It appears that a signficant revelation was made by two pharmaceutical investment analysts about what could be a huge potential risk to the production of Exubera inhaled insulin by Pfizer, Inc. (NYSE:PFE) and Nektar Therapeutics (NASDAQ:NKTR)

The disclosure of what appears to be a very big Exubera production risk was revealed by two pharmaceutical investment analysts from WR Hambrecht + Co., Andrew Forman and Wellington Chang, MD:

“Nektar makes all the dry powder insulin (the doses that are inhaled) at its headquarters in San Carlos [California], and Pfizer has been getting all it has ordered there.”^*

W.R. Hambrecht + Co., an investment bank that ‘maintains a market’ (i.e., owns shares) in Nektar, having invested in it’s development. The company has been following Nektar’s performance closely.
Could Nektar’s production of “all the dry powder insulin” at its California headquarters create a possible problem for manufacturing Exubera if, as sometimes happens in the San Francisco Bay Area, an earthquake in the region affected the company’s production headquarters? It sure seems like it.

Might such an event affect Pfizer of the drug? If what the analysts say is true, it sure seems like it. Especially in light of Pfizer’s recent disclosure that it doesn’t expect to release Exubera to general practitioners until early next year. A UBS analyst downgraded the company’s recommendation on Pfizer, Inc. (NYSE:PFE) stock following that disclosure.
Wouldn’t it make far more sense for Nektar to have redundant Exubera powder production facilities in other locations around the world?

Of course, any drugmaker wants to have rigourous quality control over its product to ensure its effectiveness, compliance with any FDA production requirements, and to prevent contamination that could affect a drug’s safety.
If what the WR Hambrecht + Co. analysts are saying is really true, then it seems like a big question for Pfizer and diabetics who would use Exubera to start asking. Could the ability to get a drug they rely upon suddenly run into production problems?
Why would only one production facility for Exubera’s core ingredient — the dry powder insulin — exist? That would seem to affect its ability to distribute the inhaled insulin worldwide in other markets, like the European Union, where the drug has already been approved and put into use (e.g., Britain, Ireland, and Germany).

This blog has learned more information about Exubera’s cost, the new inhaled insulin developed by Pfizer, Inc. (NYSE:PFE) and Nektar Therapeutics (NASDAQ:NKTR).

According to W.R. Hambrecht + Co., an investment bank that ‘maintains a market’ (i.e., owns shares) in Nektar, a starter Exubera kit is priced just under $200:

Blister packs are shipped along with the Exubera device, initially bundled in starter kits priced at around $182 (a month’s supply which costs diabetics about $20 to $35 for Tier 2 co-pay or around $50 for Tier 3).^*

Will more health insurer’s cover Exubera’s cost in their formularies?  That’s a question for which there may be more information about by next year.

The FDA just issued an important recall notice and safety alert for diabetics using Lifescan, Inc.’s One Touch blood glucose test strips. Lifescan is owned by Johnson & Johnson (NYSE:JNJ).

Although this information is unrelated to Pfizer’s Exubera inhaled insulin, this blog believes this recall notice is too important for our readers to miss. Why? According to the FDA:

The counterfeit test strips potentially could give incorrect blood glucose values–either too high or too low–which might result in a patient taking either too much or too little insulin and lead to serious injury or death.

Identifying the Counterfeit One Touch Blood Glucose Test Strips

Diabetics who use One Touch glucose strips need to check the lot numbers and packaging of their supplies. The FDA says that the ounterfeit test strips are:

• One Touch Basic®/Profile® (lot #272894A, 2619932, 2606340, and 2615211 (new)) test strips; and,
• One Touch Ultra® (lot #2691191 and 2691261 (new)) test strips.

According to the FDA, the following characteristics may help to identify the counterfeit test strips:

Counterfeit One Touch Basic/Profile Test Strips, lot numbers 272894A, 2619932, and 2606340

• The lot number 272894A, 2619932, or 2606340 appears on the outer carton and on the inner container (vial).
• The outer carton is written in multiple languages including English, Greek and Portuguese.
• The outer carton is labeled as 50-Count One Touch (Basic/Profile) Test Strip packages
• The bottom of the outer carton does not include an NDC number.

