Good day, ladies and gentlemen, and welcome to the Nektar Therapeutics Third Quarter 2013 Financial Results Conference Call. At this time all participants are in listen-only mode. Later we’ll conduct a question-and-answer session and instructions will follow at that time. (Operator instructions). As a reminder this conference may be recorded. I will now turn the call over to your host, Jennifer Ruddock, Vice President of Investor Relations. Please go ahead.

Thank you, Stephanie. Good afternoon and thank you for joining us. With us today are Howard Robin, our President and CEO; John Nicholson, our Chief Financial Officer; Dr. Robert Medve, our Chief Medical Officer; and Dr. Steve Doberstein, our Chief Scientific Officer. On this call we expect to make forward-looking statements regarding our business, including but not limited to clinical development plans, the timing of future clinical results and regulatory filings, the economic potential of our collaboration partnerships, the therapeutic and market potential of our drug candidates and those of our partners, our financial guidance for 2013 which includes potential milestone payments, and certain other statements regarding the future of our business. Because forward-looking statements relate to the future they are subject to inherent uncertainties, risks and changes that are difficult to predict and many of which are outside of our control. Important risks and uncertainties are set forth in our quarterly report on Form 10-Q which is filed today. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise. A webcast of this call will be available for replay on the IR page at Nektar’s website. With that I would now like to hand the call over to Howard Robin. Howard?

Thank you, Jennifer. Thanks to everyone for joining us this afternoon. I’ll be spending time today focusing on our upcoming milestones for both our partnered and proprietary programs. John will provide more detail on financial guidance later in the call but I want to let you know that we’re updating our year-end cash guidance for 2013. We are now increasing our year-end cash projection by $50 million and we expect to end the year with at least $250 million in cash and investments. As you know we have five highly valuable late stage programs, spanning multiple therapeutic areas that are either filed or in Phase III clinical testing; four of which are being developed by our pharmaceutical partners, AstraZeneca, Baxter, and Bayer. The economics of these partnered programs are significant for Nektar and these programs will provide us with a steady stream of catalysts. These partnered programs, together with the depth of our wholly owned development pipeline clearly set Nektar apart from other companies in our sector. I would like to start with naloxegol, partnered with AstraZeneca. In late August AstraZeneca filed for marketing approval of naloxegol in both Europe and Canada. Both of these submissions have now been accepted for filing within the expected regulatory timeframe. The acceptance of the MAA in Europe triggered payment of a $25 million milestone to Nektar that we received in the third quarter. The NDA for Naloxegol was filed to the FDA in mid September and typically there is a 60 day waiting period for acceptance of a filing in the U.S. We expect the FDA acceptance of the naloxegol filing this month and we will receive a $70 million milestone payment from AstraZeneca upon that acceptance. As many of you are aware there is an FDA advisory panel tentatively scheduled for March…

Thank you, Howard and good afternoon everyone. Today we’ll focus my discussion on our revised financial guidance for 2013. As Howard said at the beginning the call we are now increasing our end of the year cash projection for 2013. We expect to end this year with at least $250 million in cash and investments. This is an increase of $50 million from our previously expected year-end balance of $200 million. As a result we now expect our 2013 cash used in operations, including capital expenditures will be approximately $50 million as compared to our prior guidance of $95 million to $105 million. The increase in our year-end cash projection is primarily due to the following items. First we now expect manufacturing proceeds to be $50 million higher this year than we’ve previously forecasted due to increased sales of proprietary PEG reagents to one of our collaboration partners. Second we removed approximately $18 million in Nektar-181 Phase III spend from a cash guidance this year as the study is now expected to start in the middle of 2014. Third, capital expenditure will total approximately $5 million this year which is $5 million less than our prior guidance. And finally our expenses for Nektar-102 BEACON study in 2013 are lower than projected because of completion of enrollment five months ahead of schedule. As a reminder our year-end cash guidance includes the $70 million milestone payment from AstraZeneca for the acceptance of the U.S. NDA file for naloxegol which is expected this month. Our revenue is forecasted to be between $135 million and $140 million. As I just stated we expect to receive the $70 million cash milestone payment for naloxegol from AstraZeneca in November of this year. But we plan to recognize this milestone as revenue in 2014. Our 2013 revenue guidance also includes $17 of non-cash revenue from royalty revenue from UCB’s Cimzia and Roche’s MIRCERA. We are reducing our R&D expense guidance for 2013 as well. Our new guidance is between $175 million and $180 million as compared to our prior guidance of between $200 million and $220 million. The new guidance still includes $17 million of non-cash items such as stock-based compensation and depreciation expense. The decrease in our R&D expense is due primarily to the shift of the Phase 3 start for Nektar-181 until the middle of 2014 and lower recognized expenses for the Phase 3 study for Nektar 102. 2013 G&A is still anticipated to be between $42 million to $44 million which includes $10 million of non-cash items. Our interest expense will be approximately $19 million for 2013 with additional $22 million of non-cash interest expense related to the UCB’s Cimzia and Roche’s MIRCERA royalty monetization agreement. Let me reiterate that with the revised guidance I have just provided for 2013 we now plan to end the year with at least $250 million in cash and investments. With that I will open the call for questions.

