Condensed Consolidated Financial Statement Details

3 Months Ended

Mar. 31, 2025

Condensed Consolidated Financial Statement Details

Note 3 — Condensed Consolidated Financial Statement Details

Other Current Assets

Other current assets consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Prepaid research and development expenses	$	7,359	$	1,947
Interest and other non-trade receivables		1,714		1,609
Other prepaid expenses		2,208		2,510
Total other current assets	$	11,281	$	6,066

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Accrued compensation	$	5,026	$	2,832
Accrued research and development expenses		11,819		14,453
Accrued contract termination costs		2,825		2,767
Other accrued expenses		11,584		9,920
Total accrued expenses	$	31,254	$	29,972

Liabilities Related to the Sales of Future Royalties

In 2012 and 2020, we sold to RPI Finance Trust (RPI) and entities managed by Healthcare Royalty Management, LLC (HCR), respectively, our rights to receive royalties under our license and manufacturing agreements with certain pharmaceutical partners under the 2012 Purchase and Sale Agreement and the 2020 Purchase and Sale Agreement, respectively. We account for these transactions as debt and recognize non-cash royalty revenue and non-cash interest expense to amortize the proceeds over the lives of the respective arrangements. We periodically update our prospective non-cash interest rate based on our estimates of future royalties. As of March 31, 2025, our imputed interest rate for the arrangement with HCR was 23%.

The original 2020 Purchase and Sale Agreement was to expire -- and wherein the right to receive royalties would revert to us -- if HCR received aggregate royalties of $210.0 million on or prior to December 31, 2025 (the 2025 Threshold), or, if the 2025 Threshold was not achieved by December 31, 2025, when HCR received aggregate royalties of $240.0 million. On March 4, 2024, Nektar and HCR amended the original 2020 Purchase and Sale Agreement (the Amendment), pursuant to which the parties agreed to remove our reversionary rights in the royalties in exchange for a $15.0 million payment from HCR. Accordingly, HCR will receive all future royalties of the products, and none of these royalties will return to Nektar. We accounted for the Amendment as a modification of the existing arrangement, and therefore recorded the $15.0 million proceeds as an increase to the liability.

The following is a reconciliation of the changes in our liabilities related to the sales of future royalties for the three months ended March 31, 2025 (in thousands):


	Three Months Ended March 31, 2025
	2012 Purchase and Sale Agreement			2020 Purchase and Sale Agreement			Total
Liabilities related to the sales of future royalties, net – beginning balance	$	7,197		$	84,579		$	91,776
Non-cash royalty revenue		(1,756	)		(8,704	)		(10,460	)
Non-cash interest expense		672			4,302			4,974
Amortization of transaction costs		—			32			32
Liabilities related to the sales of future royalties, net – ending balance	$	6,113		$	80,209		$	86,322