Counterfeit One Touch Basic/Profile Test Strips, lot number 2615211

• The lot number 2615211 appears on the outer carton and on the inner container (vial).
• The outer carton is written in English.
• The outer carton is labeled as 50-Count One Touch (Basic/Profile) Test Strip packages.
• A picture of a hand appears on the test strip displayed on the outer carton.
• The inner container is labeled as “plasma-calibrated”.

Counterfeit One Touch Ultra Test Strips, lot numbers 2691191 and 2691261

• The lot number 2691191 or 2691261 appears on the outer carton and on the inner container (vial).
• The outer carton and the inside container (vial) are written in both English and French.
• The outer carton is labeled as 50-Count One Touch Ultra Test Strip packages.
• The bottom of the outer carton does not include an NDC number.

You can get more information from Lifescan’s website here:

http://www.lifescan.com/company/about/press/counterfeit/

You can also:

1. Contact Lifescan at 1-800-227-8862 to speak to a representative
2. E-mail Lifescan at: CustomerService@lifescan.com,
3. Call the FDA’s MedWatch program; or
4. Call the FDA at: 1-800-FDA-1088

Remedies for Diabetics and Lost Opportunities for Lifescan

Will Lifescan replace any counterfeit One Touch blood sugar test strips with new ones? Nope. Here’s what the company had to say about that subject:

Please be aware that LifeScan will not issue credit for counterfeit products. For restitution, you will need to contact your original source of supply for these test strips.

While counterfeiting is a huge crime (think about all those bootlet DVDs, Gucci bags, and fake Viagra), this blog thinks that Lifescan is passing up a huge marketing opportunity to make a bad situation for diabetics better.

Lifescan makes money on the blood glucose strips. They pretty much give the meters away just so that diabetics can become dependent on One Touch strips.

Think about how much new revenue they could make by replacing counterfeit strips with legitimate ones, and then using that as a marketing vehicle to let diabetics know how they can purchase legitimate One Touch strips directly from the manufacturer and authorized dealers.

UBS AG (NYSE:UBS) Investment Research analyst Roopesh Patel is being reported by MarketWatch as having downgraded his stock rating of Exubera inhaled insulin maker Pfizer, Inc. (NYSE:PFE). In a research note, Patel said that UBS:

“believe[s] the risks to Pfizer’s long-term outlook has increased following recent setbacks on several fronts”

He cited Pfizer’s additional delays in its full scale launch of Exubera in the U.S. market.

Readers of this blog will remember that delay’s in Pfizer’s exubera launch have been noted here. Here is a brief look back at the history of those delays:

• July 11, 2006 - Pfizer’s Exubera web site had the diabetes drug’s launch date slated for mid-July.
• July 20, 2006 - Nektar and Pfizer announce the first Exubera inhaled insulin launch delay. Pfizer Vice Chairman Karen Katen explained that “education programs and manufacturing preparations are time-consuming,” and that the drugmaker was “taking the time necessary to do the job right.”
• July 21, 2006 - This blog examines the delay, and notes comments from a CreditSuisse analyst that 12-18 months would be required to teach doctors, diabetics, and diabetes educators about Exubera “safety and device management issues.”
• July 28, 2006 - This blog reported that “[o]ne supposedly anonymous Pfizer sales rep disclosed two (2) apparent big reasons behind the drug company’s 3-month delay for bringing Exubera inhaled insulin to market . Both reasons cited on the CafePharma message boards for drug company sales reps sounded like serious safety risks:
  

  Problem with high quality control failure in the inhaler and issues with 1 mg blisters.

• August 1, 2006 - Novo Nordisk A/S (NYSE:NVO) files a patent infringement lawsuit against Pfizer
• August 22, 2006 - Pfizer files and answer to Novo Nordisk’s lawsuit. Pfizer makes what sounds like a strong argument against the Danish drugmaker’s claim that it’s inhaled insulin patent (for a drug that Novo still has not yet received FDA approval) preceded Pfizer’s patent:
  

  Novo and its counsel see, without justification, to preserve indefinitely the inhaled insulin market for Novo.

