Nektar Therapeutics (NKTR)

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Inhaling medicine removes the sting
AFTER 20 YEARS, IDEA COMES TO FRUITION
By Steve Johnson, Mercury News
Posted on Sun, Feb. 19, 2006

John Patton has been trying for 20 years to get others to believe in his idea that people with various ailments could inhale medicine into their lungs instead of having to endure painful injections.

And for years critics called his concept unworkable or unsafe.

But last month, the 59-year-old Patton finally won vindication. The U.S. Food and Drug Administration and European authorities both gave their approval to begin selling the inhalable form of insulin he helped invent, called Exubera.

Analysts have predicted sales of the product -- co-developed by Nektar Therapeutics of San Carlos, the company he founded, and drug giant Pfizer -- eventually could hit $3 billion a year. That would be a major plus for Patton, who co-founded the company in 1990, when it was called Inhale Therapeutic Systems. He went through much of his savings trying to get the business off the ground, and it hasn't been profitable since it went public in 1994.

Patton spoke with the Mercury News about some of the hurdles he overcame in getting Exubera approved. Here are edited excerpts from his remarks.

Q Why did Genentech hire you in 1985?

A They made these proteins that had to be injected and they said, ``Can you help us get around the needle?' My background was in gastrointestinal absorption and digestion. My Ph.D thesis was fat digestion in fish, which I don't even think my committee members read, it was so obscure.

Q But Genentech wasn't interested in pursing your research?

A In fairness to Genentech, they let me work on it for four years. And I think, all totaled, I probably spent about $4 million on it. There were a lot of people there at Genentech who were very enthusiastic about the program, and there were a lot who weren't, and mostly it was fear of long-term safety. I just, like, threw up my hands.

Q After Genentech turned you down, you and Robert Platz at SRI International in Menlo Park decided to form your own company to pursue the research. Was that a difficult time financially?

A I sold all my Genentech stock. It was worth about $200,000, and after taxes it was $120,000. I then used that money to live on -- and to start the company -- for the next 13 months and wound up using it all up.

Q You tried to get financing from various venture capital firms and finally got it from Onset Ventures of Menlo Park. What was that process like?

A You know, Bob and I were not well known. We were kind of damned by faint praise. We had no business experience. They kept telling us our business plan was not a business plan. And it was like, you know, speaking a foreign language to those guys. But we shopped the plan very frugally. We'd give it to one, take their input and try to change it and we'd give it to another. We were really getting jerked around, because each one wanted us to be a different kind of company.

Q Was that a pretty scary time for you?

A I'm very frightened of certain things. I'm terribly frightened of getting cancer. I'm afraid of people who want to kill me and stuff like that. But I've never been afraid of not having money. I did not go into this business for money. As a matter of fact, I've kind of avoided it. I wanted to do something for people. And I've never been motivated by money. For some people, some things are really scary and for other people they're very exhilarating. Toward the end, when nobody was funding us, I was looking at a job as director of this marine biotechnology center back in the harbor in Baltimore. There were some other contingencies.

Q What was the biggest hurdle you had to overcome in convincing people that inhaled insulin could be a viable product?

A Safety. The knee-jerk reaction from the lay scientists or the lay smart person was, ``You can't do that. You'll get asthma. It won't be safe. The lungs are supposed to breathe fresh air, you shouldn't put anything in there.' Actually, the lungs take in literally billions of particles everyday. There's all these processing mechanisms and self-cleansing mechanisms. And we're talking about putting something in there that's very bio-compatible.

Q You're already working on an updated version of Exubera. What do you envision for Nektar in coming years?

A We've never, ever sought or wanted to be taken over by anybody. That has never been our goal. We want to be a very, very innovative drug delivery company, and we want to bring the latest technology. I'd like to see us, through innovative biology, become a dominant player as our own pharmaceutical company.

Q Can you describe the work atmosphere at Nektar?

A We don't tend to single out employees and hold them up above the other ones. We just haven't had that culture. Whether we keep it or not, I don't know. But it's always so subtle, who invented this and what role did so-and-so play in that. So we don't celebrate inventors or anything like that. Sure, they can be compensated in a very quiet way. But we don't tend to call out individuals. It's a little controversial. Some people think we should.

Q You work in a cubicle and have been described by some co-workers as a humble person. How did you get that way?

A Well, I'm a total believer in your DNA. Your behavior is so fixed. I love it. We get into these reviews of the employees and people always say this person needs to be more aggressive or this person needs to take a stand or be more outgoing or not leave so many dead bodies around. And I'm, like, you know what, that's the way Joe is. We've been telling him that for 15 years.

http://www.mercurynews.com/mld/mercurynews/13911329.htm