The little biotech declared partial defeat this morning with plans to cut 25 percent of the workforce, or about 200 jobs, thanks to the failure of its Exubera inhaled insulin device that Pfizer has tried to peddle. And cfo Louis Drapeau is retiring.

The two companies once hoped the deivce would represent a revolution in treating diabetes. Instead, the product has become a symbol of marketing hubris - the device prompted doctors to worry about respiratory side effects and the public to notice its resemblance to a bong.

The cutbacks will cost the little biotech between $10 million and $12 milion in restructuring charges, although overall spending is in the process of being slashed by $65 million. There were nearly 800 employees as of last year, when accumulated deficits reached $1.1 billion.

“Nektar’s future is now more secure than ever,” says ceo Howie Robin. “We streamlined our management structure. We significantly reduced our spending rate. And we have three products with breakthrough potential from our proprietary pipeline now squarely at the center of our commercial strategy.”

Robin, by the way, subscribes to the ‘bong is half full’ theory. Earlier this month, he told Wall Street analysts that Nektar’s next insulin inhaler will be smaller than others being developed by rivals, such as Alkermes and MannKind. And Pfizer is interested in the product; the two companies have an exclusive development.

Nonetheless, Exubera still accounts for most of Nektar sales. In an investor note this afternoon, Jim Reddoch of Friedman Billings Ramsey, writes: “The pipeline is still early, and even with these cost-cutting measures, the valuation (of the stock price) remains dependent on Exubera being a relative success.”

By the way, Nektar didn’t mention any job cuts in its press release. That info was disclosed only in a Securities and Exchange Commission filing today. No company likes to be seen as an evil employer who pushes workers out the door, but transparency is important. Now Robin will leave everyone wondering what else won’t be said publicly about future moves.

Nektar’s SEC filing;
Nektar’s press release.[tags]Exubera, Nektar, Pfizer[/tags]