Nektar Therapeutics Inc. cut 150 jobs as part of a restructuring effort designed to transition the company away from drug delivery services and toward development of its pipeline.

It's a transition that started early last year when Nektar appointed Howard Robin as president and CEO. In April, Robin led the company in creating two new business units to focus on drug development: one for pulmonary therapeutics and one for PEGylation-based therapeutics. Then in May, Nektar shuffled top level staff and cut its work force by 25 percent, or about 200 positions. (See BioWorld Today, May 25, 2007.)

Tuesday's restructuring was likely the culmination of Robin's plan, according to J.P. Morgan Securities Inc. analyst Cory Kasimov. He added that Nektar's "bloated cost structure" previously had been a source of investor criticism and said that management is "doing what appears to be a good job taking care of the problem."

The May restructuring shaved about $65 million from Nektar's annual burn rate. Tim Warner, Nektar's senior vice president of investor relations and corporate affairs, declined to disclose how much money the additional cuts would save. As of Sept. 30, Nektar reported $452.6 million in cash, equivalents and short-term investments after posting a loss of $18.6 million for the quarter.

Nektar owes its healthy cash balance to its history in pulmonary and PEGylation-based drug delivery. The company has applied its technologies to a number of products on behalf of various partners, resulting in a revenue stream totaling $207.3 million for the first nine months of 2007. Approved products that use Nektar's delivery technologies include Neulasta (pegfilgrastim, Amgen Inc.), Cimzia (certolizumab pegol, UCB SA), Pegasys (pegylated interferon alfa-2a, F. Hoffmann-La Roche Ltd.) and several others.

One of the approved products to use Nektar's pulmonary delivery technology is the inhaled insulin drug, Exubera. Partner Pfizer Inc. dropped the product last fall due to lagging sales, paying Nektar a $135 million fee and agreeing to help transfer the product to a new partner. (See BioWorld Today, Oct. 19, 2007, and Nov. 14, 2007.)

Warner said Nektar is "in the midst" of identifying a new partner for Exubera and for a next-generation inhaled insulin formation in Phase I.

While Nektar's old strategy involved leaving development and commercialization up to its partners, the company plans to take a much more active role moving forward, Warner said. He pointed to the deal signed last year with Bayer HealthCare AG for the Phase II inhaled antibiotic NKTR-061 as the type of arrangement Nektar plans to do more of.

In that deal, Bayer agreed to pay Nektar $50 million up front and $125 million in milestones for worldwide rights to NKTR-061. Bayer took over chief development responsibility following Phase II, but Nektar retained a co-promote option and the right to almost half of the profits from U.S. sales. (See BioWorld Today, Aug. 7, 2007.)

NKTR-061 is slated to begin Phase III trials later this year.

Other products in Nektar's internal pipeline that could become the subject of similar deals include NKTR-102 (PEG-irinotecan) for solid tumors and NKTR-118 (oral PEG-naloxol) for opioid bowel dysfunction. Both PEGylated small-molecule programs are in Phase II, with data expected around the middle of next year.

Warner said Nektar has a number of earlier-stage opportunities in both its pulmonary and PEGylation pipelines.

Shares of San Carlos, Calif.-based Nektar (NASDAQ:NKTR) rose 5 cents to close at $6.50 on Tuesday.