(Operator Instructions). Our first question comes from Simos Simeonidis with Cowen and Company. Your line is open.

Hi, thank you for taking the questions. Howard you spoke about being able to dose first patient in the Phase III program of 181 sometimes in the middle of the year or next year. I believe you also mentioned you have not spoken with FDA yet you requested a meeting. So you have not had any discussions with them yet. You, I assume have spoken with your KOL advisors and internally. Can you give us any color on your thoughts on what the Phase III trial may look like? Any new ideas on how you may go about the issue with the Placebo response you saw in the Phase 2 trial?

Look it's a good question. First of all we have an accepted meeting request by the FDA. So we are just scheduling a date for that. They’ve already agreed to meet with us on this under fast track status they are certainly interested in how this program moves forward. We have had multiple meetings with our KOLs over the last few weeks as you can imagine. And one thing that as I said on the call one thing that everybody agrees with is this is a very effective analgesic. And the issue is how do we design a trial for a drug like this that allows a separation from drug and placebo and I think we are working on that and I think we have some ideas. I am not ready to share them yet but I think the KOLs and Nektar do have a number of ideas on how we could design a trial to clearly show that difference. One of the things that I think is very important to point out is we don’t want to commit the money to a full blown Phase 3 program without having some understanding of whether we are on the right track. I mean Nektar-181 is a unique opioid it's a new opioid no one has seen anything like this before. It has no likeability. It has very few side effects. Patients don’t really know they are taking an opioid and there is a number of issues that you have to work through in your Phase 3 programs when you have a drug that doesn’t hint that it's an opioid relative to drug and placebo. And of course it might mean a parallel arm placebo drug design, it might have to do with how we control background medications. There is a lot…

Okay great. And you know we are almost four months from the tentatively scheduled Adcom for I guess and naloxegol more may be part of the discussion, and I know probably AstraZeneca is going to be the one that involved in this if naloxegol is part of the discussion. But can you give us any thoughts on what you guys are doing in preparation and what your thoughts are if you are part of this discussion?

Yeah well as I said the FDA has not accepted officially the naloxegol NDA yet. We are expecting that this month and prior to that they are not going to discuss whether we are involved or not. Hopefully of course they are looking at all the programs that involve drug candidates to treat OIC. That said certainly if Naloxegol is a part of that process both AstraZeneca and Nektar will be heavily involved in that Adcom I can assure you and we are preparing for it. And off-course Nektar together with AstraZeneca are both preparing for the Adcom. We are bringing in experts to give us their opinions to guide us through the process and I think there is a tremendous amount of effort being put in place by AstraZeneca and Nektar to prepare for that Adcom should we be invited to with them.

Okay, great. Thank you very much for taking the questions.

(Operator Instructions). Our next question comes from Steve Byrne with Bank of America. Your line is open.

Hi, was interested in your level of interest in either having a separate arm or maybe even a smaller study in 181 to have an active comparator and to go head to head and on these issues that could differentiate 181 such as sleepiness, respiratory depression, dizziness what’s your level of interest in that?

Well look our level of interest in that is very high of course because I think one of the things we talk about with NKTR-181 is that it distinguishes itself in its profile in that it doesn’t cause drug liking and that’s a very important component but we’ve also observed is less sedation, drowsiness, respiratory depression those are tremendously critical components of therapy of a chronic opioid, therapy of chronic analgesic. So we are looking at that as a possibility in the design, whether we have an active control, whether we have a third arm that does that. I can’t comment on how this whole trial turns out yet. It probably will be another three, four months before we have this thing gelled. But I can tell you that it will be critical for us to show that we cause significantly less sedation. Now how we measure that, what we look at I can’t comment on that yet. But the fact that Nektar-181 has been observed many time now to cause significantly less sedation it was engineered to cause less sedation. I think that’s another tremendous advantage of the drug. And we do have to look at that there is lots of trial designs for that.

