The Future of Inhalable Insulin :: Michael Shulman's Biotech Blitz

The Future of Inhalable Insulin

Is There A Future for Inhalable Insulin?

The annual conference and trade show of the American Diabetes Association kicks off tomorrow and one question on the minds of many investors is the future of inhalable insulin. Billions of dollars have been put into research and clinical trials, and with only one product, Exubera, from Nektar (NKTR) and Pfizer (PFE) having been approved yet, many on Wall Street are skeptical.

They are wrong.

ChangeWave Alliance surveys of physicians have consistently shown inhalable insulin, if made available and properly marketed, would be a smash success. The failure to date of Exubera is a management and sales issue with Pfizer -- a company relatively new to the diabetes field and on the back of its heels due to competition from generics, large scale layoffs and restructuring.
Simply put, PFE screwed up the first launch and is now re-launching the product with a campaign that includes direct-to-consumer advertising.

The failures of Exubera, to date, have not only hurt the price of Nektar stock but also the price of two other companies developing inhalable insulin products: Aradigm (ARDM) and MannKind (MNKD). That failure is also weighing on the stock of Alkermes (ALKS).

Aradigm is partnered with Novo Nordisk, the marketshare leader in conventional insulin; MannKind is going it alone; Allkermes is partnered with diabetes heavyweight Eli Lilly (LLY).

I follow all these companies and the only one I do not like is MannKind due to its lack of a partner. It's not just that a partner shares cost - the problem is that cracking the diabetes market is very difficult, just ask the folks at Pfizer.

Could I be too optimistic? No.

ChangeWave Alliance surveys predicted that Amlyin's Byetta would be a runaway success (and it is) at a time when Wall Street geniuses, talking to highly specialized endocrinologists who were resistant to change, said it would fail. The same scenario will play out with inhalable insulin, for if Pfizer does not figure it out, surely companies with experience in this market such as Novo Nordisk and Eli Lilly will.

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Is There A Future for Inhalable Insulin? The annual conference and trade show of the American Diabetes Association kicks off tomorrow and one question on the minds of many investors is the future of inhalable insulin. Billions of dollars have been put into research and clinical trials, and with only one product, Exubera, from Nektar (NKTR) and Pfizer (PFE) having been approved yet, many on Wall Street are skeptical. They are wrong. ChangeWave Alliance surveys of physicians have consistently shown inhalable insulin, if made available and properly marketed, would be a smash success. The failure to date of Exubera is a management and sales issue with Pfizer -- a company relatively new to the diabetes field and on the back of its heels due to competition from generics, large scale layoffs and restructuring. Simply put, PFE screwed up the first launch and is now re-launching the product with a campaign that includes direct-to-consumer advertising. The failures of Exubera, to date, have not only hurt the price of Nektar stock but also the price of two other companies developing inhalable insulin products: Aradigm (ARDM) and MannKind (MNKD). That failure is also weighing on the stock of Alkermes (ALKS). Aradigm is partnered with Novo Nordisk, the marketshare leader in conventional insulin; MannKind is going it alone; Allkermes is partnered with diabetes heavyweight Eli Lilly (LLY). I follow all these companies and the only one I do not like is MannKind due to its lack of a partner. It's not just that a partner shares cost - the problem is that cracking the diabetes market is very difficult, just ask the folks at Pfizer. Could I be too optimistic? No. ChangeWave Alliance surveys predicted that Amlyin's Byetta would be a runaway success (and it is) at a time when Wall Street geniuses, talking to highly specialized endocrinologists who were resistant to change, said it would fail. The same scenario will play out with inhalable insulin, for if Pfizer does not figure it out, surely companies with experience in this market such as Novo Nordisk and Eli Lilly will.