Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NKTR | |
Entity Registrant Name | NEKTAR THERAPEUTICS | |
Entity Central Index Key | 906,709 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 156,327,530 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 16,149 | $ 59,640 |
Short-term investments | 249,398 | 329,462 |
Accounts receivable, net | 4,114 | 15,678 |
Inventory | 11,008 | 11,109 |
Other current assets | 7,496 | 10,063 |
Total current assets | 288,165 | 425,952 |
Long-term investments | 45,160 | 0 |
Property, plant and equipment, net | 64,929 | 65,601 |
Goodwill | 76,501 | 76,501 |
Other assets | 1,104 | 817 |
Total assets | 475,859 | 568,871 |
Current liabilities: | ||
Accounts payable | 6,241 | 2,816 |
Accrued compensation | 14,346 | 18,280 |
Accrued clinical trial expenses | 6,683 | 7,958 |
Other accrued expenses | 6,683 | 4,711 |
Interest payable | 4,144 | 4,198 |
Capital lease obligations, current portion | 2,706 | 2,908 |
Liability related to refundable upfront payment | 12,500 | 12,500 |
Deferred revenue, current portion | 13,373 | 14,352 |
Other current liabilities | 5,937 | 4,499 |
Total current liabilities | 72,613 | 72,222 |
Senior secured notes, net | 244,336 | 243,464 |
Capital lease obligations, less current portion | 1,056 | 2,223 |
Liability related to the sale of future royalties, net | 101,897 | 105,950 |
Deferred revenue, less current portion | 48,979 | 51,887 |
Other long-term liabilities | 3,592 | 5,000 |
Total liabilities | 472,473 | 480,746 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 10,000 shares authorized; no shares designated, issued or outstanding at June 30, 2017 or December 31, 2016 | 0 | 0 |
Common stock, $0.0001 par value; 300,000 shares authorized; 155,861 shares and 153,212 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 15 | 15 |
Capital in excess of par value | 2,150,019 | 2,111,483 |
Accumulated other comprehensive loss | (1,662) | (2,363) |
Accumulated deficit | (2,144,986) | (2,021,010) |
Total stockholders’ equity | 3,386 | 88,125 |
Total liabilities and stockholders’ equity | $ 475,859 | $ 568,871 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares designated | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 155,861,000 | 153,212,000 |
Common stock, shares outstanding | 155,861,000 | 153,212,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Product sales | $ 15,693 | $ 12,867 | $ 20,449 | $ 26,966 |
Royalty revenue | 7,434 | 3,516 | 14,651 | 7,576 |
Non-cash royalty revenue related to sale of future royalties | 6,638 | 8,115 | 13,301 | 14,650 |
License, collaboration and other revenue | 4,824 | 8,270 | 10,916 | 42,457 |
Total revenue | 34,589 | 32,768 | 59,317 | 91,649 |
Operating costs and expenses: | ||||
Cost of goods sold | 8,989 | 7,708 | 15,120 | 16,578 |
Research and development | 60,260 | 52,350 | 121,318 | 101,618 |
General and administrative | 15,996 | 11,035 | 27,972 | 21,262 |
Total operating costs and expenses | 85,245 | 71,093 | 164,410 | 139,458 |
Loss from operations | (50,656) | (38,325) | (105,093) | (47,809) |
Non-operating income (expense): | ||||
Interest expense | (5,510) | (5,627) | (10,912) | (11,304) |
Non-cash interest expense on liability related to sale of future royalties | (4,512) | (4,982) | (9,064) | (10,027) |
Interest income and other income (expense), net | 906 | 458 | 1,564 | 1,333 |
Total non-operating expense, net | (9,116) | (10,151) | (18,412) | (19,998) |
Loss before provision for income taxes | (59,772) | (48,476) | (123,505) | (67,807) |
Provision for income taxes | 99 | 127 | 232 | 294 |
Net loss | $ (59,871) | $ (48,603) | $ (123,737) | $ (68,101) |
Basic and diluted net loss per share | $ (0.39) | $ (0.36) | $ (0.80) | $ (0.50) |
Weighted average shares outstanding used in computing basic and diluted net loss per share | 155,352 | 136,350 | 154,514 | 136,072 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Comprehensive loss | $ (59,684) | $ (48,787) | $ (123,036) | $ (67,950) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (123,737) | $ (68,101) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash royalty revenue related to sale of future royalties | (13,301) | (14,650) |
Non-cash interest expense on liability related to sale of future royalties | 9,064 | 10,027 |
Stock-based compensation | 16,283 | 12,627 |
Depreciation and amortization | 8,287 | 7,634 |
Other non-cash transactions | (1,089) | (1,260) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 11,564 | (7,830) |
Inventory | 101 | 1,084 |
Other assets | 2,280 | 4,637 |
Accounts payable | 3,221 | 17 |
Accrued compensation | (3,934) | 6,465 |
Accrued clinical trial expenses | (1,275) | 5,250 |
Other accrued expenses | 2,388 | 2,831 |
Interest payable | (54) | (54) |
Liability related to refundable upfront payment | 0 | 12,500 |
Deferred revenue | (3,887) | (7,704) |
Other liabilities | 1,000 | (725) |
Net cash used in operating activities | (93,089) | (37,252) |
Cash flows from investing activities: | ||
Purchases of investments | (121,135) | (72,806) |
Maturities of investments | 147,558 | 107,363 |
Sales of investments | 8,823 | 0 |
Purchases of property, plant and equipment | (6,344) | (3,234) |
Net cash provided by investing activities | 28,902 | 31,323 |
Cash flows from financing activities: | ||
Payment of capital lease obligations | (1,369) | (3,517) |
Proceeds from shares issued under equity compensation plans | 22,016 | 9,643 |
Net cash provided by financing activities | 20,647 | 6,126 |
Effect of exchange rates on cash and cash equivalents | 49 | (91) |
Net (decrease) increase in cash and cash equivalents | (43,491) | 106 |
Cash and cash equivalents at beginning of period | 59,640 | 55,570 |
Cash and cash equivalents at end of period | 16,149 | 55,676 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 10,010 | $ 10,448 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1 — Organization and Summary of Significant Accounting Policies Organization We are a research-based biopharmaceutical company headquartered in San Francisco, California and incorporated in Delaware. We are developing a pipeline of drug candidates that utilize our advanced polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Our research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. Our research and development activities have required significant ongoing investment to date and are expected to continue to require significant investment. As a result, we expect to continue to incur substantial losses and negative cash flows from operations in the future. We have financed our operations primarily through cash generated from licensing, collaboration and manufacturing agreements and financing transactions. At June 30, 2017, we had approximately $310.7 million in cash and investments in marketable securities. Also, as of June 30, 2017, we had $253.8 million in debt, including $250.0 million in principal of senior secured notes and $3.8 million of capital lease obligations, of which $2.7 million is current. Basis of Presentation and Principles of Consolidation Our consolidated financial statements include the financial position, results of operations and cash flows of our wholly-owned subsidiaries: Nektar Therapeutics (India) Private Limited (Nektar India) and Nektar Therapeutics UK Limited. All intercompany accounts and transactions have been eliminated in consolidation. We prepared our Condensed Consolidated Financial Statements following the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (GAAP) for annual periods can be condensed or omitted. In the opinion of management, these financial statements include all normal and recurring adjustments that we consider necessary for the fair presentation of our financial position and operating results. Our Condensed Consolidated Financial Statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar will affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting our consolidated financial results. Translation gains and losses are included in accumulated other comprehensive loss in the stockholders’ equity section of the Condensed Consolidated Balance Sheets. To date, such cumulative currency translation adjustments have not been significant to our consolidated financial position. Our comprehensive loss consists of our net loss plus our foreign currency translation gains and losses and unrealized holding gains and losses on available-for-sale securities, neither of which were significant during the three and six months ended June 30, 2017 and 2016. In addition, there were no significant reclassifications out of accumulated other comprehensive loss to the statements of operations during the three and six months ended June 30, 2017 and 2016. The accompanying Condensed Consolidated Financial Statements are unaudited. The Condensed Consolidated Balance Sheet data as of December 31, 2016 was derived from the audited consolidated financial statements which are included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and the accompanying notes to those financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. Revenue, expenses, assets, and liabilities can vary during each quarter of the year. The results and trends in these interim Condensed Consolidated Financial Statements are not necessarily indicative of the results to be expected for the full year or any other period. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accounting estimates and assumptions are inherently uncertain. Actual results could differ materially from those estimates and assumptions. Our estimates include those related to estimated selling prices of deliverables in collaboration agreements, estimated periods of performance, the net realizable value of inventory, the impairment of investments, the impairment of goodwill and long-lived assets, contingencies, accrued clinical trial expenses, estimated non-cash royalty revenue and non-cash interest expense from our liability related to our sale of future royalties, stock-based compensation, and ongoing litigation, among other estimates. We base our estimates on historical experience and on other assumptions that management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. As appropriate, estimates are assessed each period and updated to reflect current information and any changes in estimates will generally be reflected in the period first identified. Reclassifications Certain items previously reported in specific financial statement captions have been reclassified to conform to the current period presentation, including as a result of the adoption of new accounting guidance related to the classification of deferred tax assets described below. Such reclassifications do not materially impact previously reported revenue, operating loss, net loss, total assets, liabilities or stockholders’ equity. Segment Information We operate in one business segment which focuses on applying our technology platform to improve the performance of established drugs and to develop novel drug candidates. Our business offerings have similar economics and other characteristics, including the nature of products and manufacturing processes, types of customers, distribution methods and regulatory environment. We are comprehensively managed as one business segment by our Chief Executive Officer. Significant Concentrations Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S. and Europe. Our accounts receivable balance contains billed and unbilled trade receivables from product sales, milestones, other contingent payments and royalties, as well as reimbursable costs from collaborative research and development agreements. