Yahoo Finance Nektar Therapeutics (NKTR) Q1 Earnings & Revenues Beat
Nektar Therapeutics NKTR reported a loss (excluding non-cash goodwill and other impairment charges) of 25 cents per share for the first quarter of 2023, which was narrower than the Zacks Consensus Estimate as well as our estimate of a loss of 26 cents. In the year-ago quarter, the loss was 49 cents per share.
Quarterly revenues declined 13% year over year to $21.6 million during the quarter. Revenues beat the Zacks Consensus Estimate of $20.6 million but slightly missed our model estimate of $22.1 million.
Quarter in Detail
In the first quarter, product sales declined 17% from the year-ago quarter’s levels to $4.7 million. Non-cash royalty revenues were $16.9 million, down 4% from the year-ago quarter.
License, collaboration and other revenues were $0.02 million compared with $1.57 million in the year-ago quarter.
Research and development (R&D) expenses declined 71.5% to $30.5 million due to the winding down of the development of bempegaldesleukin (bempeg). Bempeg failed in three late-stage registrational studies in the first quarter of 2022. Following these failures, Nektar stopped all clinical studies on bempeg in early 2022
General and administrative (G&A) expenses declined 22.7% year over year to $21.1 million due to the discontinuation of the development of bempeg.
Cash and investments in marketable securities as of Mar 31, 2023 were $457 million compared with $505 million as of Dec 31, 2022.
Shares of Nektar Therapeutics have declined 80.2% in the past year compared with the industry’s 0.2% decrease.
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Pipeline Update
Nektar has two key candidates in its pipeline, rezpegaldesleukin (rezpeg) and NKTR-255. Rezpeg, a first-in-class regulatory T cell program, was being developed in collaboration with Eli Lilly LLY for several autoimmune indications.
However, last month, Nektar announced that it will regain full rights to rezpeg from Lilly. Nektar will now take care of clinical development and plans to move forward rezpeg into phase II development. Nektar plans to begin a phase IIb study in patients with moderate-to-severe atopic dermatitis (AS) in 2023. The candidate has demonstrated sustained disease control for at least six months in AD patients in a previously completed proof-of-concept study. Nektar also plans to study the candidate for some other auto-immune indications.
Rezpeg now becomes a wholly owned asset of Nektar’s and the latter owes no royalty payments to Lilly.
In February, Lilly and Nektar stopped a phase II study evaluating rezpeg for moderately-to-severely active systemic lupus erythematosus (SLE) as the study failed to meet its primary endpoint.
On Apr 17, Nektar announced strategic reprioritization initiatives highlighting plans to prioritize programs in immunology, including rezpeg and some other immunology research programs
Nektar said it will continue the development of its ongoing phase II study (NKTR-sponsored) on its IL-15 program, NKTR-255 in combination with approved cell therapies, Breyanzi and Yescarta, as well as its phase II JAVELIN Bladder Medley study with partner Merck KGaA in patients with locally advanced or metastatic urothelial carcinoma. Nektar is also continuing the development of NKTR-255 in cancer indications. Simultaneously, Nektar is exploring strategic partnership options for NKTR-255 and aims to find a partner this year. Alongside, Nektar also announced that it is reducing its San Francisco-based workforce by approximately 60%.
2023 Guidance
In 2023, Nektar expects revenues to be between $80 million and $90 million, which includes $65 million to $70 million in non-cash royalties and $15 million to $20 million in product sales. The Zacks Consensus Estimate for 2023 revenues is $85 million.
R&D costs are expected to range between $105 million and $115 million, while G&A costs are expected to be between $75 million and $80 million. Nektar expects to end 2023 with at least $315 million in cash and investments.
Zacks Rank & Stocks to Consider
Nektar Therapeutics currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Larimar Therapeutics LRMR and Iterum Therapeutics ITRM). While Iterum Therapeutics has a Zacks Rank of 1 (Strong Buy), Larimar Therapeutics has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Loss estimates for Iterum Therapeutics have narrowed from $5.91 per share to $3.55 per share for 2023 over the past 60 days and from $4.95 per share to $3.37 per share for 2024. Shares of Iterum Therapeutics have declined 65.7% in the past year.
ITRM delivered an average four-quarter earnings surprise of 7.81%.
Loss estimates for Larimar Therapeutics have narrowed from $2.07 per share to $1.08 per share for 2023 over the past 60 days and from $2.28 per share to $1.15 per share for 2024. Shares of Larimar Therapeutics have risen 74.0% in the past year.
Earnings of LRMR beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 36.06%. In the last reported quarter, LRMR earnings beat estimates by 73.08%.
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