Novo moves forward with inhaled insulin
This morning Novo Nordisk (NYSE:NVO) announced they have acquired certain patent rights from Aradigm (NASDAQ:ARDM) as part of a restructuring of their existing license agreement regarding AERx® iDMS (insulin diabetes management system). The iDMS is the delivery system for Novo’s version of inhaled insulin. According to a press release issued by Novo the acquired patents are related to administration of proteins via inhalation. Aradigm will receive $27.5 million.
Some may recall that Novo had temporarily suspended development of this project as clinical trials produced less than promising results. However with Exubera, the inhaled insulin from Pfizer (NYSE:PFE), set to enter the market later this month Novo has decided to proceed with their version on inhaled insulin.
Interestingly in separate story by the Associated Press published yesterday the issue over Exubera’s cost and whether or not insurers will cover the drug was raised yet again. In the story David Beshara, chief pharmacy officer for Tennessee’s Medicaid program stated, “It’s safe to assume that unless Exubera is priced comparatively to insulin, it would not be added.”
The general belief among the analyst community has long been that consumers and insurers would be willing to pay a premium for Exubera because patients would not have to deal with the pain of insulin injections. At the American Diabetes Association (ADA) conference this past June, it was obvious that Pfizer is building their entire marketing effort for Exubera around this one fact. An effort that Diabetic Investor sees as misguided and doomed from the start.
The reality of the situation is the fact that Exubera really doesn’t work that well when compared to conventional insulin injections. The success of Byetta form Amylin (NASADQ:AMLN) and Lantus from Sanofi-Aventis (NYSE:SNY) proves something Diabetic Investor has been saying for sometime, the fact that a drug is injectable does not necessarily hurt its commercial prospects, results are what matters and physicians understand this better than most.
Add in the fact that Exubera’s delivery device is less than user friendly will only add to physician reluctant to prescribe the drug. It would safe to say that physicians who finally had a chance to see Exubera’s delivery device at the ADA came away less than impressed. Pfizer continues to downplay the concerns over the delivery device believing that fear of injections trumps all. What Pfizer fails to realize is that fear of injections is not the primary reason poor controlled type 2 patients avoid insulin therapy. If this was truly the case why are sales of Byetta, an injectable therapy, accelerating?
While Diabetic Investor believes insurers will cover Exubera, it is likely the drug will not receive preferential treatment. A fact that should not go unnoticed by the many companies, including Novo, who are developing their own versions of inhaled insulin. For any inhaled insulin to be commercially successful several elements are needed, the mere fact that the drug does not have to be injected is simply not enough. Something Pfizer and many analysts will learn over the next few after Exubera hits the market.
Note- In part two of our special report on devices and delivery systems Diabetic Investor will examine all the efforts underway in inhaled insulin. Set for publication this coming Monday July 10th, subscribers can still order the report. Part One is competed and ready for shipment. Subscribers can save 20% by ordering both of Diabetic Investor’s Special Reports. Our second special report on therapies is set for publication on October 20th, 2006. To order call 800-783-3712 or fax us at 847-634-4646 or send an email to firstname.lastname@example.org.