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We generally do not require collateral from our customers. We perform a regular review of our customers’ payment histories and associated credit risk. We have not experienced significant credit losses from our accounts receivable and our allowance for doubtful accounts was not significant at either June 30, 2017 or December 31, 2016. We are dependent on our suppliers and contract manufacturers to provide raw materials, drugs and devices of appropriate quality and reliability and to meet applicable contract and regulatory requirements. In certain cases, we rely on single sources of supply of one or more critical materials. Consequently, in the event that supplies are delayed or interrupted for any reason, our ability to develop and produce our drug candidates or our ability to meet our supply obligations could be significantly impaired, which could have a material adverse effect on our business, financial condition and results of operations. Revenue Recognition Our revenue is derived from our arrangements with pharmaceutical and biotechnology collaboration partners and may result from one or more of the following: upfront and license fees, payments for contract research and development, milestone and other contingent payments, manufacturing and supply payments, and royalties. Our performance obligations under our collaborations may include licensing our intellectual property, manufacturing and supply obligations, and research and development obligations. In order to account for the multiple-element arrangements, we identify the deliverables included within the arrangement and evaluate which deliverables represent separate units of accounting. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver goods or services, a right or license to use an asset, or another performance obligation. Revenue is recognized separately for each identified unit of accounting when the basic revenue recognition criteria are met: there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. At the inception of each new multiple-element arrangement or the material modification of an existing multiple-element arrangement, we allocate all consideration received under multiple-element arrangements to all units of accounting based on the relative selling price method, generally based on our best estimate of selling price (ESP). The objective of ESP is to determine the price at which we would transact a sale if the product or service was sold on a stand-alone basis. We determine ESP for the elements in our collaboration arrangements by considering multiple factors including, but not limited to, technical complexity of the performance obligation and similarity of elements to those performed under previous arrangements. Since we apply significant judgment in arriving at the ESPs, any material change in our estimates would significantly affect the allocation of the total consideration to the different elements of a multiple element arrangement. Product sales Product sales are primarily derived from fixed price manufacturing and supply agreements with our collaboration partners. We have not experienced any significant returns from our customers. Royalty revenue Generally, we are entitled to royalties from our collaboration partners based on the net sales of their approved drugs that are marketed and sold in one or more countries where we hold royalty rights. We recognize royalty revenue when the cash is received or when the royalty amount to be received is estimable and collection is reasonably assured. With respect to the non-cash royalties related to sale of future royalties described in Note 4, revenue is recognized when estimable, otherwise, revenue is recognized during the period in which the related royalty report is received, which generally occurs in the quarter after the applicable product sales are made. License, collaboration and other revenue The amount of upfront fees and other payments received by us in license and collaboration arrangements that are allocated to continuing performance obligations, such as manufacturing and supply obligations, is deferred and generally recognized ratably over our expected performance period under each respective arrangement. We make our best estimate of the period over which we expect to fulfill our performance obligations, which may include technology transfer assistance, research activities, clinical development activities, and manufacturing activities from research and development through the commercialization of the product. Given the uncertainties of these collaboration arrangements and the drug development process, significant judgment is required to determine the duration of our performance periods and these estimates are periodically re-evaluated. Contingent consideration received from the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved, which we believe is consistent with the substance of our performance under our various license and collaboration agreements. A milestone is defined as an event (i) that can only be achieved based in whole or in part either on the entity’s performance or on the occurrence of a specific outcome resulting from the entity’s performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to the entity. A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with our performance required to achieve the milestone or the increase in value to the collaboration resulting from our performance, relates solely to our past performance, and is reasonable relative to all of the other deliverables and payments within the arrangement. Our license and collaboration agreements with our partners provide for payments to us upon the achievement of development milestones, such as the completion of clinical trials or regulatory submissions, approvals by regulatory authorities, and commercial launches of drugs. Given the challenges inherent in developing and obtaining regulatory approval for drug products and in achieving commercial launches, there was substantial uncertainty whether any such milestones would be achieved at the time of execution of these licensing and collaboration agreements. In addition, we evaluated whether the development milestones met the remaining criteria to be considered substantive. As a result of our analysis, we consider our remaining development milestones under all of our license and collaboration agreements to be substantive and, accordingly, we expect to recognize as revenue future payments received from each milestone only if and as such milestone is achieved. Our license and collaboration agreements with certain partners also provide for contingent payments to us based solely upon the performance of the respective partner. For such contingent amounts, we expect to recognize the payments as revenue when earned under the applicable contract, which is generally upon completion of performance by the respective partner, provided that collection is reasonably assured. Our license and collaboration agreements with our partners also provide for payments to us upon the achievement of specified annual sales volumes of approved drugs. We consider these payments to be similar to royalty payments and we will recognize such sales-based payments upon achievement of such annual sales volumes, provided that collection is reasonably assured. Research and Development Expense Research and development costs are expensed as incurred and include salaries, benefits and other operating costs such as outside services, supplies and allocated overhead costs. We perform research and development for our proprietary drug candidates and technology development and for certain third parties under collaboration agreements. For our proprietary drug candidates and our internal technology development programs, we invest our own funds without reimbursement from a third party. Where we perform research and development activities under a clinical joint development collaboration, such as our collaboration with Bristol-Myers Squibb, we record the cost reimbursement from our partner as a reduction to research and development expense when reimbursement amounts are due to us under the agreement. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the start-up and reporting phases of the clinical trials ratably over the estimated duration of the start-up and reporting phases. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. In specific circumstances, such as for certain time-based costs, we recognize clinical trial expenses using a methodology that we consider to be more reflective of the timing of costs incurred. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified. Long-Lived Assets We assess the impairment of long-lived assets, primarily property, plant and equipment and goodwill, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the carrying value of the asset with its fair value, as measured by the anticipated undiscounted net cash flows associated with the asset. In the case of goodwill impairment, we perform an impairment test at least annually, on October 1 of each year, and market capitalization is generally used as the measure of fair value. If an impairment in value exists, the asset is written down to its estimated fair value. Income Taxes For the three and six months ended June 30, 2017 and 2016, we recorded an income tax provision for our Nektar India operations at an effective tax rate of approximately 35%. The U.S. federal deferred tax assets generated from our net operating losses have been fully reserved, as we believe it is not more likely than not that the benefit will be realized. Adoption of New Accounting Principles In March 2016, the Financial Accounting Standards Board (FASB) issued guidance to simplify several aspects of employee share-based payment accounting, including forfeitures, income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance was effective for our interim and annual periods beginning January 1, 2017. As a result of the adoption of this guidance, as of January 1, 2017, we recorded a $0.2 million charge to our accumulated deficit in our Condensed Consolidated Balance Sheet related to our election to recognize forfeitures of awards as they occur. In addition, prior to adoption of this guidance, tax attributes related to stock option windfall deductions were not recorded until they resulted in a reduction of cash tax payable. As of December 31, 2016, the excluded windfall deductions for federal and state purposes were $20.6 million and $9.8 million, respectively. Upon adoption, we recognized the excluded windfall deductions as a deferred tax asset on a tax-effected basis with a corresponding increase in the valuation allowance. In November 2015, the FASB issued guidance to require that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. Previous guidance required deferred tax assets and liabilities to be separated into current and noncurrent amounts on the balance sheet. Accordingly, as of January 1, 2017, we reclassified $0.3 million from other current assets to our other assets balance. This reclassification was applied retrospectively to these balances in our Condensed Consolidated Balance Sheet as of December 31, 2016. Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified in Accounting Standards Codification (ASC) 606, Revenue Recognition — Revenue from Contracts with Customers Revenue Recognition In February 2016, the FASB issued guidance to amend a number of aspects of lease accounting, including requiring lessees to recognize almost all leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. The guidance will become effective for us beginning in the first quarter of 2019 and is required to be adopted using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard. |
