Nektar Therapeutics and The Straumann Group Announce License, Manufacturing and Supply Agreement for Dental Applications.

Business Editors/Health & Medical Writers

SAN CARLOS, Calif. & WALDENBURG, Switzerland--(BUSINESS WIRE)--Jan. 23, 2003--Nektar Therapeutics (Nasdaq:NKTR), formerly Inhale Therapeutic Systems, Inc., and The Straumann Group (SWX:STMN), a leader in implant dentistry, announced today an agreement to license, manufacture and supply Nektar's PEG-based hydrogel technology for dental regeneration products.

Through the development of a PEG-based hydrogel product, which will be used by dentists to support the tissue regeneration involved in dental surgery, Straumann is working to offer a simple-to-use and effective product in this field. First products are expected to be introduced to market by 2004.

Under the agreement, Straumann will license and source Nektar's PEG-based hydrogel technology and material exclusively for a proprietary formulation. Nektar will receive milestone and manufacturing payments as well as royalties on successfully commercialized products.

"We consider Nektar to be the premier manufacturer and supplier of PEG hydrogel technology, and Nektar's important expertise and experience will allow us to stay at the forefront of innovation in the field of implant dentistry," said Gilbert Achermann, CEO of The Straumann Group. "This agreement is an important step in bringing to market a novel product for dental tissue regeneration -- an effort we started with our acquisition of Kuros Therapeutics last year."

"We are pleased to be working with Straumann, who, with more than 20 percent market share of the dental implant product market, is one of the two largest producers," said Ajit Gill, president and chief executive officer of Nektar. "This innovative product will offer Straumann the continued ability to confirm and build its position in the $800 million dental implant market, which is growing at 10-15% annually."

Nektar's proprietary advanced PEGylation chemistry is a molecule engineering technology for the chemical attachment of polyethylene glycol (PEG) chains to a broad range of drug substances such as peptides and proteins including antibody fragments; small molecules; and other drugs. Nektar hydrogels are cross-linked PEG molecules that can serve as biomaterials or as depots to prolong drug release from an injection site. Ultimately, Nektar hydrogels may reduce the frequency of dosing and improve patient compliance. Nektar hydrogels are used in Confluent Surgical's SprayGel(TM) product for prevention of surgical adhesions, approved in Europe and in pivotal testing in the United States.

The Straumann Group, with headquarters in Waldenburg, Switzerland, is a leader in the field of implant dentistry. Straumann develops, produces and markets products worldwide for oral implantology (ITI(R) DENTAL IMPLANT SYSTEM, instruments) in cooperation with the International Team for Oral Implantology (ITI), leading hospitals, research institutes and universities. Through the acquisition of Kuros Therapeutics, which had proprietary technology in biomaterials for soft and hard tissue regeneration, Straumann gained the necessary competency to develop tissue regeneration products for the dental market. Straumann products are all manufactured in Switzerland. The company is represented by subsidiaries in 14 countries worldwide, and by distributors in 27 countries. Additional information about the company is available on the company's website at http://www.straumann.com.

Nektar Therapeutics, formerly Inhale Therapeutic Systems, Inc., enables the development of high-value, differentiated pharmaceutical products based on its leading drug delivery capabilities. Nektar's expanded technology and development expertise allows it to develop and offer to partners new product opportunities, solve more development challenges, and realize the full potential of therapeutics from new molecular entities to life-cycle management products. For additional information, please see http://www.nektar.com.

This release contains forward-looking statements that reflect the current views of Nektar management as to future products, product development, and other future events and operations. These forward-looking statements involve uncertainties and other risks that are detailed in reports and other filings with the Securities and Exchange Commission, including the Form 10-K for 2001 and Form 10-Q for the first quarter 2002. These documents identify important factors that could cause the company's actual performance to differ from current expectations, including the outcome of clinical trials, regulatory review, manufacturing capabilities and marketing effectiveness.