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Nektar (NKTR) Q4 Earnings and Revenues Top, Pipeline On Track

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Nektar Therapeutics NKTR reported a loss of 65 cents per share for the fourth quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 72 cents but wider than the year-ago loss of 64 cents.

Quarterly revenues were down 30.7% year over year to $23.5 million during the quarter. However, revenues beat the Zacks Consensus Estimate of $19.64 million.

Nektar’s shares have gained 9.3% in the past year compared with the industry’s increase of 8.1%.

Quarter in Detail

Nektar’s top line comprises product sales, royalty revenues, non-cash royalty revenues along with license, collaboration and other revenues.

In the fourth quarter, product sales decreased 50.4% from the year-ago period to $2.9 million. Non-cash royalty revenues were up 135.8% to $20.6 million.

License, collaboration and other revenues were $0.4 million in the quarter compared with $7.1 million in the year-ago quarter.

Research and development (R&D) expenses decreased 7% to $102.7 million. General and administrative (G&A) expenses remained flat year over year at $27.1 million in the reported quarter.

Full-Year Results

Nektar reported revenues of $152.9 million for the full year, up 33.4% year over year. The company incurred loss of $2.49 per share for 2020, 1.2% narrower than the year-ago period.

2021 Guidance

Nektar issued revenue and operating expense guidance for 2021. The company expects total revenues to be approximately $100 million in 2021. It will include $15 million to $20 million of product sales and $80 million to $85 million of non-cash royalty revenues. R&D expenses are expected to be in the range of $450-$500 million while G&A expenses are expected to be between $120 million and $125 million.

Pipeline Update

During the quarter, Nektar presented updated clinical data from the metastatic melanoma cohort of PIVOT-02 study evaluating bempegaldesleukin with Bristol-Myers’ BMY Opdivo. Data showed that the combo regimen achieved median progression-free survival of 30.9 months. Meanwhile, the company is developing the combination regimen in five registrational studies in melanoma, renal cell carcinoma and bladder cancer patients. The company plans to initiate another registrational study in the second half of 2021 to evaluate bempegaldesleukin in combination with Merck’s MRK Keytruda as first-line treatment of patients with metastatic or unresectable recurrent squamous cell carcinoma of the head and neck.

Nektar is also evaluating the combination of bempegaldesleukin and Keytruda in the phase II PROPEL study as potential treatment for metastatic non-small cell lung cancer patients. Initial data from the study is expected in the first part of 2021.

In December 2020, the company initiated a phase I/II study to evaluate another pipeline candidate, NKTR-255, in combination with Eli Lilly’s LLY Erbitux (cetuximab) in patients with relapsed or refractory head and neck squamous cell carcinoma or colorectal cancer.

We note that Nektar has another key candidate, NKTR-358, in its pipeline. The development of the candidate is led by its partner Eli Lilly. A phase II study is evaluating the candidate in patients with systemic lupus erythematosus and another mid-stage study is evaluating it in ulcerative colitis patients. Additional phase II studies are likely to start over the next 12-18 months to evaluate NKTR-358 in immune-mediated diseases.

Nektar Therapeutics Price, Consensus and EPS Surprise

Nektar Therapeutics Price, Consensus and EPS Surprise
Nektar Therapeutics Price, Consensus and EPS Surprise

Nektar Therapeutics price-consensus-eps-surprise-chart | Nektar Therapeutics Quote

Zacks Rank

Nektar currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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