Cash and Investments in Marketa
Cash and Investments in Marketable Securities | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Cash and Investments in Marketable Securities | Note 2 — Cash and Investments in Marketable Securities Cash and investments in marketable securities, including cash equivalents, are as follows (in thousands): Estimated Fair Value at June 30, 2017 December 31, 2016 Cash and cash equivalents $ 16,149 $ 59,640 Short-term investments 249,398 329,462 Long-term investments 45,160 — Total cash and investments in marketable securities $ 310,707 $ 389,102 We invest in liquid, high quality debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of June 30, 2017, $45.2 million of our total investments had maturities greater than one year and as of December 31, 2016, all of our investments had maturities of one year or less. Gross unrealized gains and losses were not significant at either June 30, 2017 or December 31, 2016. During the six months ended June 30, 2017, we sold available-for-sale securities totaling $8.8 million and gross realized gains and losses on those sales were not significant. During the three months ended June 30, 2017 and the three and six months ended June 30, 2016, we did not sell any of our available-for-sale securities. The cost of securities sold is based on the specific identification method. Under the terms of our 7.75% senior secured notes due October 2020, we are required to maintain a minimum cash and investments in marketable securities balance of $60.0 million. Our portfolio of cash and investments in marketable securities includes (in thousands): Estimated Fair Value at Fair Value Hierarchy Level June 30, 2017 December 31, 2016 Corporate notes and bonds 2 $ 163,598 $ 156,044 Corporate commercial paper 2 123,787 160,920 Obligations of U.S. government agencies 2 4,243 13,749 Available-for-sale investments 291,628 330,713 Money market funds 1 14,553 51,104 Certificate of deposit N/A 2,930 2,930 Cash N/A 1,596 4,355 Total cash and investments in marketable securities $ 310,707 $ 389,102 Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. All of our investments are categorized as Level 1 or Level 2, as explained in the table above. We use a market approach to value our Level 2 investments. The disclosed fair value related to our investments is based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. During the three and six months ended June 30, 2017 and 2016, there were no transfers between Level 1 and Level 2 of the fair value hierarchy. Additionally, as of June 30, 2017, based on a discounted cash flow analysis using Level 3 inputs including financial discount rates, we believe the $250.0 million in principal amount of our 7.75% senior secured notes due October 2020 is consistent with its fair value. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 — Inventory Inventory consists of the following (in thousands): June 30, 2017 December 31, 2016 Raw materials $ 1,543 $ 2,055 Work-in-process 7,207 7,311 Finished goods 2,258 1,743 Total inventory $ 11,008 $ 11,109 Inventory is generally manufactured upon receipt of firm purchase orders from our collaboration partners. Inventory includes direct materials, direct labor, and manufacturing overhead and cost is determined on a first-in, first-out basis. Inventory is valued at the lower of cost or net realizable value and defective or excess inventory is written down to net realizable value based on historical experience or projected usage. |
Liability Related to the Sale o
Liability Related to the Sale of Future Royalties | 6 Months Ended |
Jun. 30, 2017 | |
Liability Related To Sale Of Potential Future Royalties [Abstract] | |
Liability Related to Sale of Future Royalties | Note 4 — Liability Related to Sale of Future Royalties On February 24, 2012, we entered into a Purchase and Sale Agreement (the Purchase and Sale Agreement) with RPI Finance Trust (RPI), an affiliate of Royalty Pharma, pursuant to which we sold, and RPI purchased, our right to receive royalty payments (the Royalty Entitlement) arising from the worldwide net sales, from and after January 1, 2012, of (a) CIMZIA ® ® ® ® ® ® ® ® Since its inception, our estimate of the total interest expense on the Royalty Obligation resulted in an effective annual interest rate of approximately 17%. We periodically assess the estimated royalty payments to RPI from UCB and Roche and to the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different from our original estimates, we will prospectively adjust the amortization of the Royalty Obligation. The Purchase and Sale Agreement grants RPI the right to receive certain reports and other information relating to the Royalty Entitlement and contains other representations and warranties, covenants and indemnification obligations that are customary for a transaction of this nature. To our knowledge, we are currently in compliance with these provisions of the Purchase and Sale Agreement; however, if we were to breach our obligations, we could be required to pay damages to RPI that are not limited to the purchase price we received in the sale transaction. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5 — Commitments and Contingencies Legal Matters From time to time, we are involved in lawsuits, arbitrations, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are reviewed at least quarterly and adjusted to reflect the impact of settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling were to occur in any specific period, there exists the possibility of a material adverse impact on the results of our operations of that period and on our cash flows and liquidity. On August 14, 2015, Enzon, Inc. filed a breach of contract complaint in the Supreme Court of the State of New York (Court) claiming damages of $1.5 million (plus interest) for unpaid licensing fees (the “Enzon Litigation”) through the date of the complaint. Enzon alleged that we failed to pay a post-patent expiration immunity fee related to one of the licenses. Following a hearing held on December 21, 2015, the Court granted Nektar’s motion to dismiss the Enzon complaint. Enzon filed an appeal to the Court’s dismissal decision. On October 25, 2016, the Supreme Court of the State of New York, Appellate Division, reversed the earlier decision by the Court granting Nektar’s motion to dismiss the Enzon complaint. As a result, the case was remanded to the Court for further proceedings. On June 26, 2017, we entered into a Second Amendment to the Cross-License and Option Agreement (Cross-License Agreement) with Enzon in which we agreed to pay Enzon a sum of $7.0 million to satisfy all past and future obligations of royalty payments pursuant to the Cross-License Agreement and to have the Enzon Litigation dismissed. The Enzon Litigation was dismissed with prejudice on June 30, 2017. We paid $3.5 million in June 2017. We will pay the remaining $3.5 million in January 2018, which is included in other current liabilities on our Condensed Consolidated Balance Sheet as of June 30, 2017. Of the total $7.0 million consideration, $1.4 million represents our accrued royalty liability to Enzon related to commercial sales of certain products from January 2017 through June 2017 recorded in cost of goods sold for the six months ended June 30, 2017. In addition, $2.3 million is recorded as a prepaid royalty asset in other current assets as of June 30, 2017 for estimated future commercial sales of certain products through the term of the applicable underlying Enzon patents expiring in March 2018, which Nektar will amortize over this period. We recorded the remaining $3.3 million of consideration in general and administrative expense in the three months ended June 30, 2017 . Indemnifications in Connection with Commercial Agreements As part of our collaboration agreements with our partners related to the license, development, manufacture and supply of drugs based on our proprietary technologies and drug candidates, we generally agree to defend, indemnify and hold harmless our partners from and against third party liabilities arising out of the agreement, including product liability (with respect to our activities) and infringement of intellectual property to the extent the intellectual property is developed by us and licensed to our partners. The term of these indemnification obligations is generally perpetual any time after execution of the agreement. There is generally no limitation on the potential amount of future payments we could be required to make under these indemnification obligations. From time to time, we enter into other strategic agreements such as divestitures and financing transactions pursuant to which we are required to make representations and warranties and undertake to perform or comply with certain covenants. In the event it is determined that we breached certain of the representations and warranties or covenants made by us in any such agreements, we could incur substantial indemnification liabilities depending on the timing, nature, and amount of any such claims. To date, we have not incurred costs to defend lawsuits or settle claims related to these indemnification obligations. Because the aggregate amount of any potential indemnification obligation is not a stated amount, the overall maximum amount of any such obligations cannot be reasonably estimated. No liabilities have been recorded for these obligations in our Condensed Consolidated Balance Sheets at either June 30, 2017 or December 31, 2016. |
License and Collaboration Agree
License and Collaboration Agreements | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
