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<ACCESSION-NUMBER>0001193125-05-168516
<TYPE>425
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<FILING-DATE>20050815
<DATE-OF-FILING-DATE-CHANGE>20050815
<SUBJECT-COMPANY>
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<CONFORMED-NAME>AEROGEN INC
<CIK>0001039160
<ASSIGNED-SIC>3841
<IRS-NUMBER>330488580
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
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<ACT>34
<FILE-NUMBER>000-31913
<FILM-NUMBER>051026495
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2071 STIERLIN COURT
<CITY>MOUNTAIN VIEW
<STATE>CA
<ZIP>94043
<PHONE>650 864-7300
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<STREET1>2071 STIERLIN COURT
<CITY>MOUNTAIN VIEW
<STATE>CA
<ZIP>94043
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<CONFORMED-NAME>NEKTAR THERAPEUTICS
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<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
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<BUSINESS-ADDRESS>
<STREET1>150 INDUSTRIAL RD
<CITY>SAN CARLOS
<STATE>CA
<ZIP>94070
<PHONE>6506313100
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>150 INDUSTRIAL ROAD
<CITY>SAN CARLOS
<STATE>CA
<ZIP>94070
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<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>INHALE THERAPEUTIC SYSTEMS INC
<DATE-CHANGED>19980723
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<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>INHALE THERAPEUTIC SYSTEMS
<DATE-CHANGED>19940303
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<FILENAME>d425.htm
<DESCRIPTION>FILED PURSUANT TO RULE 425
<TEXT>
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<TITLE>Filed Pursuant to Rule 425</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">Filed by Nektar Therapeutics Pursuant to Rule 425 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">Under the Securities Act of 1933 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">And Deemed Filed Pursuant to Rule 14a-12 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">Under the Securities Exchange Act of 1934 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman"
SIZE="2">Subject Company: Aerogen, Inc. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">Commission File No.: 000-31913 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Nektar to Acquire Aerogen to Broaden Pulmonary Technology Base and Strengthen Capabilities for Treatment in the Acute Care Setting</B>
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">San Carlos, Calif.&nbsp;&amp; Mountain View,
Calif </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">August&nbsp;15, 2005 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Nektar Therapeutics (Nasdaq:NKTR) and Aerogen, Inc. (Pink Sheets:AEGN.PK) announced today
that they have signed a definitive merger agreement whereby Nektar will acquire Aerogen in a transaction valued at approximately $32 million. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">&#147;The acquisition of Aerogen broadens Nektar&#146;s pulmonary delivery capabilities by adding advanced inhaleable liquid drug technology to Nektar&#146;s base of
leading inhaleable powdered drug technology,&#148; said Ajit S. Gill, Nektar president and chief executive officer. &#147;Over the last ten years, Aerogen has built the capabilities for treatment of acute care pulmonary conditions, an area of
interest for us for proprietary products. The addition of Aerogen&#146;s technology, people, products, programs, and intellectual property with a patent portfolio of more than 35 patents will extend the range of inhaleable proprietary opportunities
for Nektar. We plan to provide greater detail on the Aerogen acquisition and how it fits with our proprietary products program at our investor meeting on September&nbsp;29, 2005.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Aerogen develops products based on its OnQ<FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>&reg;<FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000"></FONT></SUP><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"></FONT></FONT> Aerosol Generator technology to improve the treatment of respiratory disorders in the acute care setting. Nektar enables high-value,
differentiated therapeutics with its industry-leading drug delivery technologies, including inhaleable powdered drugs for treating systemic and local lung indications. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">&#147;We believe this transaction is in the best interests of our stockholders, customers and patients,&#148; said John C. Hodgman, Aerogen
president and chief executive officer. &#147;As a leader in advanced inhaleable powdered drug products, Nektar has an understanding of the value and potential of Aerogen&#146;s advanced inhaleable liquid capabilities. Aerogen technology and
expertise will facilitate the development of certain product opportunities that best lend themselves to an inhaleable liquid delivery system.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Terms of the Agreement </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">The transaction is structured as a cash and stock transaction, with Nektar providing approximately $8 million in cash and approximately $24 million in stock with the option of paying all in cash as described below.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Under the terms of the agreement, and upon completion of the acquisition, each
share of common stock will be exchanged for a total of approximately $0.75 per common share, comprising either $0.1875 in cash, and approximately $0.5625 per common share in Nektar common stock (valued based on the volume-weighted average price of
Nektar common stock during the twenty trading days ended two days prior to the completion of the acquisition) or all cash as discussed below. Also upon completion of the acquisition, each share of Aerogen A-1 preferred stock will be exchanged for a
total of approximately $29.0251 per A-1 Preferred share, comprising either $7.2563 in cash, and approximately $21.7688 in Nektar common stock (valued as described above), or all cash. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">At any time prior to September&nbsp;15, 2005, Nektar may, at its sole discretion, elect to pay the entire consideration
in cash, resulting in payments to Aerogen stockholders of approximately $0.75 in cash per common share and approximately $29.0251 in cash per A-1 Preferred share. It is anticipated that the merger will be treated as a taxable transaction. The
premium over the average closing price per common share over the last 30 trading days is 50%. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">The boards of directors of Nektar and Aerogen have approved the transaction, which is subject to Aerogen shareholders&#146; approval and other customary closing conditions. The transaction is anticipated to be
