Market Spotlight: Inhaled Insulin

The move comes after rival Pfizer Inc. decided to pull its inhaled insulin, Exubera, from the market late last year after failing to gain ground, and Denmark-based Novo Nordisk canceled its Aerx program in January, also citing no confidence in its market prospects.

"It (inhaled insulin) was a huge plus for the small number of people who will just not take an injection, but it's a very small number of people," said Dr. John Buse, president of medicine and science at the American Diabetes Association.

For these companies and their partners, the lack of commercial potential for inhaled insulin represents a setback measured in time and money. Eli Lilly had partnered with Alkermes Inc. to develop the AIR insulin in 2001, while Nektar Therapeutics had been Pfizer's partner on Exubera since 1995. Though the companies could not provide individual figures, drug development expenses typically breach the $1 billion mark.

Buse noted that the development of an inhaled insulin product began well over a decade ago, when insulin was one of the few treatment choices for diabetics. While the number of Americans with diabetes continues growing, the majority are type 2 diabetics, which means their bodies produce insulin but there is a malfunction in how it's used. Type 1 diabetes patients, on the other hand, don't produce insulin and need infusions of it to survive. But, they only make up about 10 percent of the diabetes population.

Over the last several years, a myriad of treatments have been approved that help those patients regulate the insulin they already have. "Things have changed a lot in the last decade," he said, citing the larger selection of medications used to manage diabetes, often through helping a patient better use the insulin he or she is already producing.

Other factors holding back the insulin inhaler market could include hesitance over the unknown long-term effects of inhaling insulin, even though the treatments haven't shown any safety issues in clinical trials.

The cancellation decisions from big pharma could weigh heavy on MannKind Corp., the last player in the field, which is still developing its own product and said it will continue to do so.

MannKind maintained that while none of the products offered any advantage over current injectable treatments, its TechnoSphere inhaled insulin, now in late-stage studies, will actually be more effective than current diabetes treatments.

Some analysts remain optimistic that MannKind can succeed where others have failed. "MannKind's Technosphere insulin system could become the therapy of choice for the treatment of diabetes, based on its performance, convenience, and ease of use," said Wachovia Capital Markets analyst, Michael Tong, in a note to investors Tuesday.