Bayer will be coming in on Nektar's existing inhalable antibiotic programme, collaborating on NKTR-061 - an inhalable formulation of amikacin, an aminoglycoside antibiotic currently only administered through intravenous injection. The inhaled antibiotic is under development for the adjunctive treatment of acute gram-negative pneumonias in patients on and off mechanical ventilation. The inhalable formulation has been developed using Nektar's proprietary pulmonary drug delivery system, which is designed to provide aerosolised drugs to patients with high levels of deposition directly to the lung. The system makes use of Nektar's aerosol generator technology, which can be programmed with a pre-set particle size for each specific drug and individual therapeutic application. The generator can be placed in-line with a ventilator circuit, and powered by a software driven controller to produce aerosol during the appropriate portion of a patient's breathing pattern. According to the company's data, delivery of the antibiotic via inhalation could require significantly lower doses of the drug than currently used in intravenous delivery, as the treatment is delivered directly to the site of infection. This also carries this associated advantage of potentially avoiding the development of antibiotic resistance, a common problem in this particular patient population. An inhalable version of amikacin could also do away unpleasant side effects that crop up as a result of treatment with high doses of intravenous antibiotics, such as kidney problems and hearing damage. Following the link up between Bayer and Nektar, the latter will receive up to $175m (€126.7m) associated with the successful development and commercialisation of the compound, which includes an upfront payment of $50m. Once development and regulatory filings have been successfully completed, the two companies have agreed to co-promote the product and share profits from the US market, with sales outside the US gaining Nektar tiered performance royalties up to a maximum of 30 per cent. Bayer will be responsible for global clinical development, regulatory strategy, marketing and manufacturing of the product, though where the product will eventually be produced is still "under discussion internally," according to a Bayer spokesperson. The inhaled amikacin product is currently being evaluated in late stage Phase II trials as an adjunctive therapy in ventilated patients with hospital-acquired, gram-negative pneumonias. Gram-negative bacilli account for over 60 per cent of all hospital-acquired pneumonia cases according to Nektar, with a mortality rate reaching 25-50 per cent. Pivotal Phase III studies are expected to start in 2008, based in locations both in and outside the US. According to a Bayer spokesperson, the companies estimate the Phase III studies to complete in 2010, with subsequent launch depending on local regulatory authorities and approval timelines. This is the second inhalable drug collaboration between Bayer and Nektar, the first being a 2005 project on inhaled ciprofloxacin as a potential dry powder therapy for the treatment of pseudomonal infections in cystic fibrosis patients. The project received orphan drug status from the European Medicines Agency (EMEA) last month.