Bayer has teamed up with Nektar Therapeutics in a deal worth up to $175 million which will see the firms work together to develop an inhaled antibiotic.

The companies will develop and commercialise NKTR-061, using Nektar's proprietary pulmonary technology to deliver a specially-formulated amikacin, an aminoglycoside antibiotic, for inhalation deep into the lung. NKTR-061 is currently in Phase II trials for the adjunctive therapy of ventilated patients with hospital-acquired, Gram-negative pneumonias.

Under the financial terms of the deal, Nektar will receive milestone payments of up to $175 million, including $50 million upfront. If everything goes smoothly, the two firms have agreed to a co-promotion of the product in the USA and to share profits, while in other markets Nektar will receive tiered performance royalties up to a maximum of 30%. Bayer will be responsible for global clinical development, regulatory strategy, manufacturing and marketing of the product, with its US partner participating in all aspects of decision-making and governance”.

Bayer board member Ulrich Kostlin said that the deal is a natural fit with his firm’s strategy of developing and marketing specialty pharmaceuticals. He added that “there is a large, unmet medical need for a new approach to fight Gram-negative pneumonias, particularly in ventilated patients infected with difficult to treat, resistant organisms” and Nektar's pulmonary drug delivery technology “offers a very promising approach.”

The deal represents the companies’ second collaboration as they signed a deal in 2005 to jointly develop inhaled ciprofloxacin as a potential dry powder therapy for treating pseudomonal infections in patients suffering from cystic fibrosis.

Good news for Nektar after Exubera disappointments

Linking up again with Bayer is a welcome boost for Nektar which, in a bid to cut costs, announced plans at the end of May to cut 25% of its workforce, around 200 employees, a move which will see the firm take a restructuring charge in 2007 of $10-$12

million.

Nektar is best-known for co-developing the inhalable insulin product Exubera which is sold by Pfizer. However its sales have been pretty disastrous and the New York-based behemoth is investing heavily on marketing for one last push, though Nektar has vehemently dismissed any link between Exubera’s poor performance and its own restructuring plans.