License and Collaboration Agreements | Note 6 — License and Collaboration Agreements We have entered into various collaboration agreements including license agreements and collaborative research, development and commercialization agreements with various pharmaceutical and biotechnology companies. Under these collaboration arrangements, we are entitled to receive license fees, upfront payments, milestone and other contingent payments, royalties, sales milestone payments, and payments for the manufacture and supply of our proprietary PEGylation materials and/or for research and development activities. All of our collaboration agreements are generally cancelable by our partners without significant financial penalty. Our costs of performing these services are generally included in research and development expense, except that costs for product sales to our collaboration partners are included in cost of goods sold. In accordance with our collaboration agreements, we recognized license, collaboration and other revenue as follows (in thousands): Three months ended June 30, Six months ended June 30, Partner Drug or Drug Candidate 2017 2016 2017 2016 AstraZeneca AB MOVANTIK ® and MOVANTIK ® combination program $ 1,600 $ — $ 4,600 $ 28,000 Amgen, Inc. Neulasta ® 1,250 1,250 2,500 2,500 Bayer Healthcare LLC BAY41-6551 (Amikacin Inhale) 357 357 714 714 Daiichi Sankyo Europe GmbH ONZEALD TM 216 3,258 431 3,258 Roche MIRCERA ® — 1,914 — 3,842 Baxalta Incorporated ADYNOVATE ® 45 207 45 313 Other 1,356 1,284 2,626 3,830 License, collaboration and other revenue $ 4,824 $ 8,270 $ 10,916 $ 42,457 As of June 30, 2017, our collaboration agreements with partners included potential future payments for development milestones totaling approximately $147.0 million, including amounts from our agreements with Daiichi, Bayer, Baxalta and Ophthotech described below. In addition, under our collaboration agreements we are entitled to receive contingent development payments and contingent sales milestones and royalty payments, including those related to MOVANTIK ® ® There have been no material changes to our collaboration agreements in the six months ended June 30, 2017, except as described below. AstraZeneca AB : MOVANTIK ® (naloxegol oxalate), previously referred to as naloxegol and NKTR-118, and MOVANTIK ® fixed-dose combination program, previously referred to as NKTR-119 We are a party to an agreement with AstraZeneca AB (AstraZeneca) under which we granted AstraZeneca a worldwide, exclusive license under our patents and other intellectual property to develop, market, and sell MOVANTIK ® ® ® ® ® ® ® ® On September 16, 2014, the United States Food and Drug Administration (FDA) approved MOVANTIK ® ® On March 1, 2016, AstraZeneca announced that it had entered into an agreement with ProStrakan Group plc, a subsidiary of Kyowa Hakko Kirin Co. Ltd. (Kirin), granting Kirin exclusive marketing rights to MOVENTIG ® ® ® In general, other than as described above and in this paragraph, AstraZeneca has full responsibility for all research, development and commercialization costs under our license agreement. As part of its approval of MOVANTIK ® ® ® Daiichi Sankyo Europe GmbH : ONZEALD TM (etirinotecan pegol), also referred to as NKTR-102 Effective May 30, 2016, we entered into a collaboration and license agreement with Daiichi Sankyo Europe GmbH, a German limited liability company (Daiichi), under which we granted Daiichi exclusive commercialization rights in the European Economic Area, Switzerland, and Turkey (collectively, the European Territory) to our proprietary product candidate ONZEALD™ (etirinotecan pegol), which is also known as NKTR-102, a long-acting topoisomerase I inhibitor in clinical development for the treatment of adult patients with advanced breast cancer who have brain metastases (BCBM). We retain all rights to ONZEALD™ in all countries outside the European Territory including the United States. Under the terms of the agreement and in consideration for the exclusive commercialization rights in the European Territory, Daiichi paid us a $20.0 million up-front payment in August 2016 and we will be eligible to receive up to an aggregate of $60.0 million in regulatory and commercial milestones, including a $10.0 million payment upon the first commercial sale of ONZEALD™ following conditional marketing approval by the European Commission (EC), a $25.0 million payment upon the first commercial sale following final marketing authorization approval of ONZEALD™ by the EC, and a $25.0 million sales milestone payment upon Daiichi’s first achievement of a certain specified annual net sales target. We are also eligible to receive a 20% royalty on net sales of ONZEALD™ by Daiichi in all countries in the European Territory except for net sales in Turkey where we are eligible to receive a 15% royalty. We will be responsible for supplying Daiichi with its requirements for ONZEALD™ on a fully burdened reimbursed cost basis. Daiichi will be responsible for all commercialization activities for ONZEALD™ in the European Territory and will bear all associated costs. In addition, we are responsible for funding and conducting a Phase 3 confirmatory trial in patients with BCBM which we call the ATTAIN study, which was initiated in the fourth quarter of 2016. On July 21, 2017, we were informed by the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) that it had adopted a negative opinion for the conditional marketing authorization application for ONZEALD ™ “CHMP Appeal” ™ Daiichi’s right to terminate the agreement prior to conditional approval, Daiichi would not exercise such right prior to the earlier of the conclusion of the CHMP Appeal process or a pre-specified date in the first half of 2018. If we are not successful with the CHMP Appeal, we would be obligated to pay Daiichi a $12.5 million termination payment. The $12.5 million contingent termination payment from us to Daiichi is recorded in our liability related to refundable upfront payment balance in our Condensed Consolidated Balance Sheet at June 30, 2017 and December 31, 2016. We identified our grant of the exclusive license to Daiichi on May 30, 2016 and our ongoing clinical and regulatory development service obligations as the significant, non-contingent deliverables under the agreement and determined that each represents a separate unit of accounting. We made our best estimate of the selling price for the license grant based on a discounted cash flow analysis of projected ONZEALD™ sales and estimated the selling price for the development services based on our experience with the costs of similar clinical studies and regulatory activities. Based on these estimates at agreement inception, we allocated the $7.5 million non-refundable portion of the $20.0 million upfront payment from Daiichi to these items based on their relative selling prices. As a result, in the three months ended June 30, 2016, we recognized a total of $3.3 million of revenue from this arrangement, primarily related to the delivery of the license. As of June 30, 2017, we have deferred revenue of approximately $3.4 million related to our development service obligations under this agreement, which we expect to recognize through May 2021, the estimated end of our development obligations. If the EC were to grant conditional marketing approval of ONZEALD™, the remaining $12.5 million portion of the upfront payment becomes non-refundable and we expect to allocate this amount between the license and development service obligation consistent with the estimated selling prices of these deliverables. The license related amount will be recognized immediately and the development service related amount will be recorded as deferred revenue and recognized ratably over the remaining obligation period. We determined that the milestones noted above payable to us by Daiichi upon the first commercial sale of ONZEALD™ following conditional marketing approval and following final marketing authorization approval of ONZEALD™ by the EC are substantive milestones that will be recognized if and when achieved. In addition, we determined that the sales milestone due to us upon Daiichi’s first achievement of a certain specified annual net sales target should be considered a contingent payment and will be recognized if and when achieved. Baxalta Incorporated : Hemophilia We are a party to an exclusive research, development, license and manufacturing and supply agreement with Baxalta Incorporated (Baxalta), a subsidiary of Shire plc, entered into in September 2005 to develop products designed to improve therapies for Hemophilia A patients using our PEGylation technology. Under the terms of the agreement, we are entitled to research and development funding and are responsible for supplying Baxalta with its requirements for our proprietary materials. Baxalta is responsible for all clinical development, regulatory, and commercialization expenses. This Hemophilia A program includes ADYNOVATE ® ® Roche : MIRCERA ® In February 2012, we entered into a toll-manufacturing agreement with Roche under which we agreed to manufacture the proprietary PEGylation material used by Roche to produce MIRCERA ® ® Amgen, Inc .: Neulasta® In October 2010, we amended and restated an existing supply and license agreement by entering into a supply, dedicated suite and manufacturing guarantee agreement (the amended and restated agreement) and a license agreement with Amgen Inc. and Amgen Manufacturing, Limited (together referred to as Amgen). Under the terms of the amended and restated agreement, we received a $50.0 million payment in the fourth quarter of 2010 in return for our guaranteeing the supply of certain quantities of our proprietary PEGylation materials to Amgen. As of June 30, 2017, we have deferred revenue of approximately $16.7 million related to this agreement, which we expect to recognize through October 2020, the estimated end of our obligations under this agreement. Bayer Healthcare LLC : BAY41-6551 (Amikacin Inhale) In August 2007, we entered into a co-development, license and co-promotion agreement with Bayer Healthcare LLC (Bayer) to develop a specially-formulated inhaled Amikacin. We are responsible for development and manufacturing and supply of our proprietary nebulizer device included in the Amikacin product. Bayer is responsible for most future clinical development and commercialization costs, all activities to support worldwide regulatory filings, approvals and related activities, further development of Amikacin Inhale and final product packaging and distribution. In April 2013, Bayer initiated a Phase 3 clinical trial in the treatment of intubated and mechanically ventilated patients with Gram-negative pneumonia. As of June 30, 2017, we have received an upfront payment of $40.0 million (which was paid to us in 2007) and milestone payments totaling $30.0 million (the last of which was paid to us in 2013). In addition, in June 2013, we made a $10.0 million payment to Bayer for the reimbursement of some of its costs of the Phase 3 clinical trial. We are entitled to receive a total of up to an additional $50.0 million of development milestones upon achievement of certain development objectives, including $22.5 million related to FDA approval, as well as sales milestones upon achievement of annual sales targets and royalties based on annual worldwide net sales of Amikacin Inhale. As of June 30, 2017, we have deferred revenue of approximately $17.1 million related to this agreement, which we expect to recognize through June 2029, the estimated end of our obligations under this agreement. Ophthotech Corporation : Fovista ® We are a party to an agreement with Ophthotech Corporation (Ophthotech), dated September 30, 2006, under which Ophthotech received a worldwide, exclusive license to certain of our proprietary PEGylation technology to develop, manufacture and sell Fovista ® ® ® On December 12, 2016, Ophthotech announced that its two pivotal Phase 3 clinical trials investigating the superiority of Fovista ® ® ® ® ® ® ® ® Based on successful clinical study outcomes, we are entitled to additional payments based upon Ophthotech’s potential achievement of certain regulatory milestones. If commercialized, we are also entitled to royalties on net sales of Fovista ® Bristol-Myers Squibb : NKTR-214 On September 21, 2016, we entered into a Clinical Trial Collaboration Agreement (BMS Agreement) with Bristol-Myers Squibb Company, a Delaware corporation (BMS), pursuant to which we and BMS are collaborating to conduct Phase 1/2 clinical trials evaluating our IL-2-based CD122-biased agonist, known as NKTR-214, and BMS’ human monoclonal antibody that binds PD-1, known as ® nivolumab) We are acting as the sponsor of each Combination Therapy Trial. Under the BMS Agreement, BMS is responsible for 50% of all out-of-pocket costs reasonably incurred in connection with third party contract research organizations, laboratories, clinical sites and institutional review boards and we record cost reimbursement payments to us from BMS as a reduction to research and development expense. Each party will otherwise be responsible for its own internal costs, including internal personnel costs, incurred in connection with each Combination Therapy Trial. Nektar and BMS will use commercially reasonable efforts to manufacture and supply NKTR-214 and Opdivo ® Ownership of, and global commercial rights to, NKTR-214 remain solely with us under the BMS Agreement. If we wish to license the right to commercialize NKTR-214 in one of certain major market territories prior to September 30, 2018 (Exclusivity Expiration Date), we must first negotiate with BMS, for a period of three months (Negotiation Period), to grant an exclusive license to develop and commercialize NKTR-214 in any of these major market territories. If we do not reach an agreement with BMS for an exclusive license within the Negotiation Period, we will be free to license any right to NKTR-214 to other parties in any territory worldwide except that in the event that we receive a license offer from a third party during a period of 90 calendar days after the end of the Negotiation Period, we will provide BMS ten business days to match the terms of such third-party offer. After the Exclusivity Expiration Date, we are free to license NKTR-214 without any further obligation to BMS. Each party grants to the other party a non-exclusive, worldwide (subject to certain exceptions in the case of the license granted by BMS), non-transferable and royalty-free research and development license to such licensing party’s patent rights, technology and regulatory documentation to use its compound solely to the extent necessary to discharge its obligations under the BMS Agreement with respect to the conduct of the Combination Therapy Trials. Other In addition, as of June 30, 2017, we have a number of other collaboration agreements, including with our collaboration partners UCB and Halozyme, under which we are entitled to up to a total of $45.5 million of development milestone payments upon achievement of certain development objectives, as well as sales milestones upon achievement of annual sales targets and royalties based on net sales of commercialized products, if any. However, given the current phase of development of the potential products under these collaboration agreements, we cannot estimate the probability or timing of achieving these milestones. As of June 30, 2017, we have deferred revenue of approximately $6.8 million related to these other collaboration agreements, which we expect to recognize through 2020, the estimated end of our obligations under those agreements. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 7 — Stock-Based Compensation Total stock-based compensation expense was recognized in our Condensed Consolidated Statements of Operations as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Cost of goods sold $ 538 $ 402 $ 1,092 $ 790 Research and development 4,620 3,125 9,217 6,324 General and administrative 2,941 2,737 5,974 5,513 Total stock-based compensation $ 8,099 $ 6,264 $ 16,283 $ 12,627 During the three months ended June 30, 2017 and 2016, we granted 956,160 and 589,090 stock options, respectively, and these options had a weighted average grant-date fair value of $8.96 per share and $7.22 per share, respectively. During the six months ended June 30, 2017 and 2016, we granted 1,285,020 and 789,290 stock options, respectively, and these options had a weighted average grant-date fair value of $8.70 per share and $6.88 per share, respectively. We granted no RSUs during the three and six months ended June 30, 2017 and 2,000 RSUs were granted in the three and six months ended June 30, 2016. As a result of stock issuances under our equity compensation plans, during the three months ended June 30, 2017 and 2016, we issued 1,130,164 and 451,391 shares of our common stock, respectively, and during the six months ended June 30, 2017 and 2016, we issued 2,648,769 and 1,313,937 shares of our common stock, respectively. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 8 — Net Loss Per Share Basic net loss per share is calculated based on the weighted-average number of common shares outstanding during the periods presented. For all periods presented in the accompanying Condensed Consolidated Statements of Operations, the net loss available to common stockholders is equal to the reported net loss. Basic and diluted net loss per share are the same due to our historical net losses and the requirement to exclude potentially dilutive securities which would have an anti-dilutive effect on net loss per share. During the three and six months ended June 30, 2017 and 2016, potentially dilutive securities consisted of common shares underlying outstanding stock options and RSUs. During the three months ended June 30, 2017 and 2016, there were weighted average outstanding stock options and RSUs of 20.2 million and 19.4 million shares, respectively, and during the six months ended June 30, 2017 and 2016, there were weighted average outstanding stock options and RSUs of 20.7 million and 19.6 million shares, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 — Subsequent Events On July 24, 2017, we announced that we entered into a worldwide license agreement to co-develop NKTR-358 Eli Lilly and Company On August 4, 2017, we entered into a Lease Agreement (Lease) with ARE-San Francisco No. 19, LLC (ARE) for 128,793 square feet of space located at 455 Mission Bay Boulevard, San Francisco, California (the “Mission Bay Facility”). The Lease will allow us to continue using the same site we currently use for our San Francisco-based R&D activities following the expiration of our current sublease with Pfizer Inc., which sublease is set to terminate no later than the end of January 2020. The term of the Lease will commence on February 1, 2020, and will expire January 31, 2030. The monthly base rent for the Mission Bay Facility is $611,767, which is subject to an annual rent adjustment rate of 3%. During the term of the Lease, Nektar is responsible for paying its share of operating expenses specified in the Lease, including insurance costs and taxes. The Lease also provides Nektar with a potential to increase the space leased by us at the Mission Bay Facility location by approximately 24,000 square feet, in accordance with the terms of Lease. The Lease includes various covenants, indemnities, defaults, termination rights, security deposits and other provisions customary for lease transactions of this nature. The foregoing summary is qualified in its entirety by reference to the Lease, which will be filed as an exhibit to Nektar’s next Quarterly Report on Form 10-Q for the period ended September 30, 2017. |
Organization and Summary of S16
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization We are a research-based biopharmaceutical company headquartered in San Francisco, California and incorporated in Delaware. We are developing a pipeline of drug candidates that utilize our advanced polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Our research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. Our research and development activities have required significant ongoing investment to date and are expected to continue to require significant investment. As a result, we expect to continue to incur substantial losses and negative cash flows from operations in the future. We have financed our operations primarily through cash generated from licensing, collaboration and manufacturing agreements and financing transactions. At June 30, 2017, we had approximately $310.7 million in cash and investments in marketable securities. Also, as of June 30, 2017, we had $253.8 million in debt, including $250.0 million in principal of senior secured notes and $3.8 million of capital lease obligations, of which $2.7 million is current. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Our consolidated financial statements include the financial position, results of operations and cash flows of our wholly-owned subsidiaries: Nektar Therapeutics (India) Private Limited (Nektar India) and Nektar Therapeutics UK Limited. All intercompany accounts and transactions have been eliminated in consolidation. We prepared our Condensed Consolidated Financial Statements following the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (GAAP) for annual periods can be condensed or omitted. In the opinion of management, these financial statements include all normal and recurring adjustments that we consider necessary for the fair presentation of our financial position and operating results. Our Condensed Consolidated Financial Statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar will affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting our consolidated financial results. Translation gains and losses are included in accumulated other comprehensive loss in the stockholders’ equity section of the Condensed Consolidated Balance Sheets. To date, such cumulative currency translation adjustments have not been significant to our consolidated financial position. Our comprehensive loss consists of our net loss plus our foreign currency translation gains and losses and unrealized holding gains and losses on available-for-sale securities, neither of which were significant during the three and six months ended June 30, 2017 and 2016. In addition, there were no significant reclassifications out of accumulated other comprehensive loss to the statements of operations during the three and six months ended June 30, 2017 and 2016. The accompanying Condensed Consolidated Financial Statements are unaudited. The Condensed Consolidated Balance Sheet data as of December 31, 2016 was derived from the audited consolidated financial statements which are included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and the accompanying notes to those financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. Revenue, expenses, assets, and liabilities can vary during each quarter of the year. The results and trends in these interim Condensed Consolidated Financial Statements are not necessarily indicative of the results to be expected for the full year or any other period. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accounting estimates and assumptions are inherently uncertain. Actual results could differ materially from those estimates and assumptions. Our estimates include those related to estimated selling prices of deliverables in collaboration agreements, estimated periods of performance, the net realizable value of inventory, the impairment of investments, the impairment of goodwill and long-lived assets, contingencies, accrued clinical trial expenses, estimated non-cash royalty revenue and non-cash interest expense from our liability related to our sale of future royalties, stock-based compensation, and ongoing litigation, among other estimates. We base our estimates on historical experience and on other assumptions that management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. As appropriate, estimates are assessed each period and updated to reflect current information and any changes in estimates will generally be reflected in the period first identified. |
