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Biotech / Medical : INHL - Inhale Therapeutics - Pulmonary Insulin! -- Ignore unavailable to you. Want to Upgrade?

To: deeno who wrote (209)	6/7/2004 2:05:36 PM
From: deeno	Read Replies (1) \| Respond to of 225

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.