Pfizer may turn off partners with Exubera exit

NEW YORK (Reuters) - Pfizer Inc's (PFE.N) handling of its decision to dump its poorly selling inhaled insulin could taint its allure as a marketing partner.

Rivals could get a leg up on Pfizer in gaining favor with biotech companies, which are constantly being courted by big drug makers for rights to sell prospective medicines.

After the world's No. 1 drug maker announced on Thursday it would exit Exubera, its partner, Nektar Therapeutics (NKTR.O), said it only learned of Pfizer's decision from Pfizer's press release.

Nektar issued a scathing statement, saying it was "very disappointed" in Pfizer's marketing of the drug.

Morgan Stanley analyst Jami Rubin said in a research note she was surprised at how Pfizer delivered the news to Nektar: "Such tactics can't be good for your 'partner of choice' reputation."

Pfizer said on Thursday it withheld the news from Nektar until it put out its press release because it was material financial information related to Pfizer's quarterly earnings.

But Natixis Bleichroeder analyst Jon LeCroy said, "If it's your partner, it's financially material to both. I just find that an odd explanation of how you could leave your partner out of the loop like that."

A dent to Pfizer's reputation would come at a particularly bad time, as it tries to replace revenue from medicines that have lost or will lose patent protection.

Chief Executive Jeff Kindler has recently completed his first year at Pfizer's helm, and the drug maker has recently named a new research and development chief.

LeCroy noted that Pfizer also abandoned its sleep-drug partnership with Neurocrine Biosciences (NBIX.O) in June 2006 after U.S. regulators rejected a form of the drug.

Shares of Neurocrine hit their lowest level in nearly seven years after Pfizer dropped the partnership on the drug, indiplon.

"If you're a small biotech and you've seen how they've treated their tiny partners, I would argue that, yeah, you probably wouldn't want to partner with Pfizer right now, and that's not what they need with the weakness in their pipeline," LeCroy said.

Despite these setbacks, Pfizer still can boast of many sales representatives to put behind a product and extensive capital for consumer advertising that makes them attractive, Edward Jones analyst Linda Bannister said.

"I think there are a lot of companies that have products in development who would be willing to strike a deal with Pfizer because they know Pfizer has a lot of marketing muscle," Bannister said.

Pfizer is eager to stockpile potential products before Lipitor, its mammoth-selling cholesterol drug, loses U.S. patent protection in the coming years.

The situation became more dire late last year, when the company halted the development of another promising cholesterol treatment because of safety reasons.

"Their pipeline right now isn't that strong internally," said LeCroy, who rates Pfizer shares as "hold."

"In general, things are looking very bleak for them so they really need to in-license more things," LeCroy said.

(Editing by Brian Moss)