And on Amikacin Inhale the way it’s delivered right into the lung can you comment on its cidal activity versus some of the multi drug resistant pathogens out there?

I will let Rob Medve answer that question.

Steve this is Rob. Yes, Amikacin is very effective bacteria cidal agent. One of the keys to delivering the drug this way is a very small and controlled particle size which allows delivery of effective bacteria cidal agent into the smaller airway and alveoli where the actual bacteria resides or increases the concentration of the drug with the infection as opposed to the challenges of systemic administration where you are having the toxic effects of Amikacin throughout the body and not reaching nearly quite in the concentrations in the lung. So we’re very confident in the outcome of that delivery method.

And Rob can you just briefly explain what a biased partial muagonist is?

Sure, a great question Steve. It’s a -- a partial agonist -- I will start with, break it down in two pieces, a partial muagonist is one that binds the mureceptor but doesn’t cause full agonist activity. A common example of a drug like that would be buprenorphine, which is a partial agonist and of course that’s a very popular drug these days although not orally not available it's important to note. As far as the biased piece of that, once a drug binds to the receptor there is multiple steps from an opioid receptor that occur downstream. A biased ligand is one that doesn’t activate all of those receptors, all of those downstream mechanism so it binds the receptor but it doesn’t activate all of the downstream mechanisms. So it is a very desirable profile to have in a drug. It allows us see things like a ceiling effects on some of the negative side effects like respiratory depression including drug liking. And so what we observed in our pre-clinical data was exactly that ceiling effect on those negative side effects but no apparent limitation to analgesic efficiency. We’re very excited about that profile.

And it was critical to design a drug like that because one of the ways we’re able to get less likability and at the same time get an onset of action that is sufficient to treat acute pain required a combination of a moderate rate of entry into the CNS to get a very, very slow rate of entry into CNS you wouldn’t be working very well in acute pain drug. So more of a moderate rate of entry into the CNS coupled with this biased partial agonist qualities is what gives us a drug that is not liked, that has side effects and at the same time can treat acute pains. So I think it’s rather an important breakthrough in the field of opioid therapeutics.

Thank you.

Our next question comes from Bob Hazlett with ROTH Capital. Your line is open.

Thank you for taking the question. My question is regard to the strategic nature of Nektar-102 as you consider that molecule more broadly what is the urgency to potentially partner that molecule versus keep it in-house and develop it more broadly. How do you think about NKTR-102 as you are thinking about the strategic implications of the company more broadly?

Well look it’s a very good question and we think about it on a routine basis because obviously for a company the size of Nektar to have a portfolio, an extensive portfolio on pain and also a portfolio in the development of numerous drugs in oncology is perhaps a bit much to chew on. I can say this, there is a number of companies that continue to be interested in NKTR-102. As more and more information is gained about that molecule I think it’s becoming more and more apparent that it has lots of activity and can do things that a standard topoisomerase-1 inhibitor cannot do. That said, we have committed to take it all the way through development and I am committed to take it to the market but that doesn’t mean that I wouldn’t consider partnering opportunities if they make sense and I think the place they do make sense and I believe this is where you are alluding to is if you have a drug like this that’s got potential in metastatic breast cancer, potential in Avastin resistant gliomas, potentially non-small cell lung cancer and small cell lung cancer and without a doubt gastric cancer and a number of other oncology applications as well it takes a lot of resource to do all those trials and find the optimal setting for this drug. So we certainly do talk to companies on a regular basis. As I said there is interest in this molecule. At this point we’re moving it forward as quickly as we can and we haven’t made any decisions yet as to whether this drug is partnered or whether we keep it for ourselves but I can tell you it is a very interesting molecule.

Okay, thanks for the color.

And I am currently showing no further questions. I will now turn the call back over to Howard Robin for closing remarks.

Well thank you everyone for joining us this afternoon. I want to also thank all of our employees for their tremendous efforts in building such an impressive portfolio and I want to thank our shareholders for their continued support. We expect to see many of you at the Brean Murray conference and the JPMorgan conferences. So thank you very much for attending. Good afternoon.

Thank you ladies and gentlemen that does conclude today’s conference. You may all disconnect and have a wonderful day.