San Francisco Business Times by Ron Leuty, Reporter
Nektar Therapeutics Inc. could help its bottom line — and move closer toward paying off debt — by doing almost nothing Monday and Tuesday.
San Francisco-based Nektar (NASDAQ: NKTR) is in line for royalty payments if the Food and Drug Administration on Monday approves an acute migraine drug from MAP Pharmaceuticals Inc. (NASDAQ: MAP) and partner Allergan Inc. It would collect more royalties if an anemia drug from Affymax Inc. (NASDAQ: AFFY) and Takeda Pharmaceutical Co. Ltd. is approved Tuesday.
Both drugs use know-how developed by and licensed from Nektar.
Signed within months of each other eight years ago, the licensing deals are typical of the pacts made between drug developers: Company A with a technology meets Company B with a drug, they decide there’s a match and they consummate the relationship, legally speaking.
Often in these long-term affairs, however, one or both partners die along the way and the booty is captured by one of their descendants. But the MAP and Affymax deals with Nektar have the potential to write rare happy endings, with three Bay Area companies and with the drug approvals coming a day apart.
Analysts peg peak sales of Levadex from Mountain View-based MAP at $400 million to $500 million. Peginesatide from Palo Alto-based Affymax could garner revenue in the neighborhood of $350 million to $550 million.
In the end, that could translate into a good deal of coin for Nektar. Its royalties for Levadex and peginesatide are believed to be in the mid-single digits. (Nektar must share an undisclosed portion of the Affymax royalties with Enzon Pharmaceuticals Inc.)
For the sake of comparison, Nektar received low single-digit royalties on Roche’s anemia drug Mircera and UCB’s Crohn’s disease and rheumatoid arthritis drug Cimzia. After sharing some of the Cimzia royalty with Enzon as well, those drugs brought Nektar $8.3 million in royalty revenue last year.
Here’s the rub: Nektar last month sold the potential royalty revenue from Mircera and Cimzia to a unit of Royalty Pharma for $124 million. Nektar said it would use the Royalty Pharma bounty to pay down a convertible note that is due in September — and it said it was mulling the sale of other royalty interests as well.
