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By Lewis Krauskopf
NEW YORK, April 9 (Reuters) - Pfizer Inc (PFE.N) and Nektar Therapeutics (NKTR.O) said on Wednesday clinical trials of the inhaled insulin Exubera found increased cases of lung cancer, leading Nektar to stop seeking a marketing partner for the troubled product and abandon it.
Nektar shares tumbled 25 percent, while shares of MannKind Corp (MNKD.O), which has been developing its own inhaled insulin, plummeted 58 percent. Pfizer was down slightly at $20.90.
The lung-cancer revelation dealt a final setback to Exubera, which held the promise of letting diabetics avoid needle sticks and was once projected by Pfizer to be a $2 billion-a-year blockbuster. Instead, Exubera has been a commercial flop that has sullied the inhaled insulin field.
Over the course of the clinical trials, Pfizer said six of the 4,740 Exubera-treated patients versus one of the 4,292 patients not treated with Exubera developed lung cancer. One lung cancer case was also found after Exubera reached the market.
Pfizer said on Wednesday it updated the product’s labeling to include a warning with safety information about lung cancer cases found in patients who used Exubera, which U.S. regulators approved in January 2006.
The warning states all patients who developed lung cancer had a history of cigarette smoking, and that too few cases existed to determine whether the development of lung cancer is related to Exubera use.
Despite high hopes for Exubera, it garnered few prescriptions. The medicine was dogged by concerns about lung safety and about the inconvenience of the bulky device used to administer the product.
Pfizer said in October it would stop marketing Exubera and returned rights to Nektar. Pfizer reported $12 million in Exubera sales through the first three quarters of 2007; in October it took a pretax charge of $2.8 billion related to exiting Exubera.
Since then, Exubera has not been actively marketed but existing patients were able to get prescriptions while transitioning to an alternative therapy.
The warning in the label stemmed from an ongoing review of data from the Exubera clinical trial program and post-marketing experience by Pfizer and the U.S. Food and Drug Administration, Pfizer said.
Pfizer said it will be discussing withdrawals of marketing authorizations for Exubera with regulatory agencies.
Nektar said it will cease all spending associated with its inhaled insulin programs, including a next-generation version in early clinical testing, and will not incur charges related to the event.
“The news of an increased number of lung cancer cases is disappointing given that as recent as the year-end quarterly conference call, management reiterated the high level of interest from potential partners,” Pacific Growth Equities analyst Patricia Bank said in a research note.
Bank downgraded her rating on Nektar stock to “Neutral” from “Buy” on the news.
Nektar Chief Executive Howard Robin said in a statement the company has moved away from inhaled insulin the past year. Its experimental pipeline includes a treatment for pneumonia in the lung about to enter late-stage development, and mid-stage projects for colorectal cancer and opioid-induced constipation.
MannKind has been steadfast in its commitment to its experimental inhaled insulin, Technosphere Insulin, saying it held advantages over the other products.
But Natixis Bleichroeder analyst Jon LeCroy downgraded his rating on MannKind stock to “Sell” from “Hold” on the Exubera news.
“We view this as an absolute disaster for MannKind and do not see a believable scenario in which the FDA would approve another inhaled insulin,” LeCroy said in his downgrade note.
MannKind shares were off $3.39 at $2.46 in morning trading on the Nasdaq to a multiyear low. Nektar shares fell $1.79 to $5.40. (Reporting by Lewis Krauskopf; Editing by Brian Moss and Maureen Bavdek)