June 14, 2006
Nektar Therapeutics
Mixed Feedback on Exubera
at ADA
Morgan Stanley
Quick Comment: Feedback from the ADA on Exubera
was mixed. While the Exubera booth was indeed
buzzing with interest throughout the convention, most
of the physicians we polled informally voiced lingering
concerns about long-term safety and reimbursement
issues. While PFE showed encouraging 2 year safety
and efficacy studies, many physicians felt that 2 years
was not enough data to feel comfortable. Moreover,
conversations with PFE reps reinforced our expectation
that the launch will be tempered by the large amount of
education required with the initial focus targeting
endocrinologists, followed later by the GP community.
While the official launch is slated for July 17th, we do
not expect to see any meaningful uptick in sales until
September. Longer term, we worry that Exubera has a
relatively short window (a little over 3 years) before the
next generation of sleeker devices, which are in Phase
3 development, including ALKS/LLY’s Air Insulin and
MNKD’s Technoshere Insulin, reach the market. While
NKTR is working on its own improved device, TI is the
device to watch given its potential to change the
landscape, and appears to be the only device with
strong endorsement from the key opinion leaders.
Thesis intact: We reiterate our Underweight on NKTR
shares. While we fully recognize that there may be
tremendous patient interest because of the appeal of
the concept, we still see significant obstacles that will
likely temper usage, at least initially. These include (1)
a tough reimbursement environment which means that
patients may not be so excited presuming they have to
pay out of pocket or pay a high co-pay; (2) lingering
concerns about lung safety; and (3) PFE’s commitment
to a tempered introduction. If the launch disappoints,
peak sales forecasts are likely to reduced, creating a
more attractive entry point, in our view. |
