West Coast Editor

Pfizer Inc.'s agreement to pay Nektar Therapeutics Inc. $135 million for dropping Exubera resolves all contractual matters related to the inhaled insulin, and the pharma giant is helping in the transfer of remaining rights and benefits to a new partner, yet to be chosen.

Tim Warner, vice president of investor relations and corporate affairs for San Carlos, Calif.-based Nektar, said "multiple conversations" are under way. "We're glad to have Pfizer on board, in terms of working on the transition with us," Warner said.

Nektar's stock (NASDAQ:NKTR) closed Tuesday at $6.12, up 32 cents. Pfizer's shares (NYSE:PFE) ended the day at $23.55, up 53 cents.

Last month, New York-based Pfizer said it would give up on slow-selling Exubera, which consists of dry insulin that is inhaled through a handheld, 4-ounce inhaler. The Exubera device creates a cloud of insulin powder that quickly reaches the bloodstream. (See BioWorld Today, Oct. 19, 2007.)

Pipeline-strapped, generics-threatened Pfizer in early 2006 bought Exubera rights that previously were shared in a development and promotion deal with Sanofi-Aventis, of Paris, for $1.3 billion. Nektar stood to get royalties on sales, which analysts once estimated could reach $2 billion.

Soon after its approval in 2006, though, the drug hit manufacturing problems and then difficulty winning patient acceptance. Second-quarter 2007 sales totaled only $4 million.

"We've done a lot of market research, and I personally have spoken to a number of patients who use Exubera," Warner said. "It takes just a few minutes to teach them how to use the device," which is far preferable to "giving yourself an injection in the middle of a restaurant," he added.

Reducing injections in any setting has appeal for most diabetics, he noted.

"Let's say you're taking eight shots per day," Warner said. "Multiply that by 365. If you can reduce that [number] by some amount, and have a possibly better clinical impact, that would be great." The benefit varies from patient to patient, he allowed, but "there are plenty of people on Exubera who have it reimbursed."

The next-generation insulin (NGI) after Exubera is in Phase I trials, and involves a "much smaller device," Warner said. "I can hide it in my hand. We believe it's superior to all other devices that are in development for so-called second-generation inhaled insulin."

The NGI drug consists of "Exubera with fewer excipients than in the FDA-approved version," which is another advantage, Warner said.

Nektar still has a joint development program with Pfizer that has reached Phase II trials for PEGylated human growth hormone therapy to treat short stature and growth problems.

Others going ahead with inhaled insulin include Indianapolis-based Eli Lilly and Co., which has a Phase III-stage product. Novo Nordisk A/S, of Bagsvaerd, Denmark, has Phase III trials under way with AERx iDMS, another inhaled version, with royalties due Aradigm Corp., of Hayward, Calif., if that product is approved. A third Phase III player is MannKind Corp., of Valencia, Calif.

The quest for needle-free insulin also includes an oral version nearing Phase II trials by Biocon Ltd., of Bangalore, India.