NEKTAR

Marion REUMAUX, Camille SAUVAGE, Cécile TARNUSFaculty of Pharmacy, Lille2,

March 2010

Biopharmaceutical company developing a robust pipeline of novel therapeutics based on its advanced polymer conjugate chemistry

technology platform.

Objective: create value by advancing our lead drug candidates through early to mid-stage clinical

development.

Corporate statut : Founded in 1990 in California under the name of Inhale therapeutic systemChief Executive Officer : Howard W. RobinPublicly-traded (NASDQ: NKTR) since 1994

350 employees

Localisation:

strategyreduce risks and time associated with drug

development – Drugs approved– Pharmacologic target known and approved=the known safety and efficacy.

=approval in indications for which the parent drugs have not been studied or approved

PartnersStrategy of development : Partnerships and co-development agreements with pharmaceutical companies

partnering strategy •t

o fund further clinical development

•manage the global regulatory filing process

•manage the marketing

•sell the approved drugs

•depend on factors:•the cost •complex

ity of development,

•marketing

•commercialization needs

Advantages of these partnering for Nektar

• few needs of cash to fund the end of developpment and others part of drug life.

• Royalties function of sales in the different countries.

• payment for licence exploitation.

Conditions of partnering

Obligation of partner:

Obligation of Nektar:

Possible Responsibility for:- raw material manufacturing - medical device manufacturing

Responsible for:- future clinical development- commercialization costs- worldwide regulatory filings

Termination of Agreements•10

years after first commercialization in a country

•upon the expiration of their last relevant patent containing a valid claim

•if marketing authorization is withdrawn

•If marketing is no longer feasible due to certain circumstances

9 approved products for partners

Therapeutics areas

CNS/ Pain

Immunology/

Inflammation

Anti-infectivesHemophilia

Others

Oncology

Different therapeutic area of R&D

Therapeutics areas

CNS/ Pain

Immunology/

Inflammation

Anti-infectivesHemophilia

Others

Oncology

Therapeutics areas

CNS/ Pain

Immunology/

Inflammation

Anti-infectivesHemophilia

Others

Oncology

Therapeutics areas

CNS/ Pain

Immunology/

Inflammation

Anti-infectivesHemophilia

Others

Oncology

Therapeutics areas

CNS/ Pain

Immunology/ Inflammation

Anti-infectives

Hemophilia

Others

Oncology

Therapeutics areas

CNS/ Pain

Immunology/ Inflammation

Anti-infectives

Hemophilia

Others

Oncology

NKTR-102-Phase II- 4 different indications- No partner

NKTR-105-Phase I-No partner

NKTR-118-Phase II-AstraZenecaNKTR-119-Preclinical-AstraZenecaNKTR-181,NKTR-194NKTR-171-Preclinical-No partner

NKTR-125-Préclinical-No partnerCimzia- new indication-UCB

Cipro inhale-Phase II-BayerNKTR-061-Phase II-BayerNKTR-063-Phase I-No partnerNKTR-140-Preclinical-No partner

Factor VIII modified-Preclinical-Baxter

MAP0004-Phase III-MAPHematide-Phase III-AffymaxCDP791-Phase II-UCB

From inhale therapeutics system to nektar therapeutics

1990

Creation of INHALE THERAPEUTICS SYSTEMS

The begining of the story…

advantages of pulmonary delivery

• greater patient compliance (vs injection)• rapid onset of action• more efficient and targeted treatment of lung

disorders• for systemic and local drug administration

Inhale therapeutic productsproducts Indication Phase Partners

Cipro inhal Cystic Fibrosis Infection

Phase II Bayer

NKTR-061(inahled

amikacin)

Gram-negative pneumonia

Phase II Bayer

NKTR-063(inhaled

vancomycin)

Gram-positive pneumonia

Phase I

MAP004 Migraine Phase III MAP

Exubera diabetes AMM 2006 Pfizer

1990

1995

Exubera ® :inhaled insulindiabetic treatment

Neulasta ® : - stimulates the production

of neutrophils- neutropenia treatment

Nektar and Pfizer : inhaled insulin

An important market (2007)

• 2.5 millions in France• 246 millions in the world

Almost 8 % of the European and north American population

• In 2025 : estimate to 300 millions by OMS

Medical need

• Discovery of insulin 90 years ago converted insulin-dependent diabetes from a fatal to a treatable disease

• At that time, scientists were already looking for a more pleasant and less damaging way to administer the hormone.

• Admittedly, today's throwaway syringes with ultra-thin are a huge improvement. And the insulin itself produces far fewer side effects than the impure animal insulins available then.

