In a move described as more about better management than crisis management, Nektar Therapeutics has shuffled top level staff and cut its work force by 25 percent as part of a restructuring expected to cut $65 million in annual spending.

The San Carlos, Calif.-based company chopped $21 million from general and administrative costs, $23 million from non-cost-of-goods operations, $16 million from research and development and $5 million from capital spending. The company said it anticipates that the changes will bring about an annual spending reduction of about $27 million in 2007.

In addition, Hoyoung Huh has been promoted to chief operating officer and head of the PEGylation Business Unit. Recently, Nevan Elam was promoted to head the company's other business unit, focusing on pulmonary activities. Also, Michael Simms was promoted to senior vice president of operations, replacing Truc Le, who is leaving the company. The company also announced that current CFO Louis Drapeau is retiring and will leave the company in the coming months.

During a conference call, CEO and President Howard W. Robin said that the outlook is still bright for the company and that the changes are simply intended to improve management and enhance shareholder value. "These cutbacks are not a function of doing less. They are a function of managing the company better," he noted.

Company officials said they will continue pushing the existing pipeline, and will complete a pivotal Phase IIb clinical trial of NKTR-061 (inhaled amikacin) to treat hospital-acquired Gram-negative pneumonia by the end of this year. Additionally, Nektar plans to initiate Phase II clinical trials by the end of the year in its two leading PEGylated small molecule programs, NKTR-102 (PEGylated-irinotecan) for solid tumors and NKTR-118 (PEGylated-naloxol) for opioid-induced constipation.

During the conference call analysts grilled Robin about whether the restructuring was related to sales force cutbacks earlier this year by Pfizer Inc., of New York, which developed the inhaled insulin Exubera with Nektar. Robin denied that was a factor in the cutbacks, and said he is "absolutely" certain that Pfizer's new plans for marketing the drug will solve any problems.

The company reported cash, cash equivalents and short and long-term investments of $398 million as of March 31. On Thursday Nektar shares (NASDAQ:NKTR) lost 48 cents to close at $11.31.