Novartis has signed an agreement to acquire the pulmonary drug delivery unit of the USA’s Nektar Therapeutics for $115 million in cash.

Under the terms of the deal, the Swiss major will assume ownership of certain dry powder and liquid pulmonary formulation and manufacturing assets. 140 Nektar personnel will join Novartis and the former firm will transfer manufacturing and royalty rights to the tobramycin inhalation powder (TIP) programme, which is already partnered with the Basel-based group.

Nektar will retain ownership of its Bayer-partnered programme NKTR-061 (inhaled amikacin), scheduled to enter Phase III clinical trials by year-end, and royalties to ciprofloxacin inhaled powder, which is also partnered with the German firm. It will also retain NKTR-063 (inhaled vancomycin), which is due to enter Phase II trials in the USA early next year.

Nektar will also retain all intellectual property specific to inhaled insulin, arguably the area the firm is best known for. Last November, Nektar received a $135 million one-time payment from Pfizer after the drugs behemoth decided to stop marketing the diabetes treatment Exubera.

Howard Robin, Nektar’s chief executive, said the agreement “will allow us to focus our efforts on the development of novel therapeutics using our PEGylation and conjugate chemistry-based drug development platforms". He added that the transaction “also strengthens our balance sheet and significantly reduces expenses”.

As for Novartis, its pharma chief Joe Jimenez said that “through our existing collaborations, we have a high regard for the Nektar team and for their technologies, and these capabilities will play an important role in developing our respiratory pipeline”. The latter is being led by QAB149 (indacaterol), a once-daily long-acting beta-agonist with 24-hour bronchodilation with a fast onset of action.

QAB149 is on track for first regulatory submissions by the end of 2008 as a monotherapy treatment for chronic obstructive pulmonary disease. It is also being developed for use in COPD patients with other respiratory therapies, including with the corticosteroid mometasone (QMF149) and with the anti-muscarinic antagonist NVA237 (QVA149).

The acquisition will not have a significant impact on Novartis’ earnings and is expected to close by the end of the year.