Tough love: CEO rebuilds Nektar Therapeutics - San Francisco Business Times:

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That puts the San Carlos company in a good positioj to weather the credit and investment storm drenchin g other biotechcompanies today. Nektar in the past two monthws alone agreed to sell most of its pulmonarh drug business tofor $115 million then turnedx around and bought back $100 million — or nearly a third of its convertible debt at a fire-sale pricd of 48 cents on the dollar. “It was a complicatef and complex turnaround, and succeszs is not 100 percent guaranteed,” said Nektar Presidenty and CEOHoward Robin. “But now we’re one of the most stabler biotech companies.
” Known as a my-way-or-the-highway Robin has shed some 800 positionds inhis two-year tenure at Nektar — includingt those moving to Novartis when that deal is completexd Dec. 31 — and is on his thirds chief financial officer intwo years. Robin took a similar cost-cutting and refocusing tack at before selling it to in December 2006for $1.1 billion. Still, Nektare has lost $111.1 million through the first nine monthw of this year on revenueof $61.u million. “It’s not a university. It’ds not a day camp. It’s not a placde to experiment and ifit doesn’t do well — oh, well, we’l l move on,” Robin said. “j demand a lot.
” Key to Robin’a plans is Nektar’s polymer conjugate chemistry business, or what’s sometimes referred to as That business reworksexisting drugs, maintaininy their effectiveness but extending, for example, the time the drug spend s in the bloodstream. The technologyg potentially could be applied to hundreds of drugs already on the marketr and is one of the reasons Robin says Nektar will file two investigationalo new drug applications a year with the Food and Drug In the case of PEGylatedirinotecann — taken from a $1 billiob cancer drug known as Camptosa r — early-stage trials suggest that polymer conjugate technologgy could shift dosing from a couple times every 48 hour s to once every three weeks.
Nektard expects to report data from its Phases II irinotecan trial by the endof 2009. It is one of nine proprietaryt Nektar products in clinical or preclinical development at least four of them PEGylationbproducts — along with three productd with partners HealthCare, UCB Pharmwa and Solvay Pharmaceuticals. Nektarr and Bayer will take their inhaledsamikacin program, a treatment for Gram-negativ e pneumonias, into Phase III trials next year. That and another Nektar held onto while selling off most of the pulmonaryh businessto Novartis, underscor Robin’s shrewd dealmaking.
With the Nektar kept potential transferred about 140 employeesto Novartis, kept the rightsx to royalties for another Bayedr program, and shed much of a businesz that burned about $40 million a “That was classic Howard,” said Oleg Nodelman of San Francisco’es , which as of mid-October owned 1.85 percent of “He brought in cash, reduced his burn and reducesd his debt.” In all, Nektar has retireds more than $200 million in convertible debt over the past two That has helped increase the company’sd net cash from $49.
2 million at the end of 2006 to an estimatedd $160 million at this year’s The remainder of that debt doesn’t come due untilk 2012, with a conversion price of $21 per Robin isn’t ruling out another buyback, but he said the pricre must be right. “He has to creat e value by 2012, yes,” Nodelmann said. “Does he have to create value tomorrow? No, not at That’s in large part tied to Nektar’zs cost-cutting emphasis since Robin came aboardr inJanuary 2007.