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License and Collaboration Agreements | 12 Months Ended
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Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
License and Collaboration Agreements | 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 reimbursement for research and development activities. We generally include our costs of performing these services in research and development expense, except for costs for product sales to our collaboration partners which we include in cost of goods sold. We analyze our agreements to determine whether we should account for the agreements within the scope of ASC 808, and, if so, we analyze whether we should account for any elements under ASC 606. In accordance with our collaboration agreements, we recognized license, collaboration and other revenue as follows (in thousands):
|  |  |  | Year Ended December 31,
Partner |  | Agreement |  | 2022 |  | 2021 |  | 2020
Bristol-Myers Squibb |  | Bempegaldesleukin |  | $ | — |  |  | $ | — |  |  | $ | 50,000 |
Other |  |  |  | 1,913 |  |  | 436 |  |  | 5,849 |
License, collaboration and other revenue |  |  |  | $ | 1,913 |  |  | $ | 436 |  |  | $ | 55,849 |
Bristol-Myers Squibb (BMS): Bempegaldesleukin (previously referred to as NKTR-214) On February 13, 2018, we entered into a Strategic Collaboration Agreement (the BMS Collaboration Agreement) and a Share Purchase Agreement with BMS, both of which became effective on April 3, 2018. Pursuant to the BMS Collaboration Agreement, we and BMS have jointly developed bempegaldesleukin in combination with BMS’s Opdivo®. The parties share the internal and external development costs for bempegaldesleukin in combination regimens based on each party’s relative ownership interest in the compounds included in the regimens. In accordance with the agreement, the parties share development costs for bempegaldesleukin in combination with Opdivo®, 67.5% of costs to BMS and 32.5% to Nektar. The parties share costs for the manufacturing and commercialization of bempegaldesleukin, 35% of the costs to BMS and 65% to Nektar. Upon the effective date of the BMS Collaboration Agreement in April 2018, BMS paid us a non-refundable upfront cash payment of $1.0 billion and purchased 8,284,600 shares of our common stock pursuant to the Share Purchase Agreement for total additional cash consideration of $850.0 million. In 2020, we received non-refundable milestone payments of $50.0 million in aggregate for the first patient, first visit in the registrational trials in muscle-invasive bladder cancer and adjuvant melanoma. As discussed in Note 1, on March 14, 2022, we announced our registrational trial in metastatic melanoma did not meet its primary endpoints and that BMS and we decided to discontinue the trials in metastatic melanoma and adjuvant melanoma. On April 14, 2022, we announced that our registrational trials in each of renal cell carcinoma and cisplatin-ineligible, locally advanced or metastatic urothelial cancer did not meet their respective primary endpoints. Due to these results, BMS and we decided that these studies and all other ongoing studies in the program will be discontinued. The decision to terminate the program does not affect the cost-sharing provisions under the BMS Collaboration Agreement. However, without further development of bempegaldesleukin, we will no longer be eligible for the development, regulatory and sales milestones under the arrangement. We determined that the BMS Collaboration Agreement falls within the scope of ASC 808. As mentioned above, BMS shares certain percentages of development costs incurred by us and we share certain percentages of development costs incurred by BMS. We consider these activities to represent collaborative activities under ASC 808 and we recognize such cost sharing proportionately with the performance of the underlying services. We recognized BMS’ reimbursement of our expenses as a reduction of research and development expense and our reimbursement of BMS’ expenses as research and development expense. As discussed in Note 11, we terminated the development of bempegaldesleukin, and therefore, in the second quarter of 2022, we began reporting clinical trial, other third-party costs and employee costs for the bempegaldesleukin program in restructuring, impairment and other costs of program. Accordingly, during the year ended December 31, 2022, we recorded $45.7 million for the net reimbursement from BMS, of which we recorded $24.9 million as a reduction of research and development expense for the first quarter of 2022, and $20.8 million as a reduction of restructuring, impairment and other costs of terminated program for the remaining three quarters of 2022. During the years ended December 31, 2021 and 2020, we recorded $101.5 million and $128.2 million, respectively, as a reduction of research and development expense for the net reimbursement from BMS. As of December 31, 2022, we have recorded an unbilled receivable of $4.2 million from BMS in accounts receivable in our Consolidated Balance Sheet, which we received in February 2023. Eli Lilly and Company (Lilly): NKTR-358 On July 23, 2017, we entered into a worldwide license agreement (the Lilly Agreement) with Eli Lilly and Company (Lilly) to co-develop rezpegaldesleukin, a novel immunological drug candidate that we invented, pursuant to which we received an initial payment of $150.0 million and are eligible for up to $250.0 million in additional development and regulatory milestones. Although we are entitled