But many diabetics still yearn for an alternative to injection

Challenges to Alternate of Insulin Delivery• Oral administration: limited bioavailability• Transdermal: delivery and efficacy insufficient so far• Intranasal: limited bioavailability, enhancers needed

• Pulmonary: provides alternative route

January 1995Inhale and Pfizer announced their

collaboration

June 1998 Trials (IIb) indicate

their inhaled-insulin product is as

effective as insulin shots

November 1998 Pfizer and Hoechst

Marion Roussel (Sanofi aventis) go into partnership

to help foot the bill -for the clinical development programme- building the Frankfurt production plant-Aggreement : jointy manufacture, co-develop and co-promote

Liability of Inhale : -supplying the delivery devices-And insulin powderAchievement receive a share of the royalties on sales

janvier 2006Pfizer buys exubera

part to Sanofi Aventis (for 1.3

milliard $)

AMM

Novembre 2007payment of $135

million from Pfizer in satisfaction of all

remaining obligations

Marketing

janvier 2006pfizer rachete les parts d’exubéra a

sanofi aventis (pour 1.3 milliard de

dollars)

AMM

Novembre 2007payment of $135

million from Pfizer in satisfaction of all

remaining obligations

on October Pfizer made a jolting turnabout, announcing it was pulling

the plug on Exubera, returning all rights to Nektar.

Failure of Exubera• higher prices for a product that offered no

medical advantage over injected drugs• unwieldy and not very discreet• Exubera caused a slight decline in lung

function.• Problematic delivery• the need for spirometry (before and periodically)

• Lack of long-term safety data.Scott Joy, associate professor of medicine at Duke University Medical Center said, “I have not prescribed Exubera to a single patient yet, with the reason being that I don’t have a spirometer here in the office.”

Some insurance companies are refusing to pay

Coup de grace in 2007

occurrence of lung cancer

Impact to nektar

- total revenue from Pfizer: in % of nektar total revenue

- For the termination agreement they received$135.0 million from Pfizer.

- For manufacturing termination agreement with Bespak and Tech Group they paid $39.9 million.

2006 2007 200864% 67% 0%

• Until april 2008, nektar search a new partner to fund exubera commercial program.

• They kept maintenance agreement with both Pfizer and Tech Group to preserve key personnel and manufacturing capacity.

• But lung cancer increased and they decide to stop all collaboration with potentiel partner for exubera

1990

1995

1997

Pegasys ® : treatment of Hepatitis C

Micera®:- a continuous erythropoietin receptor

activator- treatment of anemia associated with

chronic kidney disease

1990

2000

1995

2001

1997

Acquisition of

Somavert ® : - human growth hormon receptor antagonist- treatment of acromegaly

Cimzia®: - at the moment 2 indications -crohn desease- rheumatoid arthritis

PEG-Intron®:-a pegylated recombinan human interferon-alpha -treatment of Hepatitis C

Pegylation technology

PEGylation technology

•Significant business: in 2005, sales for Pegyleted proteins amounted to more than $5 billion

•PEGylation create blockbusters products, such as PEG-Intron® and Pegasys®

•Improve the pharmacological property of a drug, but it has also has to be considered as a life cycle extention

PEGylation interests• Non-toxic, non-antigenic, non-immunogenic• Improve safety• Different PD and PK properties but the same

target

INCREASE STABILITY / HALF-TIME

Reduced dosing

frequency

PEGylation interestsCreat new drugs with optimized

properties

Reposition approves products for new indications

Rescue non-viable drug candidates

Multiple therapeutics areas

PEGylation limitationsReactions are not hightly specific, Pegylation can

be incomplete

Traditional PEG systems are polydisperse => problem for Quality Control

Now => monodisperse Pegylation

Can accumulated in the liver

Loss of biological activity but it is compensated by the prolonged body half time

Nektar: 4 strategies

Small Molecule Polymer Conjugates

• Can pass trough intestinal gate to act on a cell surface target receptor• Or, reduced transport across specific membrane barriers in the body, such as the blood-brain barrier( => depend on the type of polymer used)

The drug can also be engineered to cross cell membranes to reach an intracellular target

Increase oral bioavailability NKTR-118, NKTR-140

and NKTR-171

Pro-Drug Conjugates

Several drug molecules attached to a large molecular weight polymer in a multi-arm architecture

Programmable releasable linkers

The active parent molecule is cleaved from the prodrug through pH or enzymatic hydrolysis

Above all for oncolytics drugs

NKTR-102 and NKTR-105

Large Molecule Polymer Conjugates

• Peptides => smaller in size than biologics•Nektar has designed a novel hydrolyzable linker•Half life extended•Also for proteins and larger molecules•No drug candidate yet in there pipeline

The linkage allows for a programmed and complete release of the therapeutic to optimize its bioactivity and allow it to bind to this receptor in its natural state.