Reclassifications | Reclassifications Certain items previously reported in specific financial statement captions have been reclassified to conform to the current period presentation, including as a result of the adoption of new accounting guidance related to the classification of deferred tax assets described below. Such reclassifications do not materially impact previously reported revenue, operating loss, net loss, total assets, liabilities or stockholders’ equity. |
Segment Information | Segment Information We operate in one business segment which focuses on applying our technology platform to improve the performance of established drugs and to develop novel drug candidates. Our business offerings have similar economics and other characteristics, including the nature of products and manufacturing processes, types of customers, distribution methods and regulatory environment. We are comprehensively managed as one business segment by our Chief Executive Officer. |
Significant Concentrations | Significant Concentrations Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S. and Europe. Our accounts receivable balance contains billed and unbilled trade receivables from product sales, milestones, other contingent payments and royalties, as well as reimbursable costs from collaborative research and development agreements. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We generally do not require collateral from our customers. We perform a regular review of our customers’ payment histories and associated credit risk. We have not experienced significant credit losses from our accounts receivable and our allowance for doubtful accounts was not significant at either June 30, 2017 or December 31, 2016. We are dependent on our suppliers and contract manufacturers to provide raw materials, drugs and devices of appropriate quality and reliability and to meet applicable contract and regulatory requirements. In certain cases, we rely on single sources of supply of one or more critical materials. Consequently, in the event that supplies are delayed or interrupted for any reason, our ability to develop and produce our drug candidates or our ability to meet our supply obligations could be significantly impaired, which could have a material adverse effect on our business, financial condition and results of operations. |
Revenue Recognition | Revenue Recognition Our revenue is derived from our arrangements with pharmaceutical and biotechnology collaboration partners and may result from one or more of the following: upfront and license fees, payments for contract research and development, milestone and other contingent payments, manufacturing and supply payments, and royalties. Our performance obligations under our collaborations may include licensing our intellectual property, manufacturing and supply obligations, and research and development obligations. In order to account for the multiple-element arrangements, we identify the deliverables included within the arrangement and evaluate which deliverables represent separate units of accounting. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver goods or services, a right or license to use an asset, or another performance obligation. Revenue is recognized separately for each identified unit of accounting when the basic revenue recognition criteria are met: there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. At the inception of each new multiple-element arrangement or the material modification of an existing multiple-element arrangement, we allocate all consideration received under multiple-element arrangements to all units of accounting based on the relative selling price method, generally based on our best estimate of selling price (ESP). The objective of ESP is to determine the price at which we would transact a sale if the product or service was sold on a stand-alone basis. We determine ESP for the elements in our collaboration arrangements by considering multiple factors including, but not limited to, technical complexity of the performance obligation and similarity of elements to those performed under previous arrangements. Since we apply significant judgment in arriving at the ESPs, any material change in our estimates would significantly affect the allocation of the total consideration to the different elements of a multiple element arrangement. Product sales Product sales are primarily derived from fixed price manufacturing and supply agreements with our collaboration partners. We have not experienced any significant returns from our customers. Royalty revenue Generally, we are entitled to royalties from our collaboration partners based on the net sales of their approved drugs that are marketed and sold in one or more countries where we hold royalty rights. We recognize royalty revenue when the cash is received or when the royalty amount to be received is estimable and collection is reasonably assured. With respect to the non-cash royalties related to sale of future royalties described in Note 4, revenue is recognized when estimable, otherwise, revenue is recognized during the period in which the related royalty report is received, which generally occurs in the quarter after the applicable product sales are made. License, collaboration and other revenue The amount of upfront fees and other payments received by us in license and collaboration arrangements that are allocated to continuing performance obligations, such as manufacturing and supply obligations, is deferred and generally recognized ratably over our expected performance period under each respective arrangement. We make our best estimate of the period over which we expect to fulfill our performance obligations, which may include technology transfer assistance, research activities, clinical development activities, and manufacturing activities from research and development through the commercialization of the product. Given the uncertainties of these collaboration arrangements and the drug development process, significant judgment is required to determine the duration of our performance periods and these estimates are periodically re-evaluated. Contingent consideration received from the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved, which we believe is consistent with the substance of our performance under our various license and collaboration agreements. A milestone is defined as an event (i) that can only be achieved based in whole or in part either on the entity’s performance or on the occurrence of a specific outcome resulting from the entity’s performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to the entity. A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with our performance required to achieve the milestone or the increase in value to the collaboration resulting from our performance, relates solely to our past performance, and is reasonable relative to all of the other deliverables and payments within the arrangement. Our license and collaboration agreements with our partners provide for payments to us upon the achievement of development milestones, such as the completion of clinical trials or regulatory submissions, approvals by regulatory authorities, and commercial launches of drugs. Given the challenges inherent in developing and obtaining regulatory approval for drug products and in achieving commercial launches, there was substantial uncertainty whether any such milestones would be achieved at the time of execution of these licensing and collaboration agreements. In addition, we evaluated whether the development milestones met the remaining criteria to be considered substantive. As a result of our analysis, we consider our remaining development milestones under all of our license and collaboration agreements to be substantive and, accordingly, we expect to recognize as revenue future payments received from each milestone only if and as such milestone is achieved. Our license and collaboration agreements with certain partners also provide for contingent payments to us based solely upon the performance of the respective partner. For such contingent amounts, we expect to recognize the payments as revenue when earned under the applicable contract, which is generally upon completion of performance by the respective partner, provided that collection is reasonably assured. Our license and collaboration agreements with our partners also provide for payments to us upon the achievement of specified annual sales volumes of approved drugs. We consider these payments to be similar to royalty payments and we will recognize such sales-based payments upon achievement of such annual sales volumes, provided that collection is reasonably assured. |
Research and Development Expense | Research and Development Expense Research and development costs are expensed as incurred and include salaries, benefits and other operating costs such as outside services, supplies and allocated overhead costs. We perform research and development for our proprietary drug candidates and technology development and for certain third parties under collaboration agreements. For our proprietary drug candidates and our internal technology development programs, we invest our own funds without reimbursement from a third party. Where we perform research and development activities under a clinical joint development collaboration, such as our collaboration with Bristol-Myers Squibb, we record the cost reimbursement from our partner as a reduction to research and development expense when reimbursement amounts are due to us under the agreement. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the start-up and reporting phases of the clinical trials ratably over the estimated duration of the start-up and reporting phases. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. In specific circumstances, such as for certain time-based costs, we recognize clinical trial expenses using a methodology that we consider to be more reflective of the timing of costs incurred. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified. |
Long-Lived Assets | Long-Lived Assets We assess the impairment of long-lived assets, primarily property, plant and equipment and goodwill, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the carrying value of the asset with its fair value, as measured by the anticipated undiscounted net cash flows associated with the asset. In the case of goodwill impairment, we perform an impairment test at least annually, on October 1 of each year, and market capitalization is generally used as the measure of fair value. If an impairment in value exists, the asset is written down to its estimated fair value. |
