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Biotech / Medical : NKTR Drug delivery Company -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (214)	5/9/2007 5:51:45 PM
From: tuck	Respond to of 507

>>Nektar Therapeutics Announces First Quarter 2007 Results Wednesday May 9, 4:32 pm ET SAN CARLOS, Calif.--(BUSINESS WIRE)--Nektar Therapeutics (Nasdaq:NKTR - News) announced today the company's financial results for the first quarter that ended on March 31, 2007: Revenue totaled $85.0 million compared to $29.0 million in the same period in 2006. Exubera-related revenue was $59.8 million compared to $1.5 million in the same period in 2006. On January 1, 2007, we began recognizing revenue upon product shipment. First quarter 2007 revenues include $26.0 million resulting from the elimination of the 60-day revenue deferral that was applied to Exubera manufacturing sales to Pfizer in 2006. As a result, the first quarter of 2007 included an additional 60 days of Exubera product sales to Pfizer. Cash, cash equivalents, and short- and long-term investments of $398.3 million as of March 31, 2007, compared to $467.0 million as of December 31, 2006. In the first quarter of 2007, we repaid $36 million of convertible debt. We also experienced changes in our balance sheet including an increase in receivables and reduction in accounts payable which we do not expect to incur in future quarters in 2007. Nektar reported a net loss of $25.7 million or $(0.28) per share (which included $6.3 million of stock-based compensation charges) compared to a net loss of $33.5 million or $(0.38) per share in the same period of 2006 (which included $6.9 million of stock-based compensation charges). "We made significant progress this quarter," said Howard Robin, President and Chief Executive Officer of the company. "In particular, we are excited about the progress we made in PEGylating small molecules. Our two most advanced programs--NKTR-102 -- PEGylated-irinotecan and NKTR-118 -- PEGylated-naloxol are based on well understood molecules and have enormous therapeutic and commercial potential. We plan to initiate Phase 2 clinical trials for both of these by year-end." Mr. Robin will host a conference call today for analysts and investors beginning at 1:30 p.m. PST to discuss the company's performance. This conference call will be available via webcast and can be accessed through a link that is posted on the Investor Relations section of the Nektar website, www.nektar.com. The web broadcast of the conference call will be available for replay through May 23, 2007. To access the conference call via telephone, follow these instructions: Dial: (800) 640-9765 (U.S.); (847) 413-4837 (international). Passcode: 17659665 (Howard Robin is the host).<< snip CC notes follow This is a 6 cent beat, even with the deferred revenue -- as that was telegraphed last year. However, the scrips still suck, and management is saying that Pfizer has admitted the launch has been bad. They are relaunching. This is, of course, exasperating, because we've kind of heard this sort of talk before, yes? A restructuring has been announced on the CC in which NKTR will somehow reduce burn from $100 million to $40 million or less. This is due solely to cuts in spending, and does not assume revenue from any deal. This without outlicensing or axing programs.. I certainly look forward to how they intend to pull that off, supposedly through some sort of efficiency gains, and some headcount & capex reduction. Some of that will be seen this year, but all of it by next year. Details in the forthcoming weeks. They say their 2nd generation device is smaller than their own, and smaller than Alkermes or Mannkind's device. It's cheap to make and disposable(!). Easier to use. What they don't say is when it'll debut. Obviously, this is Pfizer's call, and they are not making it public at this point. Analysts are concerned about Exubera inventory, and indeed, manufacturing will slow done for a while. Nektar has no direct exposure in terms of inventory write-offs, however; if Pfizer overestimated demand/botched the launch, that's Pfizer's problem as far as write downs are concerned. Nektar doesn't expect to make more devices this year. The powder has a shelf life of a year from manufacture and a year in the consumer's hands for a maximum of 2 years. But not much manufacturing cost is variable, it's mostly fixed. The 3 programs in the clinic address $1+ billion markets, and are all internal at this point; though Nektar does intend to make a deal or two this year. More to be added despite restructuring. Interesting tone to the call. Everyone a bit testy, but management was as forthright as their relationship with Pfizer allowed them to be, and I sensed more animation and determination from management than before. Robin does seem bent to shake things up. I'd like to think this is the peak of discontent as reflected in the share price. I expect my last batch of sold calls to expire worthless, but given what I've heard, I will likely not write more at these levels. The stock was up some after hours. Cheers, Tuck