Antibody Fragment Conjugates• Branched PEG conjugated to antibody fragment => become the Fc fragment• Stable or degradable linkage

AVANTAGESImprove toxicity profileExtend half-lifeReduce glomerular filtration rateReduce antigenicity

1990

2000

2002

1995

2001

1997

Acquisition of Macugen ®: in treating age-related

macular degeneration

1990

2000

2002

2005

1995

2001

1997

Acquisition of

2003

Inhale Therapeutics Systems change to NEKTAR THERAPEUTIC

Acquisition of AEROGEN

• Aerogen is a specialty medical device company• Nektar Therapeutics buy drug delivery

specialist Aerogen for $32 million

boost its position in respiratory

technologies.

1990

2000

2002

2005

1995

2001

1997

Acquisition of

2007

2007Collaboration with Bayer HealthCare

• NKTR-061 ( inhaled amikacin) • Indication: Gram-negative pneumonias,

• used: with conventional mechanical ventilators or as a hand-held ‘off-vent’.

result of complications of other

patient conditions or surgeries

1990

2000

2002

2005

2007

1995

2001

1997

Acquisition of

2008

2008sale and transfer part of research to Novartis

Pharma AGOn December 31, 2008

Pulmonary area acquisition

• To 115 millions $• Assignment concerned:

– Research– Development– Formulation and manufacturing technology– Equipement,140 personnel– Intellectuel propreties

• retained all rights to BAY41-6551, partnered with Bayer Healthcare + royalty rights for the Cipro Inhale

1990

2000

2002

2005

2007

1995

2001

1997

Acquisition of

2008

2009

NKTR-118 and NKTR-119 as study case

Deal between Nektar and AstraZenaca for NKTR-118 andNKTR-119 developmentInitial payment: $125 millionTotal payement: $1.4 billion

?20092007 2010

NKTR-118: a novel PEGylated naloxol conjugate for the treatement of opioid-bowel dysfunction (OBD)

Traditional constipation treatment • not so effective

PEGylated naloxol • Direct action on opiod-receptor

Commercial opportunity for prevention and treatment > $1 billion

OBD 40% of patients taking opioid

naloxol

NKTR-118: a novel PEGylated naloxol conjugate for the treatement of opioid-bowel dysfunction (OBD)

Central μ-opioid receptors

=> analgesia

peripheral μ-opioid receptors => inibits bowel

fonctionPeripheral antagonists

disloge opiod

No adverse GI effects

No crossing of the blood-brain barrier

Opioid agonists still

activating receptors

No reversal analgesia

Study design

Results

Conclusion

• Oral NKTR-118 restores GI function by increasing the frequency of SBMs

• No reversal or no reduction of opioid-mediated analgesia• Well tolerated, side effects being dose dependent

NKTR-118 => NKTR-119NKTR-118 NKTR-119

• Co-formulation: NKTR-118 and opioid

• Indication: Analgesic for pain

• Clinical programme to demonstrate proo-of-principle in humans initiated in 2009

• Indication: Opiod bowel dysfunction

• Phase 2 complete

FINANCIAL DATA

2006 2007 2008 20090

50

100

150

200

250

300

collaboration and other

product sales and royal-ties

Total revenue (millions)

$71,931

$217,718

$273,027

$90,185

Bayer24%

UCB16%

Novartis15%

Roche14%

Others31%

Different collaboration deals (2008)

Revenue

2006 2007 20080%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Revenue by geographic area

other countriesUSEU

R&D expenses (millions)

2006 2007 2008 20090

20

40

60

80

100

120

140

160

180

$149,381

$95,109

$154,417$153,575

• Possibility of repurchase ?

• many partnering with big pharma

• Desire to lead their product from research to commercialization.

Futur for Nektar

STRENGTH•Strong and strategic alliance•Innovating technological platform

•Blockbusters

•diverse sectors of applications

•Various pipeline

WEAKNESSES• Financially dependant on its partnerships• R&D budget too high• few products on the market•Since the pulmonary sector sale => only one technological platform

OPPORTUNITIES• Short term: to strengthen the partners network

• Long term: develop its own molecule to commercialization

THREATS• Competitors•Fail of NKTR-118 and 119

SWOT analysis

Thanks for your attention