Income Taxes | Income Taxes For the three and six months ended June 30, 2017 and 2016, we recorded an income tax provision for our Nektar India operations at an effective tax rate of approximately 35%. The U.S. federal deferred tax assets generated from our net operating losses have been fully reserved, as we believe it is not more likely than not that the benefit will be realized. |
Adoption of New Accounting Principle | Adoption of New Accounting Principles In March 2016, the Financial Accounting Standards Board (FASB) issued guidance to simplify several aspects of employee share-based payment accounting, including forfeitures, income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance was effective for our interim and annual periods beginning January 1, 2017. As a result of the adoption of this guidance, as of January 1, 2017, we recorded a $0.2 million charge to our accumulated deficit in our Condensed Consolidated Balance Sheet related to our election to recognize forfeitures of awards as they occur. In addition, prior to adoption of this guidance, tax attributes related to stock option windfall deductions were not recorded until they resulted in a reduction of cash tax payable. As of December 31, 2016, the excluded windfall deductions for federal and state purposes were $20.6 million and $9.8 million, respectively. Upon adoption, we recognized the excluded windfall deductions as a deferred tax asset on a tax-effected basis with a corresponding increase in the valuation allowance. In November 2015, the FASB issued guidance to require that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. Previous guidance required deferred tax assets and liabilities to be separated into current and noncurrent amounts on the balance sheet. Accordingly, as of January 1, 2017, we reclassified $0.3 million from other current assets to our other assets balance. This reclassification was applied retrospectively to these balances in our Condensed Consolidated Balance Sheet as of December 31, 2016. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified in Accounting Standards Codification (ASC) 606, Revenue Recognition — Revenue from Contracts with Customers Revenue Recognition In February 2016, the FASB issued guidance to amend a number of aspects of lease accounting, including requiring lessees to recognize almost all leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. The guidance will become effective for us beginning in the first quarter of 2019 and is required to be adopted using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard. |
Inventory | Inventory is valued at the lower of cost or net realizable value and defective or excess inventory is written down to net realizable value based on historical experience or projected usage. |
Liability Related to Sale of Future Royalties | We periodically assess the estimated royalty payments to RPI from UCB and Roche and to the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different from our original estimates, we will prospectively adjust the amortization of the Royalty Obligation. |
Cash and Investments in Marke17
Cash and Investments in Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Cash and Investments in Marketable Securities, Including Cash Equivalents | Cash and investments in marketable securities, including cash equivalents, are as follows (in thousands): Estimated Fair Value at June 30, 2017 December 31, 2016 Cash and cash equivalents $ 16,149 $ 59,640 Short-term investments 249,398 329,462 Long-term investments 45,160 — Total cash and investments in marketable securities $ 310,707 $ 389,102 |
Portfolio of Cash and Investments in Marketable Securities | Our portfolio of cash and investments in marketable securities includes (in thousands): Estimated Fair Value at Fair Value Hierarchy Level June 30, 2017 December 31, 2016 Corporate notes and bonds 2 $ 163,598 $ 156,044 Corporate commercial paper 2 123,787 160,920 Obligations of U.S. government agencies 2 4,243 13,749 Available-for-sale investments 291,628 330,713 Money market funds 1 14,553 51,104 Certificate of deposit N/A 2,930 2,930 Cash N/A 1,596 4,355 Total cash and investments in marketable securities $ 310,707 $ 389,102 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consists of the following (in thousands): June 30, 2017 December 31, 2016 Raw materials $ 1,543 $ 2,055 Work-in-process 7,207 7,311 Finished goods 2,258 1,743 Total inventory $ 11,008 $ 11,109 |
License and Collaboration Agr19
License and Collaboration Agreements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
License, Collaboration and Other Revenue | In accordance with our collaboration agreements, we recognized license, collaboration and other revenue as follows (in thousands): Three months ended June 30, Six months ended June 30, Partner Drug or Drug Candidate 2017 2016 2017 2016 AstraZeneca AB MOVANTIK ® and MOVANTIK ® combination program $ 1,600 $ — $ 4,600 $ 28,000 Amgen, Inc. Neulasta ® 1,250 1,250 2,500 2,500 Bayer Healthcare LLC BAY41-6551 (Amikacin Inhale) 357 357 714 714 Daiichi Sankyo Europe GmbH ONZEALD TM 216 3,258 431 3,258 Roche MIRCERA ® — 1,914 — 3,842 Baxalta Incorporated ADYNOVATE ® 45 207 45 313 Other 1,356 1,284 2,626 3,830 License, collaboration and other revenue $ 4,824 $ 8,270 $ 10,916 $ 42,457 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expense | Total stock-based compensation expense was recognized in our Condensed Consolidated Statements of Operations as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Cost of goods sold $ 538 $ 402 $ 1,092 $ 790 Research and development 4,620 3,125 9,217 6,324 General and administrative 2,941 2,737 5,974 5,513 Total stock-based compensation $ 8,099 $ 6,264 $ 16,283 $ 12,627 |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017USD ($) | Jun. 30, 2016 | Jun. 30, 2017USD ($)Segment | Jun. 30, 2016 | Jan. 01, 2017USD ($) | Dec. 31, 2016USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash and investments in marketable securities | $ 310,707 | $ 310,707 | $ 389,102 | |||
Senior secured notes | 250,000 | 250,000 | ||||
Debt and capital lease obligation | 253,800 | 253,800 | ||||
Capital lease obligations | 3,800 | 3,800 | ||||
Capital lease obligations, current portion | $ 2,706 | $ 2,706 | 2,908 | |||
Number of operating business segment | Segment | 1 | |||||
Adoption of New Accounting Principles [Member] | Other Current Assets [Member] | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Impact of reclassification due to adoption of new accounting pronouncement | $ 300 | |||||
Accumulated Deficit [Member] | Adoption of New Accounting Principles [Member] | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Impact of reclassification due to adoption of new accounting pronouncement | $ 200 | |||||
Federal [Member] | Stock Option Windfall Deductions | Adoption of New Accounting Principles [Member] | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Impact of reclassification due to adoption of new accounting pronouncement | 20,600 | |||||
State [Member] | Stock Option Windfall Deductions | Adoption of New Accounting Principles [Member] | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Impact of reclassification due to adoption of new accounting pronouncement | $ 9,800 | |||||
India | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Effective income tax rate – India | 35.00% | 35.00% | 35.00% | 35.00% |
Cash and Investments in Marke22
Cash and Investments in Marketable Securities - Cash and Investments in Marketable Securities, Including Cash Equivalents (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||||
Cash and cash equivalents | $ 16,149 | $ 59,640 | $ 55,676 | $ 55,570 |
Short-term investments | 249,398 | 329,462 | ||
Long-term investments | 45,160 | 0 | ||
Total cash and investments in marketable securities | $ 310,707 | $ 389,102 |
Cash and Investments in Marke23
Cash and Investments in Marketable Securities - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Cash and Investments in Marketable Securities [Line Items] | |||||
Maximum maturity term for debt securities investment | Two years or less | ||||
Weighted average maturity term for debt securities investment | One year or less | ||||
Debt investment maturity period greater than one year | $ 45,160,000 | $ 45,160,000 | $ 0 | ||
Available-for-sale securities, sold | 0 | $ 0 | 8,823,000 | $ 0 | |
Level 1 to level 2 transfers | 0 | 0 | 0 | 0 | |
Level 2 to level 1 transfers | 0 | $ 0 | 0 | $ 0 | |
Senior secured notes, principal amount | $ 250,000,000 | $ 250,000,000 | |||
Senior Notes [Member] | 7.75% Senior Secured Notes Due October 2020 [Member] | |||||
Cash and Investments in Marketable Securities [Line Items] | |||||
Senior secured notes, interest rate | 7.75% | 7.75% | |||
Senior secured notes, maturity date | Oct. 5, 2020 | ||||
Minimum cash and investments in marketable securities to be maintained | $ 60,000,000 | $ 60,000,000 | |||
Senior Notes [Member] | 7.75% Senior Secured Notes Due October 2020 [Member] | Level 3 [Member] | |||||
Cash and Investments in Marketable Securities [Line Items] | |||||
Senior secured notes, interest rate | 7.75% | 7.75% | |||
Senior secured notes, maturity date | Oct. 5, 2020 | ||||
Senior secured notes, principal amount | $ 250,000,000 | $ 250,000,000 |
Cash and Investments in Marke24
Cash and Investments in Marketable Securities - Portfolio of Cash and Investments in Marketable Securities (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | $ 291,628 | $ 330,713 |
Cash | 1,596 | 4,355 |
Total cash and investments in marketable securities | 310,707 | 389,102 |
Corporate Commercial Paper [Member] | Fair Value Hierarchy Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | 123,787 | 160,920 |
Corporate Notes and Bonds [Member] | Fair Value Hierarchy Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | 163,598 | 156,044 |
Obligations of U.S. government agencies [Member] | Fair Value Hierarchy Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | 4,243 | 13,749 |
Money Market Funds [Member] | Fair Value Hierarchy Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 14,553 | 51,104 |
Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | $ 2,930 | $ 2,930 |
Inventory - Inventory (Detail)
Inventory - Inventory (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,543 | $ 2,055 |
Work-in-process | 7,207 | 7,311 |
Finished goods | 2,258 | 1,743 |
Total inventory | $ 11,008 | $ 11,109 |
Liability Related to the Sale26
Liability Related to the Sale of Future Royalties - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 24, 2012 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Liability Related to the Sale of Future Royalties [Line Items] | |||||
Non-cash royalty revenue related to sale of future royalties | $ 6,638 | $ 8,115 | $ 13,301 | $ 14,650 | |
Non-cash interest expense on liability related to sale of future royalties | $ 4,512 | $ 4,982 | $ 9,064 | $ 10,027 | |
Annual interest rate | 17.00% | ||||
Purchase and Sale Agreement with RPI [Member] | |||||
Liability Related to the Sale of Future Royalties [Line Items] | |||||
Proceeds from sale of royalty rights | $ 124,000 | ||||
Transaction costs related to sale of potential future royalties | $ 4,400 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jun. 26, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Aug. 14, 2015 |
