BB&T Executive Editor

Inhaled insulin, the alternative to needle injection of insulin – very likely to be the next big drug/device combination since the approval of drug-eluting stents.

Inhaled insulin – likely to be the next blockbuster, given the size of the population of those with diabetes looking for faster, easier methods for controlling their meteabolism.

Inhaled insulin – a lock for big profits.

Apparently not, for all of the above.

Last month, Novo-Nordisk (Bagsvaerd, Denmark) became the second company in the past four months to give up on the effort, saying that it was dropping development of its inhaled insulin product, saying that the prospects for profitability were too low to continue the effort. The dropped would also cost hundreds of emplyees their job at the company’s Hayward, California, site.

The company’s product in development was branded AERx IDMS, and the product was to be delivered by an electronic pulmonary system for fast administration. That system was in development by Aradigm (Hayward), and Novo-Nordisk’s move was a jolt to that company’s prospects.

Novo-Nordisk had been considering for the past weeks the move by a big player in this effort, Pfizer (New York), which had won approval for and commericalized its inhaled insulin, Exubera, and its decision to walk away from further efforts to sell the product, given the large failure of what had been great expectations.

Pfizer had assumed it would immediately take over a good-sized chunk of the insulin market but had seen it develop only a miniscule 1% of that sector – small potatoes and little prospects for future profits, given the time and work in its development effort.

Pfizer’s move likewise damaged what had been hopeful prospects for its partner in the device development side of the research, Nektar (San Carlos, California), a unit of West Pharmaceuticals (Lionville, Pennsylvania). Nektar’s big hope, of course, had been the vision of snagging 10% of royalties on a billion-dollar product.

But Nektar’s side of the effort was cited as one reason for Pfizer’s move. Nektar’s delivery inhaler looked somewhat like a taller, thinner tennis ball can – and not, or thought not, user-friendly.

Nektar issued bristly statements about Pfizer’s decision, but its feathers were smoothed by a $143 million to Pfizer to close out any contractual agreements concerning Exubera, and Nektar indicated that it might continue development of the product on its own.

Mads Krogsgaard Thomsen, chief science officer at Novo-Nordisk, during a conference call on the move, said the decision to discontinue further development of AERx iDMS was based on an analysis of “a vast amount of information” which included recent market research involving patients’ and physicians’ experience with Exubera. He said that Novo-Nordisk concluded “that a breakthrough in inhaled insulin takes more than AERx can offer.”

Krogsgaard Thomsen emphasized that the company’s decision was not due to safety concerns and, specifically, that Phase III testing had revealed no safety problems.

After a thorough review of the medical rationale for inhaled insulin and the competitiveness of the AERx iDMS system compared with insulin injection devices, such as Novo Nordisk’s Flexpen, he said that the firm concluded that “fast-acting inhaled insulin in the form it is known today is unlikely to offer significant clinical or convenience benefits over injections of modern insulin with pen devices.”

Most patients with Type II diabetes who start insulin therapy use long-acting insulin products, he noted.” Experience shows that they want very simple, very convenient devices for administering their insulin,” Krogsgaard Thomsen said.

Novo-Nordisk, he said, decided to focus its research on inhalation systems for long-acting formulations of insulin and analogue insulins, such as those based on glucagon-like peptide-1 (GLP-1).

While the firm will keep about 50 scientists employed at its Hayward site to work on the GLP-1 and long-acting inhalational insulin programs, the company is laying off about 300 employees at that location, he said.

AERx IDMS, the electronic delivery system for administering the insulin by inhalation, was being tested in nine Phase III clinical trials involving more than 3,000 patients, said Igor Gonda, CEO of Aradigm. The company said that the patients in those studies will be switched to other insulin therapies recommended by their physicians.

The crux of the argument currently for fast-acting inhalational products, Gonda said in an interview, lies in a patient’s willingness to convert from an injection product to an inhalational product.

Gonda said it currently is unclear what role his firm would play in Novo Nordisk’s new development program.

Aradigm, he said, must first consider what is best for its investors and long-term plans for its development pipeline before entering into any negotiations with Novo-Nordisk.