Replies to post #31 on Nektar Therapeutics (NKTR)

[SeriousMoney]

We're on the same page on NKTR.

AMLN, another diabetes play, appears to be showing the way. [#msg-0181512]

[SeriousMoney]

NEKTAR (NKTR): An interesting note about short positions from WR Hambrecht's research team that believes up to 17 million shares of Nektar held short may have to be covered (i.e., bought) before too long. Why? At the end of June the Russell 2000 index of small- and mid-cap stocks gets re-balanced. Hambrecht believes that at that time the four largest biotech firms will be removed from the index because they have grown too large, including Buy List companies Alkermes and Amylin.

The overall weighting for biotechs within the index needs to remain close to the same level and NKTR would be the only remaining biotech stock in the Russell 2000. Many, many hedge funds and mutual funds buy the stocks in the Russell 2000 as a basket, so if the weighting of Nektar goes up, the number of shares of Nektar that need to be bought to mirror the Russell 2000, goes up. If the weighting of NKTR goes up to equal Amylin's current weighting, Hambrecht believes the stock could hit $50. The "shorts" know this, so a short squeeze may start sooner rather than later.

BIOTECH ChangeWave 3/30/06
http://ww2.changewave.com/bt_login.html?dest=/biotech/

[SeriousMoney]

Bad link... try this one for AMLN [#msg-10433899]

[SeriousMoney]

Pfizer/Nektar: Exubera to enjoy strong mid-term growth
Pharmaceutical Business Review
By Staff Writer, 18th April 2006

Pfizer's Exubera is expected to experience strong sales growth from 2007 to 2009.

Pfizer and Nektar Therapeutics' Exubera looks set to experience strong mid-term growth in type 1 and type 2 diabetes, driven by patient interest and physician acceptance of efficacy and safety data. By 2010, global sales of the drug are expected to reach $2 billion. However, Wall Street expectations of strong first year sales may be disappointed due to pricing and reimbursement difficulties.

Pfizer and Nektar's Exubera garnered US and EU approvals in January and is expected to launch in both markets by mid-2006. It appears that patient demand for Exubera in both type 1 and type 2 diabetes is high, and physicians are willing and ready to prescribe the product promptly following its launch.

Use of Exubera is, therefore, likely to grow steadily. However, premium pricing and poor reimbursement could well dampen the drug's potential, especially in the initial years post-launch.

Exubera's clinical advantages over injected insulin do not appear to extend beyond patient convenience - a feature not traditionally highly valued by third-party payors. This means that, with a cost expected to be three or four times higher than injected insulin, Exubera's reimbursement is likely to be poor or non-existent among managed care plans. Consequently, Datamonitor estimates that only 60% of Exubera candidates are likely to have adequate financial coverage for the product in 2006.

With this in mind, while Exubera is forecast to generate global sales of $1.7 billion in 2008 and $2 billion in 2010, H2 2006 sales are only estimated to reach around $186 million. Wall Street consensus puts the H2 2006 figure at $257 million; this seems overly aggressive considering the likelihood of strong pushback from third-party payers following the product's launch.

In addition, Exubera looks set to face stiff additional competition from 2009 onwards. Three late-stage inhaled insulin products are currently in development - Eli Lilly/Alkermes' AIR insulin, Mannkind's Technosphere Insulin (TI) and Novo Nordisk's AERx. Approvals for AIR and TI are anticipated in mid-2009, while AERx is expected to gain approval mid-2010.

Interviewed opinion leaders believe the efficacy of all products is comparable. However, due to their smaller, more convenient devices, AIR Insulin and TI are expected to rapidly inherit Exubera's share, with sales for each new product likely to reach over $1.5 billion in 2010. Conversely, AERx is expected to lag behind due to a late launch, bulkier device and the need for refrigeration, generating peak sales of $1.3 billion in 2012.

http://www.pharmaceutical-business-review.com/article_feature.asp?guid=C1ADE381-E877-472E-9F82-37A63...