Shares of Nektar Therapeutics (NASDAQ: NKTR), a clinical-stage biopharmaceutical company engaged in the development of a pipeline of drug candidates that use its PEGylation and polymer conjugate technology platforms, rose sharply on Wednesday after announced that it agreed to sell its future royalties on two drugs to Royalty Pharma for $124 million.�
Nektar shares rose to an intra-day high of $7.80 on Wednesday before finishing the day 6.22% higher at $7.17 on above average volume of 6.21 million.�
Nektar said that it will use the proceeds from the sale of future royalties to repay debt. NKTR will sell the royalties of its Crohn�s disease treatment Cimzia and chronic kidney disease treatment Mircera.�
Jon LeCroy, analyst at MKM Partners, told Reuters that this is a good deal for NKTR because it is non-dilutive. Under the terms of the agreement, if certain sales milestones on the drugs are not met, then NKTR will pay an affiliate of Royalty Pharma up to $3 million for 2013 and up to $7 million in 2014.�
Nektar also released its fourth-quarter financial results on Wednesday. The San Francisco, California-based company ended the fourth quarter of 2011 with cash, cash equivalents and investments of $414.9 million.�
The company�s revenue for the fourth quarter of 2011 was $15.8 million, compared with $45.3 million reported for the same period in the previous year. The decline was mainly due to the completion as of December 31, 2010 of the amortization of the $125 million upfront payment received in 2009 from AstraZeneca for the NKTR-118 and NKTR-119 license agreement.�
Howard W. Robin, President and CEO of Nektar, said that in 2011, NKTR continued to demonstrate that its technology platform is capable of generating multiple new drug candidates in high value therapeutic areas such as pain, oncology and hemophilia.�
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