consummated sometime in the fourth quarter of this year. The transaction does not affect Nektar&#146;s previous guidance for year-end 2005 cash balance of greater than $270 million. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>About Aerogen </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Aerogen, Inc. develops products based on its OnQ Aerosol Generator technology to improve the treatment of respiratory disorders in the acute care setting. Aerogen has
commercialized its Aeroneb<FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>&reg;<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"></FONT></SUP><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"></FONT></FONT> Micropump Nebulizer
products for hospital, home and pre-clinical use through a network of world-class respiratory distribution partners that includes Puritan-Bennett, Respironics, Maquet, Cardinal Health, Evo Medical Solutions, and Buxco. Aerogen also has development
collaborations with pharmaceutical and biotechnology companies for use of its technology in the delivery of novel compounds that treat respiratory and other disorders. Founded in 1990, Aerogen has its headquarters in Mountain View, Calif. with a
facility in Galway, Ireland. In 2004, Aerogen reported revenue of $6.2 million and net loss of $10.1 million. For more information, visit www.aerogen.com. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>About Nektar </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Nektar Therapeutics enables high-value, differentiated therapeutics with its industry-leading drug delivery technologies, expertise and manufacturing capabilities. The world&#146;s top biotechnology and pharmaceutical
companies are developing new and better therapeutics using Nektar&#146;s advanced technologies and know-how. Nektar also develops its own products by applying its drug delivery technologies and its expertise to existing medicines to enhance
performance, such as improving efficacy, safety and compliance. For more information, visit www.nektar.com. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Additional Information about the Merger and Where to Find It </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">In connection with Nektar Therapeutics&#146; proposed acquisition of Aerogen, Inc. (the &#147;Acquisition&#148;), Aerogen intends to file a proxy statement and other relevant materials and Nektar intends to file a
registration statement/prospectus and other relevant materials, with the Securities and Exchange Commission (the &#147;SEC&#148;), in the event that Nektar does not make the election to pay all cash in the transaction. INVESTORS AND SECURITY HOLDERS
OF AEROGEN ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT NEKTAR, AEROGEN AND THE ACQUISITION. The proxy statement/prospectus and
other relevant materials (when they become available), and any other documents filed by Nektar or Aerogen with the SEC, may be obtained free of charge at the SEC&#146;s WEB site at www.sec.gov. In addition, investors and security holders may obtain
free copies of the documents filed with the SEC by Nektar by directing a written request to: Nektar Therapeutics, 150 Industrial Road, San Carlos, CA 94070, ATTN: Investor Relations. Investors and security holders may obtain free copies of the
documents filed with the SEC by Aerogen by contacting Aerogen, Inc., 2071 Stierlin Court, Suite 100, Mountain View, CA 94043, ATTN: Investor Relations. Investors and security holders are urged to read the proxy statement, prospectus and the other
relevant materials when they become available before making any voting or investment decision with respect to the Acquisition. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Nektar, Aerogen and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Aerogen in
favor of the Acquisition. Information about those executive officers and directors of Nektar and their ownership of Nektar common stock is set forth in the proxy statement for Nektar&#146;s 2005 Annual Meeting of Stockholders, which was filed with
the SEC on April&nbsp;14, 2005. Information about the executive officers and directors of Aerogen and their ownership of Aerogen common stock is set forth in the proxy statement for Aerogen&#146;s Form 10-K, which was filed with </FONT>
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<FONT FACE="Times New Roman" SIZE="2">the SEC on April&nbsp;15, 2005, as amended by Amendment No.&nbsp;1 on Form 10-K/A, which was filed with the SEC on April&nbsp;19, 2005. Investors and
security holders may obtain more detailed information regarding the direct and indirect interests of Nektar, Aerogen and their respective executive officers and directors in the Acquisition by reading the proxy statement/prospectus regarding the
Acquisition when it becomes available. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Aerogen Safe Harbor </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">To the extent any statements made in this release relate to information that is not
historical, these statements are necessarily forward-looking. As such, they are subject to the occurrence of many events outside of Aerogen&#146;s control and other uncertainties, and are subject to various risk factors that could cause
Aerogen&#146;s actual results to differ materially from those expressed in any forward-looking statement. The risk factors include, without limitation, the risk that the conditions to the Acquisition are not satisfied, that the Acquisition does not
close, the need for additional funding, the inherent risks of product development, clinical outcomes, regulatory risks and risks related to proprietary rights, market acceptance and competition, and are described in Aerogen&#146;s reports and other
filings with the SEC, including Aerogen&#146;s Annual Report on Form 10-K/A for the year ended December&nbsp;31, 2004, filed with the SEC on April&nbsp;19, 2005, and Aerogen&#146;s Quarterly Report filed on Form 10-Q for the quarter ended
June&nbsp;30, 2005, filed with the SEC on July&nbsp;27, 2005. Aerogen does not undertake any obligation to update forward-looking statements. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Nektar Safe Harbor </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">This release contains forward-looking statements that reflect management&#146;s current views as to Nektar&#146;s business strategy, product and technology development plans and funding, collaborative arrangements,
clinical trials, and other future events and operations. These forward-looking statements involve uncertainties and other risks that are detailed in Nektar&#146;s reports and other filings with the SEC, including its Annual Report on Form 10-K, as
amended, for the year ended December 2004 and its Quarterly Report on 10-Q for the quarter ended June&nbsp;30, 2005. Actual results could differ materially from these forward-looking statements. </FONT></P>
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