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NEKTAR THERAPEUTICS (NKTR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $10.46M, down year-over-year due to the sale of the Huntsville manufacturing facility eliminating product sales; GAAP net loss was $50.9M (–$0.24 per share) and non-GAAP net loss (ex-equity method loss) was $46.4M (–$0.22 per share) .
  • Management guided FY 2025 revenue to ~$40M, R&D $110–$120M, G&A $60–$65M, non-cash interest expense ~$20M; cash runway into Q4 2026 and expected year-end cash/investments of ~$100M .
  • Versus SPGI consensus for Q1 2025, revenue missed ($10.46M vs $15.36M*) and reported GAAP EPS is not directly comparable to SPGI “Primary EPS” (–$2.496* estimate; –$3.606* actual) which reflects SPGI normalization rather than GAAP per-share figures .
  • Near-term stock catalysts center on June topline REZOLVE-AD Phase 2b induction data in atopic dermatitis and December REZOLVE-AA topline data in alopecia areata; FDA Fast Track designation for AD supports regulatory interactions post-Phase 2 .

What Went Well and What Went Wrong

  • What Went Well

    • “We are on track to report topline data in June from the Phase 2 study of rezpegaldesleukin in atopic dermatitis… [and] in December… in alopecia areata,” highlighting two value-creating catalysts in 2025 .
    • FDA Fast Track designation for rezpegaldesleukin in AD enhances regulatory engagement and potential expedited review; global Phase 2b AD trial enrollment completed (398 patients) .
    • Strong liquidity: $220.7M cash and investments; runway into Q4 2026 per CFO, supporting key trials without near-term dilution .

  • What Went Wrong

    • Revenue declined YoY to $10.46M from $21.64M due to elimination of product sales after Huntsville facility sale; non-cash equity method loss of $4.5M from Gannet BioChem widened GAAP net loss .
    • R&D and G&A increased YoY (R&D $30.5M vs $27.4M; G&A $24.3M vs $20.1M), reflecting development and legal costs, partially offsetting COGS elimination .
    • Q1 2025 revenue missed SPGI consensus by ~$4.9M*; SPGI “Primary EPS” framework shows a larger loss than GAAP per-share, complicating comparisons and potentially pressuring sentiment near-term .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Millions)$24.124 $29.175 $10.460
GAAP EPS ($USD)–$0.18 $0.03 –$0.24
Net Loss ($USD Millions)–$37.057 $7.261 –$50.882
Loss from Operations ($USD Millions)–$34.345 $14.348 –$44.535
R&D Expense ($USD Millions)$35.031 $28.744 $30.480
G&A Expense ($USD Millions)$18.957 $17.135 $24.346
Non-cash Royalty Revenue ($USD Millions)$15.731 $16.238 $10.460
Product Sales ($USD Millions)$8.015 $12.874 $0.000

Revenue composition (Q1 2025):

  • Non-cash royalty revenue: $10.460M; License/collaboration: $0.000M; Product sales: $0.000M .

Cash and investments:

  • Cash & investments: $220.7M (3/31/2025) vs $269.1M (12/31/2024) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025N/A~$40 Initiated
R&D Expense ($USD Millions)FY 2025N/A$110–$120 (incl. $5–$10 non-cash) Initiated
G&A Expense ($USD Millions)FY 2025N/A$60–$65 (incl. $5–$10 non-cash) Initiated
Non-cash Interest Expense ($USD Millions)FY 2025N/A~$20 Initiated
Equity Method Loss ($USD Millions)FY 2025N/A~$10 non-cash Initiated
Cash & Investments ($USD Millions)YE 2025N/A~$100 Initiated
Cash RunwayThroughN/AInto Q4 2026 Maintained/Increased clarity

Note: No prior formal guidance in Q4 press release; current ranges provided by CFO in Q1 call .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
REZPEG in Atopic Dermatitis (AD)Rapid enrollment; FH 2025 topline expected AD Phase 2b enrollment complete; Q2 2025 topline targeted June topline from 16-week induction; Phase III dose selection goal; maintenance data early 2026 Increasing clarity; near-term catalyst
REZPEG in Alopecia Areata (AA)Enrolling; SH 2025 topline expected Enrollment complete; Q4 2025 topline targeted December topline; design considerations for maintenance; potential remittive effect Advancing toward data readout
Regulatory (FDA Fast Track for AD)Not mentionedNot mentionedFast Track designation granted for AD Positive regulatory momentum
TrialNet T1D collaborationNot mentionedNot mentionedNew Phase 2 T1D proof-of-concept collaboration; planned 2025 start Pipeline breadth expanding
TNFR2 programs (NKTR-0165/0166)Advancing preclinical; clinic next year NKTR-0165 data presented; IND in 2H 2025; bispecific NKTR-0166 unveiled IND-enabling on track; NKTR-0166 into preclinical Steady execution
Oncology (NKTR-255)Publications; upcoming ASH data ASH proof-of-concept; CR rates improved vs placebo EHA oral presentation on CAR-T combo; continued partnering focus Continued external validation
Legal (Lilly litigation)Not mentionedNot mentionedActively pursuing litigation; damages view independent of REZPEG success Ongoing; potential upside optionality

