) reported a loss of 41 cents per share in the fourth quarter of
2013, wider than the Zacks Consensus Estimate of a loss of 16
cents. Fourth quarter loss was however narrower than the year-ago
loss of 46 cents. The narrower year-over-year loss was primarily
due to higher revenues.
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Total revenues in the reported quarter jumped 47.3% to $31.1
million. The huge increase in quarterly revenues was primarily
due to increased product shipments to one of the company's
partners. Revenues were however well below the Zacks Consensus
Estimate of $56 million.
The company reported a loss of $1.40 per share in 2013, wider
than the Zacks Consensus Estimate of a loss of $1.14 but narrower
than the year-ago loss of $1.48 per share. Nektar's total
revenues in 2013 increased 83.4% to $148.9 million. Revenues were
however well below the Zacks Consensus Estimate of $181 million.
Quarter in Detail
Total revenues comprised net product revenues, royalty revenues,
non-cash royalty revenues, license and collaboration revenues and
License, collaboration and other revenues increased 130.4% to
$13.7 million. Nektar has a partnership with
) for naloxegol, which is being developed for the treatment of
opioid-induced constipation (OIC). Nektar triggered a $70 million
milestone payment from AstraZeneca after the candidate's New Drug
Application (NDA) was accepted in the U.S. AstraZeneca intends to
launch naloxegol in the U.S. and the EU in 2015, which will
trigger another $100 million and $40 million respectively.
Nektar's net product revenues of approximately $8.0 million were
down 22.7% 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 140% to $9.3 million in the reported quarter.
Research and development (R&D) expenses were up 4.0% to $48.2
million in the fourth 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 decreased 9.5% to $9.8 million during the
Disappointing 2014 Guidance
Nektar expects 2014 total revenues in the range of $190-$195
million. The Zacks Consensus Estimate of $267 million is well
above the company's guidance range.
The company's revenue guidance includes the recognition of $70
million and $35 million milestone payments from AstraZeneca
related to naloxegol. 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 million and
$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
NKTR-102 in early 2015. The candidate is being developed for the
treatment of patients suffering from advanced breast cancer.
Nektar is currently designing a phase III study on NKTR-181 in
chronic pain patients, which is expected to start in mid-2014.
The company's fourth quarter results were disappointing. Nektar
also provided a weak 2014 guidance. However, the company's
progress with naloxegol is 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 #4 (Sell). Some
better-ranked stocks in the same sector include
Auxilium Pharmaceuticals Inc.
). Both the stocks carry a Zacks Rank #1 (Strong Buy).