Pfizer Reports More Exubera Problems

Pfizer Reports More Exubera Problems

Pfizer (NYSE:PFE) is the latest company to report third quarter results. According to the press released issued by the company “Exubera’s innovative and complex manufacturing process requires highly automated, specially engineered Pfizer equipment. As in any large-scale manufacturing process utilizing advanced technology, we have experienced typical scale-up issues that we have made significant progress in addressing. Over the next few months, we will continue our ramp-up of Exubera to provide sufficient supply for expanded demand based on the January 2007 roll-out.”

If you think that sounds familiar it should back on August 3rd of this year Diabetic Investor wrote, “Diabetic Investor has learned that there are manufacturing issues with Exubera’s delivery device and full rollout of the product may not happen until late January or early February of next year.”

Exubera’s problems aren’t limited to the manufacturing of the device. Also giving Pfizer fits is their own sales force. Pfizer sales reps are up in arms over Exubera; basically they see the product as a loser not worthy of their efforts. Part of the problem has to do with the amount of time they are spending with physicians, nurses and patients training them on how to use Exubera and its cumbersome device. Early reports from the field indicate it’s not unusual for rep to spend two or three hours per patient during the training phase. As Diabetic Investor has reported for sometime selling Exubera is similar to selling insulin pumps. This high degree of hand holding and training is par for the course with insulin pumps but a whole new experience for sales rep used to selling Celebrex. Sentiment is so bad with sales reps that Pfizer is considering changing the sales group that handles Exubera.

It should also be noted that during today’s call Pfizer was reluctant to commit to a time frame when we’ll see direct to consumer advertising for Exubera. Something that should speak volumes about how the company actually feels about the product.

Given the manufacturing problems, lack of support from the field force and negative reports from early adopters it’s doubtful that Exubera can recover and become the blockbuster that so many analysts predicted. Exubera’s target audience is type 2 patients who are poorly controlled using oral medications, a market that’s treated by primary care physicians who lack the infrastructure and time for this product.

While it’s too early to classify Exubera as a failure and Pfizer certainly has the resources to make a go of it, if they truly believe Exubera can reach blockbuster status. Market forces, looked at realistically, do not bode well for Pfizer. Januvia and Galvus are coming to market, two very effective oral medications that are also targeted at the type 2 market. Byetta sales continue to accelerate, another product target at poorly controlled type 2 patients.

The bottom line is that Pfizer rolled the dice and bet the ranch on the one fact that Exubera is an inhaled form of insulin. They believed that since a patient did not have to suffer through daily insulin injections they would embrace Exubera. Where Pfizer miscalculated was the fact that patients aren’t afraid of insulin injections, they are afraid of insulin. They also incorrectly believed that patients would put up with a cumbersome and difficult to use delivery device, just to avoid injections. They further miscalculated the amount of time and effort to properly train physicians, nurses and patients. Finally, they chose to place the product with sales people who have little or no experience with diabetes. The company hasn’t crapped out yet but as we all know the odds are with the house they will.

David Kliff
Diabetic Investor
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