Nektar Takes A Deep Breath

Deep breath in. Deep breath out. Nektar execs, have you found your quiet place, yet?

It's been a stressful few months for Nektar employees. The company's 13-year marriage with Pfizer soured last October when the pharma unexpectedly decided to stop selling its inhaled insulin Exubera. True, Pfizer did cough up a hefty divorce settlement--a $135 million forgive-me gift, plus a promise to help with insulin supply and on-going clinical trials. (For more on the future of inhaled insulin, see here.)

Yesterday came the news that Nektar is eliminating approximately 150 positions--110 existing jobs plus 40 unfilled openings--as it restructures the company to "transition form a drug delivery service provider to a therapuetics drug development organization." In addition, the company announced that Hoyoung Huh, the company's COO and head of its pegylation business unit, is leaving to become CEO of BiPar Sciences, an up-and-coming biotech developing oncology therapies.

We've said it before. (No doubt, we'll say it again.) It's a terrible time to be in drug delivery. Making money in this space has always been tough--it's not enough anymore to take an existing molecule and dress it up with a PEG molecule to extend its shelf-life or aerosolize it for delivery to the lungs. Payers and physicians want proof that a new formulation isn't just convenient, but that it's superior to existing available medicines. As David Steinberg, an analyst with Deutsche Bank, told START UP in December: "The old model of drug delivery is completely broken down. To be successful you have to think far more innovatively."

Thing is, it takes a lot of money--and risk--to engineer a delivery system robust enough to deliver a real therapeutic advantage. Look at the field's lone success story in recent years--XenoPort. The company's share price has increased more than six-fold since its 2005 IPO, thanks to the success of its gabapentin pro-drug, XP13512, for restless leg syndrome and neuropathic pain. Last February GlaxoSmithKline agreed to fork over $75 million in cash and another $500 million in development, regulatory, and sales milestones for the compound. (Just for the record, Xenoport raised approximately $270 million in equity capital and another $160 million from partners to get enough data to convince the pharma of XP13512's value.)

So, the big lesson from XenoPort's success? Delivery technology ain't enough. XenoPort was only able to sign this monster deal with GSK because XP13512 is a new chemical entity with hard-to-duplicate molecular advantages. (The nifty formulation technology is an added bonus to investors -- a key part of its discovery platform.)

Of course, there is a corollary to this lesson (This IS a Windhover publication.) To be successful in drug delivery today means spending research dollars on two fronts: not only do you have to spend money to engineer the delivery system, but you also have to spend money to discover and develop novel, first-in-class or best-in-class compounds. Which leads this IN VIVO blogger to wonder, why even bother with the delivery piece of the puzzle?

Seem's like Nektar's board and CEO, Howard Robin, have been asking the same question. As part of the company's restructuring, Robin noted in a press release that "We are transforming Nektar into a world-class drug development company."

My friends and colleagues know I'm a big believer in the "I think I can" strategy. But it's tough to see how Nektar's transformation will occur near term. True, the company's inhaled amikacin, which is being co-developed with Bayer AG, is expected to enter Phase III clinical trials later this year, and its two leading PEGylated small molecule programs, PEG-irinotecan and oral PEG-naloxol, just entered Phase II clinical trials. But will there be the leadership to push these two products through development now that Nektar's PEG champion and resident brainiac, Hoyoung Huh, is jumping ship to take the helm of BiPar Sciences?

Maybe "the decision to step down as COO was a difficult one," as Huh asserts in another press release issued today. After all, he hasn't severed ties with the company completely. He'll be serving on the company's Board of Directors until 2009 or until a replacement has been identified according to SEC documents. Or maybe, Huh, whose CV lists an MD, a PhD, and a stint as a McKinsey partner, saw the darkening skies and approaching stormy seas and left for the relatively calmer waters of private biotech.

February 27 should be an interesting day. That's when Nektar will release results for the fourth quarter and full year of 2007. Meantime, Nektar employees, remember: deep breath in; deep breath out.

Photo courtesy of Flickr user Transguyjay through a creative commons license.

Take a Deep Breath, Pfizer, and Think Again

It's just what Pfizer didn't need: another expensive failure.

Less than six months after the much-vaunted Lipitor-replacement torcetrapib tanked, it's now official that the Exubera launch is a flop. The numbers say it, the newspapers say it, and even Pfizer’s own executives acknowledge that “we still need to figure out how to market Exubera.”

Not surprising, perhaps—Pfizer isn’t exactly a large molecule expert, and Exubera, as the first ever inhaled insulin, presents even more challenges for its sponsor than your average biologic.

First, doctors must be convinced of the drug’s advantages over existing treatments; not just longer-acting insulins such as Levemir, marketed by diabetes-leader Novo Nordisk, but also since late 2006, Merck & Co.’s star DPP-4 inhibitor sitagliptin (Januvia), a rare industry success story (to be followed by recently-approved Janumet, a combination of Januvia and metformin).

Then, time-constrained docs must learn how the inhaler device works (and adapt dosages, which are different when insulin is inhaled rather than injected). If they get past that hurdle--and aren’t swayed by detractors such as Dr. John Buse, president-elect of the American Diabetes Association, who says that Exubera may present a safety risk in Type I diabetics--then their patients must get used to carrying an umbrella-sized device around with them (and paying more for the privilege: Exubera costs $2-3 more per day than injectable insulin).

So Exubera is being chosen for just one in 500 insulin prescriptions in the US, despite Pfizer’s investment—900 part-time diabetes educators, over six months of doc-targeted marketing, and considerable sales rep resource, in part diverted from other more profitable drugs. Analysts have slashed Exubera sales forecasts, in some cases to barely more than $300 million by 2012.

But Pfizer’s not giving up. “Don’t write Exubera off,” warns a senior executive at Pfizer. “We’ve screwed up before on launch, and the drug has come back.”

The company will soon launch a fresh marketing campaign, a summer DTC advertising splurge (very unfashionable), and reckons that transferring Exubera promotion to its highly successful CV team might make the difference.

Chances are it won’t. Marketing inhaled insulin—effectively a niche drug, despite initial forecasts of peak-sales of up to $2 billion—isn’t like marketing a primary care pill. You can’t use the same tricks.

“Patients will be inhaling insulin over the next few years,” insist Pfizer executives. Sure, but how many, and whose product? By the time Pfizer figures out its promotional game, competition will be even worse, even if there is a market. The handful of inhaled insulin alternatives in Exubera's wake have smaller, more discreet devices, and will benefit from Pfizer's experience in figuring out how to make breathing in one's insulin more attractive than injecting it.

“You may wonder whether Exubera could be right for you,” says Pfizer’s product website to prospective customers. Despite its brave face, Pfizer must be wondering whether this drug is right for it, too.

But What if I Drool?

A ton of resources at Big Pharma are devoted to developing or licensing drug delivery technologies, for sure. But here's a publicly funded organization putting its money where, well, where its mouth is.

European researchers are developing an orally implantable drug delivery system that could improve compliance in patients on a wide variety of therapies. According to the developers, IntelliDrug, the fake-molar implant works thusly:

The micro-system comprises a medication reservoir and release mechanism, a built-in intelligence, micro-sensors and micro-actuators. IntelliDrug device will be placed in the oral cavity. The medicine is contained in the small reservoir. It will be released in a controlled manner accordingly to patient’s needs, for periods lasting days, weeks or months. The device will be reloaded in a simple non-invasive way. The released medicine will be either absorbed by the oral mucosa or swallowed by the patient.

Actual implant sans toothbrush and smile.

Source: BBC (via Onpharma)