UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

 

NEKTAR THERAPEUTICS

(Exact name of registrant as specified in its charter)

 

 

150 Industrial Road San Carlos, California 94070

(Address of principal executive offices)

650-631-3100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

 

 

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  ý No  o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes  ý No  o

 

Applicable Only to Corporate Issuers

 

The number of outstanding shares of the registrant’s Common Stock, $0.0001 par value, was 56,122,809 on October 31, 2003.

 

 

NEKTAR THERAPEUTICS

INDEX

 

PART I:		FINANCIAL INFORMATION
Item 1.		Condensed Consolidated Financial Statements - Unaudited
		Condensed Consolidated Balance Sheets – September 30, 2003 and December 31, 2002
		Condensed Consolidated Statements of Operations for the three-months and nine-months ended September 30, 2003 and 2002
		Condensed Consolidated Statements of Cash Flows for the nine-months ended September 30, 2003 and 2002
		Notes to the Unaudited Condensed Consolidated Financial Statements
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.		Quantitative and Qualitative Disclosures About Market Risk
Item 4.		Controls and Procedures
PART II:		OTHER INFORMATION
Item 1.		Legal Proceedings
Item 2.		Changes in Securities and Use of Proceeds
Item 3.		Defaults Upon Senior Securities
Item 4.		Submission of Matters to a Vote of Security Holders
Item 5.		Other Information
Item 6.		Exhibits and Reports on Form 8-K
		Signatures
		Certifications

 

Forward-Looking Statements

 

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “1933 Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “1934 Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of this report, including any projections of earnings, revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance and any statement of assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this report are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct and actual results could differ materially from those projected or assumed in the forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, including but not limited to the cautionary factors set forth in this report and for the reasons described elsewhere in this report. All forward-looking statements and reasons why results may differ included in this report are made as of the date hereof and we do not intend to update any forward-looking statements except as required by law or applicable regulations.

 

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PART I:  FINANCIAL INFORMATION

 

NEKTAR THERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share information)

 

		September 30, 2003			December 31, 2002
		(unaudited)			*
ASSETS
Current assets:
Cash and cash equivalents		$	51,397		$	34,879
Short-term investments		252,793			259,090
Accounts receivable		8,724			4,370
Other current assets		13,927			12,650
Total current assets		326,841			310,989
Restricted investments		9,707			—
Property and equipment, net		145,037			143,452
Goodwill		130,120			130,120
Other intangible assets, net		12,089			15,470
Deposits and other assets		9,131			6,607
Total assets		$	632,925		$	606,638
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	6,522		$	8,655
Accrued research and development		5,442			10,359
Accrued general and administrative		2,778			5,758
Accrued compensation		7,934			11,617
Short-term debt		4,617			466
Interest payable		5,065			3,762
Capital lease obligations - current		1,175			1,008
Deferred revenue		15,269			22,040
Total current liabilities		48,802			63,665
Convertible subordinated notes and debentures		388,649			299,149
Capital lease obligations - noncurrent		30,543			31,862
Other long-term liabilities		4,246			3,159
Accrued rent		2,091			2,033
Commitments and contingencies		—			—
Stockholders’ equity:
Preferred Stock, 10,000 shares authorized
Series A, $0.0001 par value: 3,100 shares designated; no shares issued or outstanding at September 30, 2003 and December 31, 2002.		—			—
Convertible Series B, $0.0001 par value: 40 shares designated; 40 shares issued and outstanding at September 30, 2003 and December 31, 2002, Liquidation preference of $40,000 at September 30, 2003 and December 31, 2002.		—			—
Common stock, $0.0001 par value; 300,000 authorized; 55,977 shares and 55,553 shares issued and outstanding at September 30, 2003 and December 31, 2002, respectively.		6			6
Capital in excess of par value		757,176			754,680
Deferred compensation		(53		)	(239		)
Accumulated other comprehensive income		1,004			1,668
Accumulated deficit		(599,539		)	(549,345		)
Total stockholders’ equity		158,594			206,770
Total liabilities and stockholders’ equity		$	632,925		$	606,638

 

(*)                                 The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date which are included in our Form 10-K for the year ended December 31, 2002 as filed with the Securities and Exchange Commission and as amended. This balance sheet does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

 

See accompanying notes.

 

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NEKTAR THERAPEUTICS

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share information)

(unaudited)

 

		Three-Months Ended September 30,						Nine-Months Ended September 30,
		2003			2002			2003			2002
Revenue:
Contract research revenue		$	19,624		$	18,800		$	59,227		$	58,929
Product sales		7,733			4,418			21,406			13,286
Total revenue		27,357			23,218			80,633			72,215