Pfizer pfudges with its withdrawal of Exubera

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Pfizer and Nektar have buried the hatchet after the former paid the latter $135 million following its abrupt decision to discontinue marketing of Exubera, on which the two firms partnered. But Pfizer's handling of the matter could do lasting damage to the company's reputation—particularly among its prospective partners.

Pfizer CEO Jeff Kindler notified the public of his decision to cease marketing the inhalable diabetes drug due to poor earnings during a third quarter earnings call. Trouble is, Pfizer didn't bother to clue in Nektar Therapeutics on the decision in advance.

“We first learned…of Pfizer's decision to walk away from Exubera from their press release,” said Howard Robin, Nektar president and CEO, in a statement.

Pfizer cited SEC rules in explaining why it didn't notify the company. Some analysts still criticized Pfizer's conduct.

“We were taken aback by the manner in which [Pfizer] management handled the situation,” Morgan Stanley analyst Jami Rubin wrote in a research note.

WR Hambrecht's Andrew Forman called Nektar's pact with Pfizer “a bad marriage with all the baggage of disappointing expectations.”

Pfizer acknowledged that it “underestimated” all the barriers to getting patients started on insulin in an inhalable form, not just the size of the device.

Now Nektar is left with a 100% stake in a drug Pfizer couldn't sell, Forman wrote. Pfizer, some analysts noted, is set to lose $8 billion on Lipitor as early as 2010 and needs to replace that largely by striking in-licensing deals.

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