PHARMACEUTICAL giant Novartis AG said yesterday it will buy the pulmonary drug unit of California-based Nektar Therapeutics for US$115 million.
The transaction is expected to be completed by the end of 2008, pending regulatory approval, Novartis said.
San Carlos-based Nektar develops drug products and candidates using its own drug delivery technologies, including PEGylation technology, a chemical process aimed at improving the performance of drugs, such as by making them more soluble or reducing immune responses to them. The company's pulmonary technology makes drugs inhalable to deliver them through the lungs.
Nektar's drugs in the pipeline include an aminoglycoside antibiotic against pneumonia, a PEGylated form of irinotecan against tumors and an oral drug to treat bowel dysfunction.
Novartis said it will use Nektar's expertise to accelerate its pipeline for drugs against chronic obstructive pulmonary disease, asthma, cystic fibrosis and other illnesses.
The acquisition excludes Nektar's inhalation programs for insulin and antibiotics vancomycin, ciprofloxacin and amikacin, Novartis said.
Around 140 Nektar employees will join Novartis but stay in San Carlos.
Nektar President and CEO Howard W. Robin said: "This agreement will allow us to focus our efforts on the development of novel therapeutics using our PEGylation and conjugate chemistry-based drug development platforms.
"The transaction also strengthens our balance sheet and significantly reduces expenses," Robin said.
Shares in Novartis rose 1 percent yesterday at 59.95 Swiss francs (US$52.60) on the Zurich exchange.