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

To: david nordic who wrote (220)	6/14/2006 9:29:42 AM
From: deeno	Respond to of 225

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.