NKTR:
Estimate Change; Exubera Approved; Silver Lining With a Cloud
Exubera approved with lung function recommendation
On Friday, the FDA approved Pfizer (PFE)/NKTR’s Exubera for diabetes. The
indications (combination with long acting insulin for type 1; monotherapy,
combination with oral agents/long acting insulin for type 2) are consistent with our
expectations. On a cumbersome note, the label recommends lung function tests at
the start of therapy and every 6-12 months thereafter. Discussions with primary
care physicians (PCPs) suggests that spirometers are easy to learn and use, but are
not commonly found in primary care settings. Hence, Exubera’s launch could be
tempered as PFE embarks on the education of PCPs on the use of spirometers.
Exubera estimates revised lower
Despite the positive outcome, NKTR stock could pull back following the exit of
momentum investors, and as others assess the impact of lung function tests. Our
Exubera estimates have been lowered due to this issue, and the staggered launches
resulting from reimbursement outcomes. Our end-user sales estimates have been
revised to $1 bn from $1.2 bn in 2009 (Please see Table 1). We remain positive on
NKTR based on pending royalties from Exubera, especially in the event of a pull
back.
BUY rating unchanged
Key milestones in 2006 include details of Exubera pricing, details regarding
marketing and pre-launch activities at PFE’s investor day (February 10), progress
on reimbursement, and data disclosure at major medical conferences.
Hari Sambasivam >> |
