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In the pipeline: Exubera
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August 16, 2001: 1:49 p.m. ET
Inhaled insulin expected to be a blockbuster; FDA may need more data
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NEW YORK (CNNfn) - Inhaled insulin, a drug which could make life easier for many of the 100 million diabetics worldwide by replacing injections, was expected this year. But with regulators likely to request more data, the makers of the most advanced version of inhaled insulin, and their potential customers, are waiting to inhale.
Exubera is one the most-anticipated drugs in development and analysts said it could be a blockbuster. The drug is designed to be delivered by an inhaler at room temperature, replacing multiple daily insulin injections, and is one of the top drugs in a strong Pfizer pipeline.
No. 2 pharmaceutical company Pfizer is developing the drug with Aventis and much-smaller Inhale Therapeutic Systems.
In November 1998, Inhale struck a deal with Pfizer and Hoechst Roussel AG, now part of Aventis (AVE: down $0.85 to $75.65, Research, Estimates), to develop an inhaled insulin product, with the larger companies building an insulin manufacturing plant and providing the marketing.
Pfizer called the drug "a first-in-class product, with novel attributes and expected rapid, extensive usage" in its second-quarter earnings report last month.
But in that same report, the company said the U.S. Food and Drug Administration is likely to request more Phase III clinical data, which would mean a much longer wait for the launch of the drug.
Exubera was scheduled for launch at the end of this year, but analysts now are pointing to the end of 2002.
In June, Pfizer (PFE: down $0.12 to $41.09, Research, Estimates) said in one study that patients taking inhaled insulin were more likely to develop antibodies against the insulin than those injecting, which would reduce the long-term effectiveness of the drug.
Pfizer has not officially changed its schedule on Exubera. The company said it is still in active talks with the FDA and will make an announcement if more data is required. Analysts said it would be a big surprise if the drug was released this year, but didn't think the delay will have too much effect on such a large company.
"I happen to believe in Exubera ultimately," said Cynthia Glass, analyst with ThinkPartners Equity. "But I didn't think it was going to be a hop, skip and a jump with the FDA."
Glass said Pfizer is probably doing the right thing by taking its time and not trying to push too hard to meet the original Exubera schedule.
But while Pfizer has more drugs coming through its pipeline and more than $32 billion in revenue flooding in from other products, a long wait for Exubera may prove more tricky for Inhale.
Can Inhale survive the wait?
Inhale (INHL: down $0.27 to $15.50, Research, Estimates) is projected to have annual revenue of a little more than 0.2 percent the revenue of Pfizer. It also has yet to make a profit and is relying on the potential sales of Exubera.
Investors were not happy with a possible delay and the company's stock has fallen about 22 percent since Pfizer announced the FDA may require more data.
But Glass said the company's recent strategic acquisitions, including its July acquisition of Shearwater Corp. for about $164 million, have added products and partnerships which should help the company outlast the Exubera wait.
Michael Hurle, analyst with Leerink Swann & Co., said at the current stock price, around $15.50, and with Inhale's assets and cash reserves of about $400 million, buyers of the stock would be getting any Exubera benefits for free.
"While the stock has been punished by what hasn't happened with Pfizer, you've basically got a situation where the drain is being thrown out with the bathwater," Hurle said.
But he said that Exubera revenue isn't just around the corner.
"I don't think many people are holding their breath on inhaled insulin," he said.
In the Pfizer pipeline
Along with Exubera, Pfizer continues to tout the rest of its pipeline, which has 156 projects in development.
The company plans to file two other major drug applications during the next twelve months. Valdecoxib is a pain medication in the Cox-2 inhibitor class, a drug sector pioneered by Merck's (MRK: up $0.64 to $69.54, Research, Estimates) big-selling arthritis drug Vioxx.
Pfizer also has epilepsy treatment Pregabalin scheduled for a new drug applications.
Among those drugs undergoing global regulatory review are Zeldox, a treatment for psychotic disorders, with labeling discussion ongoing with the FDA, migraine headache treatment Relpax, and Vfend, which treats serious fungal infections.
Also in the cards is Pagoclone, a drug for panic disorders which could help an estimated 60 million people. The drug is currently in Phase III clinical trials. 
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