Sector Snap: Inhaled Insulin

An already faltering pharmaceutical industry effort to develop inhaled insulin suffered another severe blow Wednesday after Pfizer Inc. said its now-discontinued Exubera could cause lung cancer.
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Pfizer pulled the product from the market late last year after sales failed to gain ground, though some patients continue taking the drug. The company's former partner, San Carlos, Calif.-based Nektar Therapeutics, said it will end its inhaled insulin programs.

Shares of New York-based Pfizer fell 17 cents to $20.83 in morning trading, but Nektar felt the brunt of the new warning as shares fell $1.71, or 23.8 percent, to $5.53. The stock hit a 52-week low of $5.15 earlier in the session.

Pfizer said Exubera's label noted that patients who developed lung cancer had a history of cigarette smoking, and there were too few cases to determine whether the cancer is related to the insulin. Still, the damage from the warning was enough to sink shares of MannKind Corp., which only a month ago said it would continue development of its TechnoSphere inhaled insulin.

The stock lost more than half its value, at one point hitting an all-time low of $2.18 in morning trading. The Valencia, Calif.-based company is the last key player in the development field, following the exit of Eli Lilly & Co. and its partner Alkermes Inc. Eli Lilly pulled out of the AIR insulin program, citing a lack of confidence in the marketplace and possible regulatory hurdles.

Shares of Indianapolis-based Eli Lilly fell 22 cents to $52.08 while shares of Cambridge, Mass.-based Alkermes fell 59 cents, or 5.1 percent, to $11.10.

MannKind could not immediately be reached for comment Wednesday and has not made a statement on future plans for its program. The drug is in late-stage development, the most expensive stage of the drug development process.

"It is initially unclear to us exactly how/if this will impact development of MNKD's TechnoSphere, which is based on different technology and delivery system than Nektar's Exubera, but similar in that both deliver insulin to the lungs," said Robert W. Baird & Co. analyst Thomas Russo, in a note to investors.

He said it may now become more difficult for MannKind to receive Food and Drug Administration approval for the inhaled insulin candidate and to attract a commercial partner. He reaffirmed a "Neutral" rating on the company.

Denmark-based Novo Nordisk was also developing an inhaled insulin, but canceled its Aerx program in January. Its stock fell $1.64, or 2.3 percent, to $71.39.

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Associated Press