Management Commentary

  • CEO Howard Robin: “As a first-in-class T regulatory cell biologic, rezpegaldesleukin is poised to emerge as an important novel mechanism to treat millions of patients with chronic autoimmune disorders” .
  • CSO Jonathan Zalevsky: The AD Phase 2b aims to “identify a proper dose for an initial 16-week induction… and also… a maintenance dose regimen” with key secondary endpoints (EASI-75/90, vIGA, itch) and proactive steps to manage placebo rate via global sites and dermatologist-led centers .
  • CFO Sandra Gardiner: “We ended the first quarter of 2025 with $220.7 million in cash and investments… expect quarterly revenue to remain at a similar level… totaling approximately $40 million for the full year… end 2025 with approximately $100 million” and runway into Q4 2026 .

Q&A Highlights

  • AD Phase III planning: Company plans to pursue end-of-Phase II meeting based on 16-week induction data without waiting for maintenance completion; intent to keep momentum into Phase III .
  • Dosing and design: Weight-based dosing will be maintained into Phase III; well-powered Phase 2b design increases probability of significance across dose arms .
  • Placebo management: Expect lower placebo rates vs prior Phase 1b through geographic diversification and site quality controls .
  • Partnership strategy: Nektar seeks collaboration to execute Phase III while retaining significant ownership; aims to minimize dilutive financing .
  • Alopecia kinetics/remission: Longer induction (36 weeks) designed to capture hair regrowth dynamics; off-drug assessment to evaluate remittive potential versus JAK inhibitors .

Estimates Context

MetricQ1 2025 ActualQ1 2025 SPGI Consensus# of Estimates
Revenue ($USD Millions)$10.460 $15.355*8*
Primary EPS–$0.24 (GAAP) –2.496* (SPGI “Primary EPS”)7*
  • Values marked with * are retrieved from S&P Global; caution: SPGI “Primary EPS” may reflect normalization and is not directly comparable to GAAP basic/diluted EPS per share. Values retrieved from S&P Global.
  • Miss vs consensus: Revenue missed by ~$4.9M*, driven by elimination of product sales post-Huntsville sale; EPS comparisons are distorted by framework differences .

Key Takeaways for Investors

  • Two near-term clinical catalysts (June AD induction topline; December AA topline) can re-rate the stock; Fast Track for AD supports expedited regulatory path if data are compelling .
  • Q1 revenue mix is now entirely non-cash royalty; absence of product sales structurally lowers reported revenue versus 2024, a dynamic likely to persist through 2025 per guidance .
  • Operating expenses skew higher in H1 due to AD study operations; expect non-ratable OpEx across quarters—use FY guidance ranges for modeling .
  • Liquidity remains robust with runway into Q4 2026 and expected YE cash/investments ~$100M, but Phase III execution will likely require a partner; collaboration discussions planned .
  • Oncology optionality via NKTR-255 readouts and external collaborations; immunology pipeline breadth with NKTR-0165/0166 adds medium-term value levers .
  • Litigation against Lilly provides potential, non-core upside but low visibility; base case should exclude until milestones emerge .
  • Near-term trading positioning should focus on AD topline readout expectations (placebo mitigation, endpoint breadth, dose selection clarity) and subsequent FDA interactions .

Appendix: Prior Quarter Comparatives and Q1 Supporting Data

  • Q4 2024: Revenue $29.175M; GAAP EPS $0.03; included $40.4M gain from Huntsville sale; FY 2024 revenue $98.427M; FY GAAP net loss $118.961M .
  • Q3 2024: Revenue $24.124M; GAAP EPS –$0.18; R&D $35.031M; G&A $18.957M .
  • Q1 2025 balance sheet: Cash & equivalents $38.894M; short-term investments $179.738M; total cash & investments $220.7M; total liabilities $242.503M; equity $13.738M .

Relevant press releases (Q1 2025):

  • FDA Fast Track for AD (Feb 10, 2025) .
  • TrialNet Phase 2 T1D collaboration (Feb 24, 2025) .
  • Completion of AA Phase 2b enrollment (Feb 26, 2025) .