Indemnification Obligation [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation matters, liabilities | $ 0 | $ 0 | $ 0 | $ 0 | ||
Cross-License Agreement [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Total payments due related to license agreement amendment | $ 7,000,000 | |||||
Payment made related to license agreement amendment | 3,500,000 | |||||
Litigation matters, liabilities | $ 0 | |||||
Cross-License Agreement [Member] | Cost of Goods Sold [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued royalties | 1,400,000 | 1,400,000 | 1,400,000 | |||
Cross-License Agreement [Member] | General and Administrative Expense [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued expense related to license agreement amendment | 3,300,000 | |||||
Cross-License Agreement [Member] | Other Current Liabilities [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Liability related to license agreement amendment | $ 3,500,000 | $ 3,500,000 | 3,500,000 | |||
Cross-License Agreement [Member] | Other Current Assets [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation matters, future obligations of royalty payments | $ 2,300,000 | |||||
Enzon Litigation [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Damage claim for alleged unpaid licenses | $ 1,500,000 | |||||
Enzon Litigation [Member] | Cross-License Agreement [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation matters, dismissal date | Jun. 30, 2017 |
License and Collaboration Agr28
License and Collaboration Agreements - License, Collaboration and Other Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | $ 4,824 | $ 8,270 | $ 10,916 | $ 42,457 |
AstraZeneca AB [Member] | MOVANTIK and MOVANTIK fixed-dose combination program [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | 1,600 | 0 | 4,600 | 28,000 |
Amgen, Inc. [Member] | Neulasta [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | 1,250 | 1,250 | 2,500 | 2,500 |
Bayer Healthcare LLC [Member] | BAY41-6551 (Amikacin Inhale) [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | 357 | 357 | 714 | 714 |
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | 216 | 3,258 | 431 | 3,258 |
Roche [Member] | MIRCERA [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | 0 | 1,914 | 0 | 3,842 |
Baxalta Incorporated [Member] | ADYNOVATE [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | 45 | 207 | 45 | 313 |
Other [Member] | ||||
License And Collaboration Agreements [Line Items] | ||||
License, collaboration and other revenue | $ 1,356 | $ 1,284 | $ 2,626 | $ 3,830 |
License and Collaboration Agr29
License and Collaboration Agreements - Additional Information (Detail) - USD ($) | Sep. 21, 2016 | May 30, 2016 | Mar. 01, 2016 | Sep. 16, 2014 | Jan. 31, 2017 | Aug. 31, 2016 | Mar. 31, 2016 | Nov. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Feb. 29, 2012 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2010 | Dec. 31, 2009 | Jun. 30, 2017 | Dec. 31, 2013 | Dec. 31, 2007 | Dec. 31, 2016 |
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Potential future additional payments for development milestones | $ 147,000,000 | ||||||||||||||||||
Liability for refundable upfront payment | $ 12,500,000 | 12,500,000 | $ 12,500,000 | ||||||||||||||||
AstraZeneca-Kirin [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Percentage of upfront payment, market access milestone payments, royalties and sales milestone payments | 40.00% | ||||||||||||||||||
ONZEALDTM (NKTR-102) [Member] | Turkey [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Percentage of royalty on net sales | 15.00% | ||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK and MOVANTIK fixed-dose combination program [Member] | Upfront Payment Arrangement [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 125,000,000 | ||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK Fixed-dose Combination Program [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Potential contingent payments based on development events | 75,000,000 | 75,000,000 | |||||||||||||||||
AstraZeneca AB [Member] | AstraZeneca-Kirin [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 28,000,000 | 1,600,000 | 4,600,000 | ||||||||||||||||
Upfront and milestone payments received by Our collaboration partner under sublicense arrangement | $ 70,000,000 | ||||||||||||||||||
Percentage of upfront payment, market access milestone payments, royalties and sales milestone payments from sublicense agreement retained by our collaboration partner | 60.00% | ||||||||||||||||||
Deferred revenue | 0 | 0 | |||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Percentage of post approval study costs to repay | 33.00% | ||||||||||||||||||
Maximum potential reduction in royalties | $ 35,000,000 | ||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK [Member] | United States [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Potential reduction in U.S. royalty rate for repayment | 2.00% | ||||||||||||||||||
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Eligible milestone payments receivable upon achievement of regulatory and commercial milestones | 60,000,000 | ||||||||||||||||||
Milestone payments to be received upon first commercial sales | 10,000,000 | ||||||||||||||||||
Milestone payment to be received upon first commercial sale after final regulatory approval | 25,000,000 | ||||||||||||||||||
Milestone payment to be received upon first achievement of annual net sales target | 25,000,000 | ||||||||||||||||||
Liability for refundable upfront payment | 12,500,000 | 12,500,000 | $ 12,500,000 | ||||||||||||||||
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | European Territory Except Turkey [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Percentage of royalty on net sales | 20.00% | ||||||||||||||||||
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | Upfront Payment Arrangement [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 20,000,000 | ||||||||||||||||||
Deferred revenue | 3,400,000 | 3,400,000 | |||||||||||||||||
Non-refundable portion of upfront payment | $ 7,500,000 | ||||||||||||||||||
Non-refundable portion of upfront payment, subject to conditional marketing approval | 12,500,000 | ||||||||||||||||||
Revenue recognized from upfront payment | $ 3,300,000 | ||||||||||||||||||
Baxalta Incorporated [Member] | ADYNOVATE (Hemophilia) [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Deferred revenue | 0 | 0 | |||||||||||||||||
Development milestones achieved | $ 10,000,000 | ||||||||||||||||||
Baxalta Incorporated [Member] | ADYNOVATE (Hemophilia) [Member] | European Union [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Potential future additional payments for development milestones | 10,000,000 | ||||||||||||||||||
Roche [Member] | MIRCERA [Member] | Performance-based Milestone Payments [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 22,000,000 | ||||||||||||||||||
Roche [Member] | MIRCERA [Member] | Upfront Payment Arrangement [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 5,000,000 | ||||||||||||||||||
Amgen, Inc. [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 50,000,000 | ||||||||||||||||||
Deferred revenue | 16,700,000 | 16,700,000 | |||||||||||||||||
Bayer Healthcare LLC [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Potential future additional payments for development milestones | 50,000,000 | ||||||||||||||||||
Deferred revenue | 17,100,000 | 17,100,000 | |||||||||||||||||
Payment made to Bayer for cost of Phase 3 clinical trial | $ 10,000,000 | ||||||||||||||||||
Potential future development milestones related to FDA approval | 22,500,000 | ||||||||||||||||||
Bayer Healthcare LLC [Member] | Performance-based Milestone Payments [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 30,000,000 | ||||||||||||||||||
Bayer Healthcare LLC [Member] | Upfront Payment Arrangement [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 40,000,000 | ||||||||||||||||||
Ophthotech Corporation [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Advances from collaboration partner payment | $ 12,700,000 | ||||||||||||||||||
Ophthotech Corporation [Member] | Reagent Shipments [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Advances from collaboration partner payment | 10,400,000 | ||||||||||||||||||
Ophthotech Corporation [Member] | Minimum Purchase Requirement [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Advances from collaboration partner payment | $ 2,300,000 | ||||||||||||||||||
Ophthotech Corporation [Member] | Fovista [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Received upfront and milestone payments | $ 19,800,000 | ||||||||||||||||||
Deferred revenue | 18,300,000 | $ 18,300,000 | |||||||||||||||||
Bristol-Myers Squibb [Member] | NKTR-214 [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Percentage of out-of-pocket costs to be reimbursed by partner | 50.00% | ||||||||||||||||||
License agreement exclusivity expiration date | Sep. 30, 2018 | ||||||||||||||||||
License agreement exclusivity negotiation period | 3 months | ||||||||||||||||||
Other [Member] | |||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||||||||
Potential future additional payments for development milestones | $ 45,500,000 | ||||||||||||||||||
Deferred revenue | $ 6,800,000 | $ 6,800,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 8,099 | $ 6,264 | $ 16,283 | $ 12,627 |
Cost of Goods Sold [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 538 | 402 | 1,092 | 790 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 4,620 | 3,125 | 9,217 | 6,324 |
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 2,941 | $ 2,737 | $ 5,974 | $ 5,513 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock issuances under equity compensation plans | 1,130,164 | 451,391 | 2,648,769 | 1,313,937 |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted stock options | 956,160 | 589,090 | 1,285,020 | 789,290 |
Weighted average grant-date fair value | $ 8.96 | $ 7.22 | $ 8.70 | $ 6.88 |
Restricted Stock Units (RSU) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted | 0 | 2,000 | 0 | 2,000 |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Options and Restricted Stock Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average diluted securities excluded from diluted net loss per share | 20.2 | 19.4 | 20.7 | 19.6 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] | Aug. 04, 2017USD ($)ft² | Jul. 24, 2017USD ($) |
ARE-San Francisco No. 19, LLC [Member] | ||
Subsequent Event [Line Items] | ||
Lease space | ft² | 128,793 | |
Lease commencement date | Feb. 1, 2020 | |
Lease expiration date | Jan. 31, 2030 | |
Lease, monthly base rent | $ 611,767 | |
Lease, annual rent adjustment rate | 3.00% | |
Additional lease space | ft² | 24,000 | |
Nektar's [Member] | NKTR-358 [Member] | ||
Subsequent Event [Line Items] | ||
Percentage of sharing in Phase 2 development costs | 25.00% | |
Eli Lilly and Company [Member] | NKTR-358 [Member] | ||
Subsequent Event [Line Items] | ||
Initial payment receivable | $ 150,000,000 | |
Percentage of sharing in Phase 2 development costs | 75.00% | |
Eli Lilly and Company [Member] | NKTR-358 [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Potential future additional development and regulatory milestones | $ 250,000,000 | |
Pfizer, Inc. [Member] | ||
Subsequent Event [Line Items] | ||
Sublease, maximum termination period | 2020-01 |