Pursuant to the agreement and upon closing of the transaction, which is expected to occur on or about December 31, 2008, Nektar will transfer to Novartis assets which include certain dry powder and liquid pulmonary formulation, device and manufacturing assets, including capital equ ipment and manufacturing facility lease obligations; certain intellectual property and manufacturing methods and associated information systems related to the pulmonary business; manufacturing and associated payments for Ciprofloxacin inhaled powder, and manufacturing and royalty rights to the Tobramycin inhalation powder program and certain other interests in two private companies. In addition, Novartis is expected to hire approximately 140 Nektar pulmonary personnel or approximately 28% percent of Nektar's regular full-time staff.

We currently estimate that we will incur a pre-tax restructuring charge in 2008 of approximately $3.0 to 3.5 million, of which approximately $1.5 million is related to one-time employee compensation costs and personnel transition costs, approximately $1.0 to $1.5 million is related to information technology transition costs, and approximately $500,000 is related to equipment and operating transition expenses, in each case to be incurred by Nektar in connection with asset sale transaction.   

Of the estimated $3.0 to $3.5 million pre-tax restructuring charge, $300,000 of such charge would result from a non-cash stock-based compensation charge and the remainder of the charge will result in future cash expenditures and will be incurred in connection with the closing of the transaction. Although we believe that our estimates are appropriate and reasonable based on available information, actual results could materially differ from these estimates.