Pfizer's inhaled-insulin struggles may haunt class

NEW YORK (Reuters) - Sales of Pfizer Inc.'s (PFE.N) new inhaled insulin, Exubera, are off to such a sluggish start that the launch has cast doubts on the company's ability to hit its sales goals and may tarnish prospects for competitors.

Exubera, which was also developed by Nektar Therapeutics (NKTR.O), is the first approved insulin that diabetics inhale rather than inject.

But since its approval in January 2006, total weekly prescriptions in the United States have grown to only about 1,300, according to recent data from analysts. By comparison, Merck & Co.'s (MRK.N) newly launched Januvia diabetes pill recently hit 39,000 prescriptions.

"It's one of the worst launches ever," Natexis Bleichroeder analyst Jon LeCroy said of Exubera.

Exubera has been dogged by concerns about cost to the patient, lung safety and inconvenience of the device used to give the insulin, analysts say.

The disappointing launch has led some analysts to project peak annual sales at levels far below the $2 billion that Pfizer said in January the product would eventually reach.

LeCroy projects that Exubera will reach only $300 million. Merrill Lynch analyst David Risinger last week cut his 2012 forecast for U.S. Exubera sales to $250 million from $635 million.

Some analysts say Exubera's slow start has also led to questions about the prospects for other inhaled insulin products, which trail Exubera by at least three years.

PROSPECTS OF RIVALS

MannKind Corp. (MNKD.O); a partnership of Eli Lilly and Co. (LLY.N) and Alkermes Inc. (ALKS.O); and Novo Nordisk A/S. (NOVOb.CO) have inhaled insulins in development.

"My perspective is it's bad for everyone, because it means that the concept of inhaled insulin doesn't have a whole lot of cheerleaders out in the physician community," LeCroy said.

David Kliff, publisher of the Diabetic Investor electronic newsletter, said that after Exubera's disappointing launch, physicians may be more wary of subsequent inhaled insulins.

"Any time you have a first-generation product with so much hype and so much free media that fails, you raise the bar for whoever's next in line," Kliff said.

"I think that it has made the road for Lilly and MannKind a little bit more difficult," Kliff added.

Pfizer began a phased launch of Exubera early last year to specialist doctors and expanded the launch to primary care physicians in January of this year.

MannKind shares have fallen about 30 percent from $21 in October.

Exubera's slow launch "has been part of (MannKind's) negative drift downward," LeCroy said.

Alfred Mann, CEO of MannKind, said the company would rather that Exubera be successful to get patients and doctors comfortable with the idea of inhaled insulin. But he said MannKind's insulin has clinical differences from Pfizer's product as well as from other insulins.

Mann said his company's product acts quickly, with better glucose control that includes few cases seen for low blood sugar, or hypoglycemia.

"Our problem is going to be we need to educate people why our product is totally different," Mann said.

Rebecca Peterson, vice president of corporate communications for Alkermes, said its insulin being developed with Lilly is administered with an easy-to-use device about the size of an asthma inhaler.

Exubera has been criticized as cumbersome, although Pfizer says patients who have used the device do not complain about it.

"We believe we have a much better mousetrap that would enable patients to more readily and easily take their medication," said Peterson, who also said the large clinical trial program for the product stands to distinguish it.

NOT THROWING IN TOWEL

For Pfizer, which has annual sales of about $50 billion, Exubera is one of a number of new drugs that it hopes will help reinvigorate sales as its older medicines face competition from generics.

Shares in Nektar, its smaller co-developer, have fallen 44 percent from a year-high in May 2006.

Pfizer's short-term struggles aside, some analysts say marketing efforts by the world's largest drugmaker still could help rivals by acclimating patients and doctors to inhaled insulin.

Rochelle Chaiken, a Pfizer medical executive for cardiovascular and metabolism, said it has taken a while to educate physicians and medical staff about the use of Exubera and the importance of early insulin use.

"We underestimated the kind of education an innovative product like Exubera would need in doctors' offices," Chaiken said.

Pfizer plans to start a consumer advertising campaign for Exubera this summer, and its impact will be closely watched.

"This may be a market where being a fast-moving second or third entrant frankly is the ideal spot," CIBC analyst Elliot Wilbur said. "Pfizer is going to make this significant upfront investment in terms of opening the market's eyes and converting the initial patient base to the concept of pulmonary insulin."

Wilbur also said it was too soon to dismiss Exubera, adding that the $2 billion in annual sales remained an "achievable goal" but may take longer to reach than the company originally expected.

While agreeing that Exubera's launch has been disappointing, Wilbur said, "It's not a battle that's going to be won and lost in a six-to-12 month period."