ofjames, the answer to your question is simple. That blowhard Cramer says it all the time... you only need to get rich once.
Suppose I gave you a choice. You can have $5M to keep. Or you can have a 50% chance at $25M and a 50% chance at $500K. It's good old game theory. I'd take the $5M and live happily ever after, so would most people.
Klaus, I would be happy to run the numbers for you.
NKTR had $263M cash and equivalents at the end of 2014. They maintained guidance of $63M cash burn exclusive of the latest debt deal. The deal gained about $100M after expenses. So figure NKTR will have $300M cash at the end of the year.
The company burns cash at a pretty steady clip, let's say $55M/quarter. That would bring them down to $80M at the end of 2016, not counting royalties from Movantik and Adynovate.
Let's plug in some pipedream numbers for 2016, $400M sales of both Movantik and Adynovate. 20% royalty for Movantik nets $80M, 5% royalty for Adynovate nets $20M. Even that sales level covers less than half the cash burn.
Then there is this wording from the 8-K... "The Indenture contains customary covenants, including covenants that limit or restrict the Company's ability to incur liens, incur indebtedness, declare or pay dividends, redeem stock, issue preferred stock, make certain investments, merge or consolidate, make dispositions of assets, or enter into certain new businesses or transactions with affiliates."
What does this mean? The chances NKTR springs for another 102 study are slim and none, and Slim just left town. Maybe some enterprising pharma will take it off their hands for a nickel or a dime. The cash crunch has been postponed from mid 2016 to early 2017. The can has been kicked down the road.
The way I interpret the 102 conditional approval is that the study that Europe requires is the same study that would satisfy the FDA. So NKTR is left with the choice. Run the study, and NKTR will be permitted to sell 102 in Europe while the study proceeds. Or drop 102.
Another thought about the 061 trial is that there may be problems enrolling patients. Enrolling patients into a clinical trial involves informed consent. 061 is used on critical care patients on ventilators. Taking part in a clinical trial is probably the last thing on their minds at that time, and patients in that condition are often not fully aware.
1. Patients randomized at higher doses of NKTR-181 in this Phase 3 than at the previous Phase 2. Not sure if this is a good or bad thing.
2. If no increase in the number of patients is required, topline data available by end of 2016. Previous guidance was 1H17. If number of patients needs to increase, NKTR-181 efficacy is marginal at best.
But I still don't see anything in this study design that demonstrates that NKTR-181 works better than NSAID's. Note that there are two pivotal studies, one with opioid-naïve patients, a later one with opioid-experienced patients. The bar is lower with the second group. The best way to look at it... if NKTR-181 and NSAID's tie, then NSAID's win, if NKTR-181 and addictive opioids tie, then NKTR-181 wins.
What's so special about Nektar's immune-oncology? It cures cancer in mice. Just like NKTR-102 and NKTR-105 did. Let's see some clinical results compared to competing products before making an assessment.
Something to consider is that the Bayer partnered treatments may be obsolete by the time they finally hit the market. Slow enrollment in the Phase 3's can be a sign of that. I haven't had time to do an analysis of the existing and developing treatment options, perhaps someone here has the time.
After paying of the existing note, add about $100M to cash on hand. The notes are secured, but not sure by what assets, probably limits their ability to partner candidates. Company is good on cash until end of 2016, not counting potential revenue from Movantik and Adynovate.
See today's AF article "Amicus, Other Biotech CEOs Should Listen More, Talk Less About FDA Matters". Until FDA discussions about NKTR-102 are complete and minutes are in hand, HR should say nothing about the path forward (or not) for MBC. Better yet would be to release meeting minutes so investors can judge for themselves.
Turing already has over $50M in the bank and doesn't need any more if the price increase sticks. Do the math, 1000 patients at $250K per year, that's $250M in revenue. It leaves NKTR in the dust.
One of the tools Shkreli uses is taking Daraprim into closed distribution. It means that Turing won't sell it to anyone trying to develop a generic version. Yes, you can buy all the chemicals you need in bulk really cheaply, but you won't be able to a required apples-to-apples comparison with the Daraprim formulation because Turing won't sell you any for the comparison. It's a major regulatory loophole that Shkreli exploits for his own greedy piggish benefit and the government needs to correct.
Scumbasket Shkreli is now national news. Biotechs are getting slaughtered because pols are falling all over themselves promoting new price controls.
Search for "Company hikes price 5,000% for drug that fights complication of AIDS, cancer" and "COMMENTARY: Why would Martin Shkreli hike an old drug price by 5000%? Only a 'moron' would ask". Also made a segment on CNBC this morning.
The next CNBC story about Shkreli will be on American Greed.