A Medical Device Daily

Nektar Therapeutics (San Carlos, California) and the University of Alabama in Huntsville (UAH) reported the settlement of UAH's litigation against Nektar and Dr. Milton Harris, the founder of Nektar Alabama and a former employee of UAH, in exchange for a payment of $25 million in cash. Nektar and Harris made an up-front joint payment of $15 million to UAH, and Nektar will pay UAH the sum of $1 million a year for 10 years.

UAH said it would put the money toward its endowment and to fund scholarships, including chemistry and biology programs.

UAH agrees to dismiss all claims related to the Nektar PEGylation patent portfolio, and Nektar agrees to dismiss all counterclaims.

“This settlement provides a substantial benefit to the university and will provide numerous opportunities for UAH in the years to come,” said Dr. Frank Franz, president of UAH.

The settlement “helps maintain our focus on improving and expanding our PEGylation business,” said Robert Chess, acting president/CEO and chairman of Nektar. “We also believe that the support of the [UAH's] science and educational missions is consistent with Nektar's vision and values.”

Advanced PEGylation has the potential to improve the safety and efficacy of therapeutic agents by increasing drug circulation time in the bloodstream, decreasing immunogenicity and dosing frequency, increasing bioavailability and improving drug solubility and stability. It is based on the use of non-toxic polyethylene glycol (PEG) polymers, which can be attached to most major drug classes . . . and is used in eight approved products in the U.S. and/or Europe today.”

Nektar is the developer of the inhaler device used to deliver the inhaled insulin product Exubera from Pfizer (New York).

In other legalities,Tenet Healthcare (Dallas) last week reported that insurance companies paid it $340 million to cover claims from Hurricane Katrina, which damaged five of its hospitals in the New Orleans area and one in Biloxi, Mississippi. Tenet said it settled with the insurers to avoid court action that could have lasted “several years.”

Tenet said it was one of the first major commercial property insurance settlements from last summer's hurricane. The settlement was paid by insurers that underwrote Tenet's property insurance in 2005 and 2006.