Thursday, July 05, 2007

Exubera Manufacturer Cuts Jobs Due to Poor Sales

Well, this news story is hardly surprising to most people with diabetes, as I have reported since March 2006 (see my posts here, here, and here), I believe that the inherent assumptions behind the predictions of Exubera's blockbuster status were grossly over-estimated. For one thing, the drug is close to worthless to more than half of the insulin-using population, including virtually all of the 1.7 million type 1 diabetes patients who require insulin for survival because dosages can only be delivered in 3-unit increments which may not be accurate enough. Many patients have chosen insulin pumps because they can dose in increments of 0.01 units, yet this newcomer to the market is moving in the opposite direction in terms of dosage precision. Meanwhile, the type 2 market has more treatment options than at any point in history, and some of the more promising newer treatments (I'm thinking of Byetta, for example) must be injected, but have nevertheless done extraordinarily well because a side-effect of weight loss. Its obvious that Pfizer did a poor job of researching this market, but that has not stopped rivals including Eli Lilly and Company and Novo Nordisk from investing in inhaled insulin products, except that the consensus seems to be these companies will not make the same mistakes Pfizer did.

Regardless, on Tuesday, Diabetes In Control reported that the UK-based drug delivery device manufacturer said that following the slow take-up of Exubera by diabetes patients, Nektar Therapeutics and Pfizer have revised their short term forecasts for the inhalation device, which will result in a reduction in production.

Exubera is a powdered insulin product that is inhaled into the lungs before a meal, using a proprietary inhalation device made under contract on a 50:50 split by Bespak along with The Tech Group, which is part of West Pharmaceuticals Services.

Bespak has been developing the inhaler's manufacturing process since July 1999 and the company's Milton Keynes facility is almost exclusively geared towards the high volume production of the Exubera device. However, the company does not disclose the amount of devices that have been made so far.

Bespak said it is embarking on a consultation process with the 160 staff involved in the production of the Exubera inhaler and expects to reduce the team involved in the Exubera contract.

Jonhathan Glenn, Bespak's financial director, stated that, "The procedure will take three months after which we will make a significant number of redundancies.

But Glenn said his company was confident about the future of Exubera, especially with the huge forthcoming advertising campaign Pfizer is launching in the U.S., and which is expected to kick off in September.

"Pfizer and Bespak expect that the direct consumer advertising operation will have a great impact on sales and will hopefully lead to a significant ramp-up in production," said Glenn.

"We know that once patients use Exubera, they don't give it up so the key issue is to increase significantly the up-take."

On the other hand, Exubera could represent an expensive flop for Pfizer if it does not achieve the blockbuster status the industry had hoped for.

Exubera was expected by its makers as well as many Wall Street analysts, to be a revolution for the treatment of Type 2 diabetes and to be an important step for patients who are postponing insulin therapy to avoid injections, and thus a major blockbuster. So far, the drug has not met expectations.


BetterCell said...

There was always the question of Pulmonary problems associated with Inhaled Insulin, which also contributed to their problems.
The fact that Eli lilly and Novo Nordisk want to get involved in Inhaled Insulin us a mistake. They should put their R&D $$ to making C-peptide injectables available instead.
There is more of a profitable market available for the manufacture of C-peptide or anything else that will target Diabetes-related Complications. This is where the focus should be put, rather than the delivery of Insulin!!!!!
The gauge on injectable needles (31) are so thin so as to afford virtually "pain-free" injections to anyone. In addition the Insulin Analogues provide very fast absorption rates, so again the advantage to the Pulmonary site becomes meaningless as far as immediate action.

Scott S said...

The fact is that the type 1 market is simply not large enough to attract the interest of big pharma, which is fixated not on profitable niche products, but on blockbusters that sell more than $1 billion per year.

I agree with your thoughts on strategy, but frankly, our thoughts really don't matter to the executives running these companies, only visions of blockbusters seem do. Luckily, Wall Street has grown very tired of this business model, and the stocks for most of the big pharmaceutical companies have languished over the past 3 years. Given the lackluster drug pipelines, they should not expect their shares to do much better anytime soon. Its time for new management!

Wingman said...

Scott, I spoke with 2 sales reps - one was Rene who was excellent and I can't remember the other persons name - I'll forward you their info from my office on Monday.

Chrissie in Belgium said...

Scott - where did I read about coke? Please help me here. I am getting hysterical. TRULY! Pls read by last blog entry/comment!