trigger
another $100 million and $40 million respectively.
Nektar has progressed well with its pipeline in the last few
quarters and is awaiting several pipeline related events in the
coming quarters. Nektar expects to report phase III data on
etirinotecan pegol in the first quarter of 2015. The company is in
discussion with the FDA regarding the design of a phase III study
on NKTR-181 in chronic pain patients.
The company's second-quarter results did not surprise us.
Nektar's 2014 guidance looks good. Its lead pipeline candidate,
Movantik, holds immense potential. In addition, the company has a
series of pipeline related events in the coming quarters and we
expect investor focus to remain on Nektar's pipeline.
Nektar currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same sector include Salix
) and Allergan (
). look well placed in the healthcare sector. Both carry a Zacks
Rank #1 (Strong Buy).
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