Tough love: CEO rebuilds Nektar Therapeutics - San Francisco Business Times:

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That puts the San Carlos company in a good positio n to weather the credit and investment storm drenchin other biotechcompanies today. Nektar in the past two monthse alone agreed to sell most of its pulmonary drug businesds tofor $115 million then turned arounsd and bought back $100 milliojn — or nearly a third — of its convertible debt at a fire-sale pricer of 48 cents on the dollar. “Itr was a complicated and complex turnaround, and success is not 100 perceng guaranteed,” said Nektar President and CEOHowarxd Robin. “But now we’re one of the most stablw biotech companies.
” Known as a my-way-or-the-highway manager, Robihn has shed some 800 positions inhis two-yeatr tenure at Nektar — including thosre moving to Novartis when that deal is completedc Dec. 31 — and is on his third chiev financial officer intwo years. Robin took a simila cost-cutting and refocusing tack at befores selling it to in December 2006for $1.1 Still, Nektar has lost $111.q1 million through the firsgt nine months of this year on revenuse of $61.8 million. “It’s not a It’s not a day camp. It’es not a place to experiment and ifit doesn’tt do well — oh, well, we’ll move Robin said.
“I demand a Key to Robin’s plans is Nektar’s polymer conjugate chemistryg business, or what’s sometimes referred to as PEGylation. That businesse reworks existing drugs, maintaining their effectiveness but for example, the time the drug spendxs in the bloodstream. The technology potentially could be applie d to hundreds of drugs already on the markef and is one of the reasons Robin says Nektaer will file two investigational new drug applications a year with the Food and Drug In the case of PEGylated irinotecan taken froma $1 billio cancer drug known as Camptosar — early-stagde trials suggest that polymer conjugate technology could shift dosing from a couple timees every 48 hours to once every three Nektar expects to report data from its Phase II irinoteca n trial by the end of 2009.
It is one of nine proprietaryt Nektar products in clinical or preclinicaldevelopment — at least four of them PEGylationn products — along with three products with partners HealthCare, UCB Pharma and Solvay Nektar and Bayer will take their inhaled amikacin program, a treatment for Gram-negative pneumonias, into Phases III trials next year. That program, and another Nekta r held onto while selling off most of the pulmonarg businessto Novartis, underscore Robin’s shrewd dealmaking.
With the Nektar kept potential moneymakers, transferred about 140 employeezsto Novartis, kept the rights to royalties for anothert Bayer program, and shed much of a businessw that burned about $40 millionm a year. “That was classic Howard,” said Oleg Nodelman of San Francisco’s , which as of mid-October owned 1.85 perceny of Nektar. “He brought in cash, reducer his burn and reduced his debt.” In all, Nektatr has retired more than $200 milliojn in convertible debt over the pasttwo years. That has helpes increase the company’s net cash from $49.23 million at the end of 2006 to an estimated $160 million at this year’s close.
The remaindef of that debt doesn’t come due untill 2012, with a conversion pric e of $21 per share. Robin isn’t ruling out another but he said the price mustbe right. “He has to creates value by 2012, yes,” Nodelman said. “Does he have to create values tomorrow? No, not at all.” That’ss in large part tied to Nektar’s cost-cuttinh emphasis since Robin came aboard inJanuary 2007.