AstraZeneca and Nektar Therapeutics enter worldwide license agreement for two drug development programmes

AstraZeneca and Nektar Therapeutics announced today that they have entered into an exclusive worldwide license agreement for two drug development programmes: NKTR-118, a late stage investigational product being evaluated for the treatment of opioid-induced constipation, and the NKTR-119 programme, an early stage programme that is intended to deliver products for the treatment of pain without constipation side effects. Both programmes were developed by Nektar, utilizing their proprietary small molecule advanced polymer conjugate technology platform.

Under the terms of the agreement, AstraZeneca will assume the responsibility for the continued development of both the NKTR-118 and NKTR-119 programmes, including the initiation of late-stage clinical studies for NKTR-118. AstraZeneca expects completion of the design of the phase III programme in the near term, and anticipates filing the drug with regulators in 2013. AstraZeneca will also be responsible for global manufacturing and marketing for both programmes. Under the agreement, Nektar will receive an upfront payment of $125 million for both NKTR-118 and NKTR-119.

NKTR-118 has completed a Phase 2 clinical trial and is being developed to treat constipation caused by the use of opioid pain products. Under the agreement, for NKTR-118, Nektar is eligible to receive up to $235 million in aggregate payments upon the achievement of certain regulatory milestones, as well as additional tiered sales milestone payments of up to $375 million if the product achieves considerable levels of commercial success. Nektar will also be eligible to receive significant double-digit royalty payments on net sales of NKTR-118 worldwide.

NKTR-119 is an early stage drug development programme that is intended to combine oral NKTR-118 with selected opioids, with the goal of treating pain without the side effect of constipation traditionally associated with opioid therapy. AstraZeneca will continue the development of this programme, including determining the appropriate opioid combinations with NKTR-118. For NKTR-119, Nektar would receive development milestone payments as well as tiered sales milestone payments. Nektar will also receive significant double-digit royalty payments on NKTR-119 net sales worldwide.

"NKTR-118 is an important late stage programme that has the potential to address a real need for patients," said David Brennan, Chief Executive Officer of AstraZeneca. "We are excited about this agreement with Nektar, as it provides us the opportunity to apply our deep knowledge and expertise in neuroscience, oncology and gastrointestinal areas of medicine to create real value for patients. This is a good example of using externalisation to enrich the company's late-stage pipeline."

"We are extremely pleased to enter into this exclusive global license agreement with AstraZeneca," said Howard W. Robin, President and Chief Executive Officer of Nektar Therapeutics. "AstraZeneca has a strong history of creating and establishing market-leading brands, which makes them the ideal development and commercial partner for our NKTR-118 and NKTR-119 programmes. In addition to the promise that these potential products provide to patients, this partnership validates Nektar's successful strategy to create novel oral small molecule drug candidates with our advanced polymer conjugate technology platform."

NKTR-118 is an investigational drug candidate that combines Nektar's advanced small molecule polymer conjugate technology platform with naloxol, a derivative of the opioid-antagonist drug, naloxone. Results from NKTR-118's Phase 2 clinical trial will be presented at an oral plenary session of the American College of Gastroenterology 2009 Annual Scientific Meeting in October.

The agreement is subject to review by the United States Government under the Hart-Scott Rodino Act and becomes effective after the expiration or earlier termination of the waiting period (or any extension thereof).