nktr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________________________________

FORM 10-Q

_______________________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-24006

_______________________________________________________________________

NEKTAR THERAPEUTICS

(Exact name of registrant as specified in its charter)

_______________________________________________________________________


Delaware						94-3134940
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

455 Mission Bay Boulevard South

San Francisco, California 94158

(Address of principal executive offices)

415-482-5300

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	NKTR	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s Common Stock, $0.0001 par value, was 186,274,156 on April 29, 2022.


	Summary of Risks	4

PART I: FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements — Unaudited:	6
	Condensed Consolidated Balance Sheets — March 31, 2022 and December 31, 20 21	6
	Condensed Consolidated Statements of Operations for the three months ended March 31 , 202 2 and 202 1	7
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended M arch 3 1 , 202 2 and 20 21	8
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31 , 202 2 and 202 1	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 202 2 and 202 1	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II: OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
Signatures		54


	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	67,993	$	25,218
Short-term investments	599,032		708,737
Accounts receivable	30,220		22,492
Inventory	15,379		15,801
Other current assets	20,831		23,333
Total current assets	733,455		795,581
Long-term investments	37,363		64,828
Property, plant and equipment, net	60,980		60,510
Operating lease right-of-use assets	114,296		117,025
Goodwill	76,501		76,501
Other assets	1,521		2,744
Total assets	$	1,024,116	$	1,117,189
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	12,617		9,747
Accrued compensation	22,653		15,735
Accrued clinical trial expenses	33,403		26,809
Other accrued expenses	17,011		15,468
Operating lease liabilities, current portion	19,597		17,441
Total current liabilities	105,281		85,200
Operating lease liabilities, less current portion	122,638		125,736
Development derivative liability	—		27,726
Liabilities related to the sales of future royalties, net	185,604		195,427
Other long-term liabilities	2,704		3,592
Total liabilities	416,227		437,681
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized; no shares designated or outstanding at March 31, 2022 or December 31, 2021, respectively	—		—
Common stock, $0.0001 par value; 300,000 shares authorized; 186,274 shares and 185,468 shares outstanding at March 31, 2022 or December 31, 2021, respectively	19		19
Capital in excess of par value	3,537,790		3,516,641
Accumulated other comprehensive loss	(6,532)		(4,157)
Accumulated deficit	(2,923,388)		(2,832,995)
Total stockholders’ equity	607,889		679,508
Total liabilities and stockholders’ equity	$	1,024,116	$	1,117,189


	Three months ended March 31,
	2022		2021
Revenue:
Product sales	$	5,688	$	4,795
Non-cash royalty revenue related to the sales of future royalties	17,561		18,798
License, collaboration and other revenue	1,573		54
Total revenue	24,822		23,647
Operating costs and expenses:
Cost of goods sold	5,315		5,756
Research and development	107,253		95,604
General and administrative	27,339		31,679
Restructuring, impairment and other costs of terminated program	1,475		—
Total operating costs and expenses	141,382		133,039
Loss from operations	(116,560)		(109,392)
Non-operating income (expense):
Change in fair value of development derivative liability	33,427		(1,599)
Non-cash interest expense on liabilities related to the sales of future royalties	(7,529)		(13,296)
Interest income and other income (expense), net	395		1,412
Total non-operating income (expense), net	26,293		(13,483)
Loss before provision for income taxes	(90,267)		(122,875)
Provision for income taxes	126		92
Net loss	$	(90,393)	$	(122,967)

Basic and diluted net loss per share	$	(0.49)	$	(0.68)
Weighted average shares outstanding used in computing basic and diluted net loss per share	185,848		181,370


	Common Shares	Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
Balance at December 31, 2020	180,091	$	18	$	3,388,730	$	(2,295)	$	(2,309,158)	$	1,077,295
Shares issued under equity compensation plans	2,199	—		17,106		—		—		17,106
Stock-based compensation	—	—		23,898		—		—		23,898
Comprehensive income (loss)	—	—		—		(826)		(122,967)		(123,793)
Balance at March 31, 2021	182,290	18		3,429,734		(3,121)		(2,432,125)		994,506


	Estimated Fair Value at
	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	67,993	$	25,218
Short-term investments	599,032		708,737
Long-term investments	37,363		64,828
Total cash and investments in marketable securities	$	704,388	$	798,783


	Fair Value Hierarchy Level	March 31, 2022								December 31, 2021
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Fair Value
Corporate notes and bonds	2	$	196,643	$	4	$	(1,270)	$	195,377	$	278,121
Corporate commercial paper	2	439,280		—		(1,479)		437,801		478,629
Obligations of U.S. government agencies	2	4,880		—		(9)		4,871		5,875
Available-for-sale investments		$	640,803	$	4	$	(2,758)	$	638,049	$	762,625
Money market funds	1							43,523		23,968
Certificates of deposit	2							10,894		10,940
Cash	N/A							11,922		1,250
Total cash and investments in marketable securities								$	704,388	$	798,783


	March 31, 2022		December 31, 2021
Raw materials	$	2,084	$	3,166
Work-in-process	9,420		9,342
Finished goods	3,875		3,293
Total inventory	$	15,379	$	15,801