) reported a loss of 37 cents per share in the first quarter of
2014, wider than the Zacks Consensus Estimate of a loss of 35
cents. First quarter loss was, however, narrower than the year-ago
loss of 48 cents. The narrower year-over-year loss was primarily
due to lower expenses.
Total revenues in the reported quarter fell 14.1% to $19.8 million.
The decrease in quarterly revenues was primarily due to lower
product sales. Revenues were also well below the Zacks Consensus
Estimate of $36 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 51.2% 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 31.4% to $5.8 million in the reported quarter.
License, collaboration and other revenues increased 27.8% to $8.1
million. Nektar has a partnership with
) for naloxegol, which is being developed for the treatment of
opioid-induced constipation (OIC). AstraZeneca intends to launch
naloxegol in the U.S. and the EU in the first quarter of 2015,
which will trigger another $100 million and $40 million
respectively. Nektar will also receive another $35 million in 2014
from AstraZeneca if no significant preapproval cardio vascular
safety study is required on naloxegol.
Research and development (R&D) expenses were down 16% to $38.3
million in the first quarter of 2014. R&D expenses during the
quarter decreased primarily due to lower clinical expenses as the
phase III study on etirinotecan pegol (breast cancer) completed in
the third quarter of last year. Nektar's general and administrative
(G&A) expenses decreased 8.3% to $9.9 million during the
Maintains 2014 Guidance
Nektar reaffirmed its 2014 revenue guidance in the range of
$190-$195 million. The Zacks Consensus Estimate of $186 million is
below the company's guidance range.
The company's revenue guidance includes the recognition of $35
million of milestone payments from AstraZeneca related to naloxegol
in the third quarter of 2014. Nektar also expects to recognize $12
million to $17 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.
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 study is expected to
start in the third quarter.
The company's first-quarter results were disappointing. However,
Nektar's 2014 guidance looks good. The company's progress with
naloxegol is also encouraging. 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
Spectrum Pharmaceuticals, Inc.
Ariad Pharmaceuticals Inc.
). While Spectrum Pharma carries a Zacks Rank #1 (Strong Buy),
Ariad holds a Zacks Rank #2 (Buy).
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