Nektar (NKTR) Q2 Revenue Falls 52%

Key Points

• Net loss per share (GAAP) of $2.95 improved compared to Q2 2024.

• GAAP revenue fell 52.3% compared to Q2 2024, driven by the lack of product sales after the facility sale, but still exceeded consensus estimates.

• Positive clinical trial progress and FDA Fast Track designation for rezpegaldesleukin, with cash runway now extends into the first quarter of 2027.

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Nektar Therapeutics (NASDAQ:NKTR), a clinical-stage biopharmaceutical company focusing on immunology and oncology drug development, reported its latest financial results on August 7, 2025, for the second quarter of 2025. The most significant news was that both non-GAAP earnings per share (EPS) and GAAP revenue came in ahead of estimates, with GAAP revenue totaling $11.2 million compared to the $9.49 million estimate. However, revenue (GAAP) declined sharply from the prior year as product sales disappeared following the sale of the company's manufacturing facility. The period also brought important clinical milestones, most notably a regulatory Fast Track designation from the U.S. Food and Drug Administration (FDA) for rezpegaldesleukin in alopecia areata. While operational losses remain substantial, a mid-year public stock offering extended the cash runway into the first quarter of 2027. Overall, the quarter was marked by encouraging pipeline progress but also highlighted a business still in transition and heavily reliant on future clinical and partnership milestones.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Focus Areas

Nektar Therapeutics develops immunology and oncology drug candidates designed to modulate the immune system. Its most advanced asset is rezpegaldesleukin, a biologic therapy aimed at boosting regulatory T cell function to treat autoimmune diseases like atopic dermatitis and alopecia areata. The pipeline also includes NKTR-255, an interleukin-15 receptor agonist for cancer treatment, currently progressing through investigator-led and partnered studies.

In recent years, the company has had to pivot following the sale of its manufacturing facility and loss of product sales revenue, shifting its operational focus almost entirely to advancing its clinical pipeline. Success for Nektar Therapeutics hinges on demonstrating proof-of-concept in key clinical trials, securing regulatory milestones, and forming strategic partnerships to help fund and execute costly late-stage development. The ability to partner, obtain regulatory acceleration, and efficiently manage cash are all vital to its near-term outlook.

Quarter in Review: Financial and Clinical Updates

The company modestly exceeded analyst expectations, with GAAP revenue of $11.2 million and non-GAAP EPS of -2.78. Reported GAAP revenue of $11.2 million surpassed consensus by $1.7 million but was down sharply compared to Q2 2024, reflecting the transition away from product sales to a model currently based on non-cash royalties. These royalties stem from earlier licensing and royalty arrangements following the sale of its Huntsville manufacturing facility. Product sales (GAAP) were zero, compared with $6.6 million (GAAP) in Q2 2024.

On the expense side, research and development (R&D) costs held steady compared with last year on a GAAP basis, coming in at $29.9 million and early-stage development of NKTR-0165, a preclinical antibody targeting autoimmune disorders. General and administrative (G&A) expenses fell 16.6% compared to Q2 2024 to $17.1 million (GAAP). The absence of significant restructuring and impairment expenses also contributed to the narrowing net loss. The company posted a GAAP net loss of $41.6 million, an improvement from the $52.4 million GAAP net loss in Q2 2024.

The centerpiece of the company's clinical progress was rezpegaldesleukin, a regulatory T cell modulator designed to treat immune-mediated diseases. During the quarter, positive 16-week induction data emerged from a Phase 2b trial in moderate to severe atopic dermatitis, achieving statistically significant improvement on the main efficacy endpoint (Eczema Area and Severity Index, or EASI) and several important secondary goals such as itch relief and higher EASI response thresholds. The U.S. FDA also granted Fast Track status for rezpegaldesleukin in severe-to-very severe alopecia areata, helping accelerate the regulatory path for this hard-to-treat patient group.

Key readouts remain in focus. Thirty-six week maintenance results from the atopic dermatitis study are expected in early 2026, aimed at demonstrating durability of effect. Meanwhile, Phase 2b top-line data in alopecia areata -- a disease causing widespread hair loss -- are expected in December 2025, with this candidate positioned as a possible first-in-class biologic for that indication. There are also plans to launch a proof-of-concept study in type 1 diabetes through an external academic partnership in late 2025. In oncology, the NKTR-255 program saw encouraging presentation data in large B-cell lymphoma but remains dependent on partner-led development for future progress.

All revenue in the quarter derived from non-cash royalties rather than product sales, a trend resulting from the completed facility sale in December 2024. With the new operating structure, capital needs are significant. The company completed a public stock offering in July 2025, raising approximately $107.5 million in net proceeds. Management stated that this bolstered cash position is expected to fund operations into the first quarter of 2027, providing ample time to pursue late-stage trials and potential partnerships.

Stockholder equity turned negative by period end, reflecting continued net losses, a signal that the company must deliver on late-stage milestones to restore the balance sheet.

Pipeline and Business Model Context

Its flagship pipeline candidate, rezpegaldesleukin, is a biologic drug that stimulates regulatory T cells, which are immune system components that control inflammation and autoimmunity. NKTR-255 is an oncology asset that enhances immune cell activation and is being tested in blood cancers through external collaborations. The company is also advancing preclinical programs—most notably NKTR-0165, a tumor necrosis factor receptor 2 (TNFR2) agonist antibody, and NKTR-0166, a bispecific antibody—which could broaden its future pipeline.

The company is open about the need for partners to advance rezpegaldesleukin beyond Phase 2, particularly in atopic dermatitis and alopecia areata. Management also places importance on ongoing technology innovation, such as its work with polymer conjugate and PEGylation technologies, to differentiate its therapies in competitive markets.

Looking Ahead: Guidance and Strategic Considerations

Planned R&D spending for FY2025 is projected at $110–$120 million, with G&A costs (GAAP) are expected to be between $60–$65 million for FY2025.

In terms of key watchpoints in coming quarters, upcoming clinical readouts -- particularly maintenance data from ongoing atopic dermatitis studies, top-line results in alopecia areata in December, and the start of a type 1 diabetes proof-of-concept trial -- will be the primary catalysts. Investors should pay attention to new partnership activity, pipeline execution, and updates on the litigation front. With revenue now solely derived from royalties and a negative equity balance, future value creation is tied to milestones in the pipeline and the terms of future deals. NKTR does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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