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Nektar Therapeutics Reports Operating Results (10-Q)

July 29, 2010 | About:
10qk

10qk

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Nektar Therapeutics (NKTR) filed Quarterly Report for the period ended 2010-06-30.

Nektar Therapeutics has a market cap of $1.26 billion; its shares were traded at around $13.35 with and P/S ratio of 17.4. NKTR is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, RS Investment Management, PRIMECAP Management, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

At June 30, 2010, we had approximately $338.2 million in cash, cash equivalents, and short-term investments and $239.7 million in indebtedness. We may from time to time purchase or retire convertible subordinated notes through cash purchase or exchanges for our other securities in open market or privately negotiated transactions, depending on, among other factors, our levels of available cash and the price at which such convertible notes are available for purchase. For instance, in the fourth quarter of 2008, we repurchased approximately $100.0 million in par value of our 3.25% convertible subordinated notes for an aggregate purchase price of $47.8 million. We will evaluate similar future transactions, if any, in light of then-existing market conditions. These transactions, individually or in the aggregate, may be material to our business.

For the three months and six months ended June 30, 2010, the increase in License, collaboration and other revenue compared to the three months and six months ended June 30, 2009 is primarily attributable to amortization of the $125.0 million upfront payment received from AstraZeneca in October 2009 for NKTR-118 and NKTR-119, contract research and other revenue from AstraZeneca, and the amortization of the $31.0 million license extension option payment received in December 2009. Under the AstraZeneca license transaction, we recognized $25.3 million and $50.7 million, respectively, of the $125.0 million upfront payment and $2.2 million and $2.6 million, respectively, of contract research and other revenue for the three months and six months ended June 30, 2010. We recognized $1.3 million and $2.6 million, respectively, of the license extension option payment for the three months and six months ended June 30, 2010.

For the three months and six months ended June 30, 2010 compared to the same periods in 2009, research and development expense increased by $1.0 million and $1.9 million, respectively, for our India operations after the completion of the India research facility, by $1.7 million and $3.3 million, respectively, in U.S. employee costs as a result of headcount additions and salary and benefit cost increases, and by $0.8 million and $1.7 million, respectively, in non-cash stock-based compensation expense.

These increases are partially offset by lower expenses for the NKTR-118 and NKTR-119 programs as a result of our successful completion of Phase 2 clinical studies and our collaboration with AstraZeneca in September 2009; expenses totaled approximately $2.2 million and $6.5 million, respectively, for the three months and six months ended June 30, 2009 compared to $0.8 million and $1.3 million, respectively, for the three months and six months ended June 30, 2010. In addition, NKTR-102 program costs decreased by approximately $1.0 million and $0.1 million, respectively, for the three months and six months ended June 30, 2010 compared to the three months and six months ended June 30, 2009.

We had cash, cash equivalents and short-term investments in marketable securities of $338.2 million and indebtedness of $239.7 million, including $215.0 million of 3.25% convertible subordinated notes due September 2012, $19.6 million in capital lease obligations, and $5.1 million in other liabilities as of June 30, 2010.

For the six months ended June 30, 2009, cash used in operations totaled $71.1 million and included $4.7 million for employee bonus payments related to services performed in 2008, $3.5 million for interest payments on our convertible subordinated notes, $2.7 million for severance payments, and $60.2 million of other net operating cash uses.

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