Wednesday, June 14, 2017

Nektar Therapeutics: A Sweet Or Sour Investment?


  • In distancing itself from the failed inhaled-insulin Exubera, Nektar has been enjoying much corporate success.
  • Having two FDA-approved products and its proven technology (licensed to various firms), Nektar is generating meaningful sales.
  • Despite temporarily lowered its earnings, the increased spending on research and development will catapult sales prospects.
  • With 150% share price appreciation in the past five years, valuation metrics indicate that the firm is still a bargain.

After a decade plus of failed investment in the inhaled insulin, Exubera, Pfizer Inc. (NYSE:PFE) cut the loses via terminating its partnership with Nektar Therapeutics (NASDAQ:NKTR) on Oct. 18, 2007. Next year, Nektar gave up the hope for inhaled insulin by terminating all negotiations (with potential marketing partners) for the "the bong."
Notably, Exubera failed due to user inconvenience, and more importantly, the increased incidence of lung cancer found in smokers. As if inhaled insulin is an albatross, MannKind Corporation (NASDAQ:MNKD is also struggling to generate meaningful sales for its FDA-approved inhaled insulin Afrezza (despite the drug's favorable efficacy and safety profiles).
Whether the higher cancer cases in patients who used Exubera is due to insulin or the tobacco's deleterious effects is still up to the jury. Nevertheless, Elam Nevan (the former Vice President of Pfizer Pulmonary Division in charge of the Exubera development) has moved on. The Harvard graduate is now focusing on innovating a once-weekly insulin for AntriBio (OTC:ANTB).
In similar fashion, Nektar has shed off the dead weight of inhaled insulin. For almost a decade, the firm has refocused its efforts to fruitful therapeutic designs.
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