Nektar, Bayer sign inhaled antibiotic agreement

BOSTON, Aug 6 (Reuters) - Nektar Therapeutics Inc.(NKTR.O), whose inhaled insulin drug Exubera has failed so far to capture much interest, said on Monday it has signed an agreement with German drugmaker Bayer AG (BAYG.DE) to jointly develop an inhaled antibiotic.

Bayer will pay $50 million up front, and then as much as $125 million more to Nektar as the companies meet milestones in the clinical and regulatory process. If the product were approved, Bayer and Nektar would co-promote the drug in the United States and share the profit.

Outside the U.S., Nektar would receive tiered performance royalties up to a maximum of 30 percent.

Nektar's product, NKTR-061, is in mid-stage clinical trials to treat serious, hospital-acquired pneumonia. Gram-negative pneumonias are often seen in patients whose immune systems have been depressed, in the elderly and patients undergoing major surgery.

(Reporting by Toni Clarke)

((Editing by Gerald E. McCormick; Reuters Messaging, toni.clarke.reuters.com@reuters.net, 617-367-4165)) Keywords: NEKTAR/

(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nWNAS0113