Making good on its May pledge to reduce costs, Nektar Therapeutics
The deal Nektar inked with Bayer covers an inhaled version of the antibiotic amikacin, which is in phase 2 testing at Nektar. In return for a co-promotion profit-sharing deal in the U.S. and commercialization rights elsewhere, Bayer gave Nektar a cool $50 million upfront, a possible $125 million more in milestone payments, and will now cover the clinical and regulatory development costs of the drug.
In May Nektar announced that it was planning to reduce costs by $65 million annually in order to get itself closer to profitability and have more cash available to develop its drug pipeline. Partnering out its aerosolized amikacin program will likely save it in the low double-digit millions of dollars in R&D costs annually in the future. In the most recently ended quarter, the drug accounted for $2.4 million of Nektar's R&D spending.
Nektar's inhalable amikacin produced positive phase 2a study results in treating drug resistant pneumonia earlier in the year. Nektar releases its second-quarter financial results tomorrow so there will likely be more information available on the conference call about the Bayer partnership and development path for the drug.
The extra $50 million in upfront cash from this deal is a boon to Nektar's $400 million in cash and investments (as of the first quarter) and will help stave off any potential dilutive financings in the future. Considering the dismal sales of lead drug Exubera in the past quarter, which marketing partner Pfizer
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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.