to significant development milestones under this arrangement if Lilly decides to proceed to Phase 3 development, we have excluded such milestones from the transaction price due to the significant uncertainties involved with clinical development. We re-evaluate the transaction price at each reporting period and as uncertain events are resolved or other changes in circumstances occur. We are currently in Phase 1B and Phase 2 development, where we share costs with 75% of the costs borne by Lilly and 25% of the costs borne by us. Lilly is responsible for the costs of Phase 3 development, but we retain the option to contribute up to 25% of the costs of Phase 3 development on an indication-by-indication basis in order for us to achieve the maximum royalty level under the Lilly Agreement, and further, if approved, we will have the opportunity to receive a royalty rate up to the low twenties percent based upon our Phase 3 development cost contribution and the level of annual global product sales. Lilly will be responsible for all costs of global commercialization, and we will have an option to co-promote in the U.S. under certain conditions. A portion of the development milestones may be reduced by 50% under certain conditions, related to the final formulation of the approved product and the timing of prior approval (if any) of competitive products with a similar mechanism of action, which could reduce these milestone payments by 75% if both conditions occur. The Lilly Agreement will continue until Lilly no longer has any royalty payment obligations or, if earlier, the termination of the agreement in accordance with its terms. The Lilly Agreement may be terminated by Lilly for convenience, and may also be terminated under certain other circumstances, including material breach. On February 23, 2023, we announced the topline data from the Phase 2 study of rezpegaldesleukin in adult patients with systemic lupus erythematosus (SLE) (Phase 2 Lupus Study). The primary endpoint of the Phase 2 Lupus Study was not met, and Lilly has notified us that it does not intend to advance rezpegaldesleukin into Phase 3 development for SLE. Baxalta Inc. / Takeda Pharmaceutical Ltd.: Hemophilia We are a party to an exclusive research, development, license and manufacturing and supply agreement with Baxalta Inc. (Baxalta), a subsidiary of Takeda Pharmaceutical Company Ltd. (Takeda), entered into in September 2005 to develop products designed to improve therapies for Hemophilia A patients using our PEGylation technology, resulting in the approval of ADYNOVATE® by the FDA in 2015, which is now marketed in the U.S., the European Union, and many other countries. We are entitled to royalties based on worldwide net sales of ADYNOVATE® and a sales milestone upon achievement of an annual worldwide net sales target. We are responsible for supplying Takeda with its requirements for our proprietary materials. Takeda is responsible for all clinical development, regulatory, and commercialization expenses. The agreement is terminable by the parties under customary conditions. In October 2017, we entered into a right to sublicense agreement with Baxalta, under which we granted to Baxalta the right to grant a nonexclusive sublicense to certain patents that were previously exclusively licensed to Baxalta under our 2005 agreement. Under the right to sublicense agreement, we are entitled to single digit royalty payments based upon net sales of the products covered under the sublicense throughout the term of the agreement. As described in Note 7, we sold our rights to receive these royalties to HCR pursuant to the 2020 Purchase and Sale Agreement. AstraZeneca AB: MOVANTIK® (naloxegol oxalate) In September 2009, we entered into 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®. AstraZeneca is responsible for all research, development and commercialization costs and related decisions for MOVANTIK®. Through various sublicense arrangements to RedHill Biopharma, Kyowa Hakko Kirin Co. Ltd. and Knight Therapeutics, as of April 2020, AstraZeneca has sub-licensed all of its global commercialization rights. Our rights, including the royalty rate, royalty term and future potential sales milestones, remain unchanged as a result of these sublicenses. We are generally entitled to escalating double-digit royalty payments and sales milestones for net sales of MOVANTIK®. As described in Note 7, we sold our rights to receive these royalties to HCR pursuant to the 2020 Purchase and Sale Agreement. Other We have other collaboration agreements that have resulted in commercialized products for our collaborations partners. Under these agreements, we may sell our proprietary PEGylation materials for use in these products, and we are entitled to receive royalties based on net sales of these products as well as sales milestones. Additionally, we have a collaboration agreement for a product under development, under which we are entitled to up to a total of $40.0 million of regulatory milestones, as well as royalties based on net sales, if approved, and sales milestones upon achievement of an annual net sales targets. However, given the current phase of development of the product under this collaboration agreement, we cannot estimate the probability or timing of achieving these milestones, and, therefore, have excluded all development milestones from the transaction price for this agreement.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -URI https://asc.fasb.org/topic&trid=5833765 + Details
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