Novo Sues Pfizer
This morning Novo Nordisk (NYSE:NVO) announced results for the first six months of 2006 which included a surprise, the company has filed a patent infringement lawsuit against Pfizer (NYSE:PFE) over their inhaled insulin product Exubera. Pfizer had previously announced they were planning on launching Exubera in the United States next month. According to Jim Shehan, general counsel for Novo Nordisk, “We’re trying to protect our intellectual property. We’ve been a leader in diabetes for 80 years. For us to keep that leadership position it’s essential that our intellectual property rights are respected.” It should be noted that Novo is currently in phase III trials for their own version of inhaled insulin.
Diabetic Investor is somewhat surprised by this move as we do not expect Exubera to reach blockbuster status, nor do we see the Novo inhaled insulin project as much of an improvement over Exubera. The lawsuit will surely be watched closely as there are several companies working on their own versions of inhaled insulin, MannKind Corporation (NASDAQ:MNKD) which reports earnings tomorrow at 8 am EST, Eli Lilly (NYSE:LLY) who’s partnered with Alkermes (NASDAQ:ALKS) and KOS Pharmaceuticals (NASDAQ:KOSP). Of course Pfizer’s partner with Exubera Nektar Therapeutics (NASDAQ:NKTR) will likely have something to say about the lawsuit when they report earnings tomorrow at 5 pm EST.
In the end Diabetic Investor sees the lawsuit as a non-event no matter what the outcome. The Street is enamored with inhaled insulin for one reason only; analysts incorrectly believe that patients and their physicians will folk to any insulin product that does not require “painful” insulin injections. As we have pointed out on numerous occasions inhaled insulin is a niche product unlikely to reach blockbuster status in its current form. (Feel free to check the archives section of our web site www.diabeticinvestor,com for our many issues and email alerts on Exubera and inhaled insulin in general.)
It’s important to note that even if future forms of inhaled insulin have more user friendly delivery devices, this is still insulin. While it is true that patients not currently on insulin therapy would appreciate a non-injectable form of insulin, the fact of the matter is insulin therapy no matter how the insulin is delivered remains complex. Keep in mind that inhaled insulin is being targeted at type 2 patients currently failing to achieve adequate control using oral medications alone. The same target market for Byetta from Amylin Pharmaceuticals (NASDAQ:AMLN). Although Byetta must be injected twice daily the drug is being widely adopted and is experiencing accelerating sales growth. The success of Byetta proves Diabetic Investor’s point that results and ease of use are more important than how the drug is delivered. Unlike insulin, patients on Byetta do not need to check their glucose levels prior to injecting, they inject the same amount each time no matter what they have eaten or what their expected activity level is and most importantly patients on Byetta have a low incidence of hypoglycemia.
During the American Diabetes Association Scientific Sessions this past June several physicians commented that patients viewed moving to insulin therapy as a personal failure.
According to these physicians patients aren’t afraid of injections, they are afraid of insulin.
What analysts miss when they look at inhaled insulin is how dramatically the life of patient changes when they move to insulin therapy. Moving to insulin therapy requires a paradigm shift for the patient as they must now check their glucose levels frequently, learn how to count carbohydrates, understand how activities such as exercise affect their glucose levels and most important they must learn to recognize and deal with the hypoglycemia.
From the viewpoint of the physician, in particular a primary care physician, initiating insulin therapy can be a nightmare. Unlike diabetes specialists who are likely to have diabetes educators on staff who can help train the patient, primary care providers lack the time and infrastructure to deal with additional educational requirements which insulin therapy requires. Note that nearly 80% of patients with diabetes are treated by a primary care physician, who on average spends less than 12 minutes with a patient during each visit.
The bottom line for Exubera and all the other forms of inhaled insulin is the one fact that the insulin is not injected does not overcome the reality that insulin therapy is complex. Once again the Street has become fascinated with the technology without understanding the real world usage of the product. This isn’t the first time this has happened and Diabetic Investor guarantees this won’t be the last time it happens.