more comments
NKTR;
EPS (Dec): 2003A -$1.34; 2004E -$0.97; 2005E -$0.77
GAAP EPS (Dec): 2003A -$1.18; 2004E -$1.30; 2005E -$0.87
$20.61; C-1-9
12-Month Price Objective: $28.00 (10-Mar-2004)
Event
The 2004 American Diabetes Association (ADA) meeting is currently ongoing.
Analysis
We had previously summarized the key posters relating to Exubera (see report of May 20 for
details). Selected data included A) small changes in FEV1 and DLCO (measures of lung
function) seen with Exubera that stabilized by one year and were similar to the comparator
arm (abstract 454-P: Barnett et. al.); B) Similarly nominal changes in measures of lung
function with Exubera after four years (abstract 486-P: Skyler et. al.); C) No clinical impact
on efficacy from elevated anti-insulin antibodies seen after Exubera (abstract 463-P: Heise
et. al.: Also echoed in the abstract by Barnett et. al.).
Incremental information that we were able to glean included the following:
A) Parameters of efficacy (e.g., post-prandial glucose levels, glucose infusion rates, HbA1c
levels) and safety (e.g., hypoglycemia events) did not show any correlation to anti-insulin
antibody levels after Exubera.
Both Barnett et. al., and Heise et. al., categorized their patients into four groups based on
antibody levels (low to high). Similar efficacy was seen in all four groups, further
supporting the notion that efficacy was unaffected by antibody levels. Distribution of
patients in the antibody groups (low to high) seen after 24 weeks did not change
materially after 52 weeks.
B) Investigators that we spoke to indicated that European regulatory agencies required a
one-year safety study, while the FDA required a two-year study, explaining the earlier
filing in Europe in March 2004. Many of the investigators also indicated that they were
not expecting Exubera to elicit any unforeseen side effects in the two-year study,
compared to the data presented at six months and one year. We have heard conflicting
reports regarding the two-year study. Some indicated that the two-year study was either
complete or was approaching completion. Another believed that the studies were still
ongoing.
C) Investigators that we spoke to were quite comfortable with the ease of use and reliability
of the device.
Overall, the data suggest a favourable safety/efficacy profile for Exubera. We remain
comfortable regarding the timing for an NDA filing in H2/04.
Nektar Therapeutics – 7 June 2004
Refer to important disclosures on pages 2 to 3. 2
Recommendation
Our "Buy" rating remain unchanged. Our 12-month price
objective of $28.00 is based on forecast global Exubera
sales of $1.8 billion in 2009 (estimated to be the fourth full
year of sales), EPS 2009E of $1.95, 20% discount rate and
a 30x multiple (consistent with the average of a group of
profitable biotechnology companies). Risk factors include
further delays to Exubera that could result in reduced cash
reserves, delays in clinical and regulatory progress for
other proprietary and partnered products.
Analyst Certification
I, Hari Sambasivam, hereby certify that the views
expressed in this research report accurately reflect my
personal views about the subject securities and issuers. I
also certify that no part of my compensation was, is, or
will be, directly or indirectly, related to the specific
recommendations or view expressed in this research
report. |
