DJ Teaser: "Nektar ups 2007 rev guidance" Well, not really . . .
>>Form 8-K for NEKTAR THERAPEUTICS
31-May-2007
Regulation FD Disclosure
Item 7.01. Regulation FD Disclosure.
The company will announce management's current 2007 revenue projections and 2007 cash projections at a presentation to be given by Howard W. Robin, the company's President and Chief Executive Officer, at the upcoming Bank of America 2007 Health Care Conference in Las Vegas, Nevada, on Thursday, May 31, at approximately 4:40 p.m. PT. The presentation and question and answer session will be accessible via a live audio-only Webcast through a link posted on the Investor Relations, Events Calendar section of the Nektar website:
nektar.com. This Webcast will be available for replay until June 14, 2007. A summary of these 2007 financial projections is provided in this report. Pursuant to the rules and regulations of the SEC, the information set forth herein is deemed to be furnished and shall not be deemed to be "filed" under the Securities Exchange Act of 1934, as amended.
2007 Revenue Projections Prior Guidance(1) Revised
Exubera® Product Sales and Royalties $110-130 million $110-130 million
Change in Exubera Revenue Recognition(2) $26 million
Pulmonary and PEGylation Partner Revenue $100-120 million $100-120 million
Total Revenue $210-250 million $236-$276 million
2007 Cash Projections(3) Prior Plan(4) Revised
Ending cash balance as of December 31, 2005 $567 million $567 million
Change in 2006 Cash ($100) million ($100) million
Ending cash balance as of December 31, 2006 $467 million $467 million
Projected Decrease in 2007 Cash before payments of ($89-99) million
convertible debt due in 2007 ($62-72) million
Convertible Subordinated Notes due 2007(5) ($103) million ($103) million
Projected Ending cash balance as of December 31, 2007 $265-275 million $292-302 million
(1) Numbers in this column refer to 2007 revenue projections provided by the company in the press release dated February 28, 2007 with respect to Exubera ® product sales and royalties and total revenue (filed as Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on February 28, 2007).
(2) Beginning January 1, 2007, the company recognized Exubera revenue upon shipment of bulk powder insulin and inhalers. Prior to January 1, 2007, the company deferred Exubera revenue until the expiration of Pfizer's 60-day contractual right of return. Please refer to Note 1, Critical Accounting Policies and Management's Estimates, Revenue Recognition, in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, for a full description of this revenue recognition policy.
(3) All references to cash in this table refer to the sum of cash, cash equivalents, short-term investments and long-term investments.
(4) Numbers in this column as of a date following the date of this report represent management's current estimate of the projected change in 2007 ending cash balance prior to implementing the company's plan to reduce ongoing spending announced on May 24, 2007 (filed as Exhibit 99.1 to the company's Current Report on Form 8-K filed with the SEC on May 24, 2007).
(5) During the quarter ended March 31, 2007, the company repaid $36 million of its 5% convertible subordinated notes that were due in February 2007. The remaining $67 million relates to the 3.5% convertible subordinated notes that are due in October 2007.<<
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They're being a bit cautious; they already said they would do this on the last CC. The newswires are picking up the story and claiming they are upping '07 revenue guidance, which is not exactly the case. Just an accounting change. At first glance, it looks as though the "increase" in revenue flowed to the assets in cash. But this comes from the cost reduction program announced since the CC. And the reduction in expense for this year just happens to equal this phantom increase. A bit sneaky, ya gotta read the footnotes.
Wonder if any daytraders will bid up the shares tomorrow, having not understood the above, and seeing only the headlines "Nektar ups 2007 rev guidance . . ." Might be a good short trade, if so.
Cheers, Tuck |