• September 1, 2006 - Pfizer’s Exubera’s launch officially starts.
• September 22, 2006 - A respected health insurance reimbursement expert tells analysts, doctors, and health care professionals that he was shocked to find that insurance companies he worked with were given little, if any information, about Pfizer’s Exubera to bring before health insurance companies Pharamcy and Therapeutics Committees for to be considered for addition to drug formulary lists:
  

  “We in managed care did not receive any data on this product from the distributor, Pfizer, until maybe a few weeks ago which was detrimental. [Pfizer] missed a number of Pharmacy and Therapeutics Committees for it to even be considered.”

• September 26, 2006 - On the second day of a UBS Global Life Sciences Conference, Pfizer tells analysts and conference attendees that it’s counting on Exubera to be an “important source of revenue growth” for the company.
• October 22, 2006 - Pfizer announces that it’s delaying its full-scale rollout of Exubera until early 2007 for general practitioners.

Source for UBS analyst’s comments: MarketWatch

For the second time in the last four months, Pfizer, Inc. (NYSE:PFE) announced that it was postponig it’s big rollout of Exubera, the first FDA-approved inhaled insulin that it developed with inhalation drug delivery company Nektar Therapeutics (NASDAQ:NKTR).

Once again, this news raises the same questions about Exubera’s known and suspected safety risks.  Who’s concerned about Exubera’s safety for diabetics? Take a look:

Exubea Concerns Raised By Doctors: Endocrinologists and Pulmonologists
This blog recently reported the serious Exubera safety concerns of a pulmonologist at the Cleveland Clinic. Dr. James K. Stoller, who is also a member of the FDA’s Endocrinology and Metabolism Advisory Committee, remains worried about the likelihood that “patients with undiagnosed [Chronic Osbstrucive Pulmonary Disorder] COPD, asthma, interstitial lung disease, or lung cancer” will use Exubera.

Stoller is concerned that clincial trials of Exubera were conducted “on studies of relatively few patients with COPD followed for up to 1 year.”
Stoller is worried that since “only a minority of the estimated 16 million Americans with COPD are aware of their diagnosis,” there may be a sizable population of diabetics who don’t even know they have pulmonary problems.   Those who aren’t aware of their pulmonary problems and want to use Pfizer and Nektar’s inhaled insulin will likely be exposing themselves to serious potential drug safety risks.

More concerns about Exubera were shared by N.Y.C. endocrinologist Dr. Jermore Tolbert, an endocrinologist at Cabrini Medical Center  in Manhattan. Tolbert shared his concerns at the Oppenheimer Diabetes Conference in Manhattan at the end of September:

Tolbet said explained the reason it took so long for Pfizer and Nektar to get FDA approval for Exubera is because of concerns over the drug’s safety.  He indicated that doctors should not rush to prescribe the inhaled insulin, noting that the “FDA feels it is a safe drug, but we still have to be careful with this medication.”

Tolbert said he did not view Exubera as an insulin for most diabetics. Instead, he believes that “[t]here is a niche for this drug. I will use it, but it will be on selected patients until I feel very, very comfortable about it.”
A Boston endocrinologist has decided to take a wait-and-see approach before prescribing Pfizer’s new Exubera inhaled insulin: “I would like to see people using it for five or 10 years before I give it to my patients,” said Dr. Anastassios Pittas , a diabetes specialist at Tufts-New England Medical Center in Boston, told The Boston Globe in July.
Dr. John Buse, the Vice-President of the American Diabetes Assocation and director of the diabetes center at the University of North Carolina School of Medicine also expressed caution over Exubera’s known and suspected pulmonary risks.

Given the potential pulmonary risks found in Exubera clinical trials, Dr. Buse stressed that, “[p]atient and doctor will have to weigh very carefully what the benefit and the risk really is.”

Diabetics Also Have Concerns About Exubera Inahled Insulin Safety

A real quandary for Pfizer and Nektar will be addressing the real concerns that some diabetics  have over Exubera’s safety.

Real insiight comes from a BusinessWeek magazine interview with a 57-year-old insulin-dependent Type 1 diabetic, Janet Ruhl:

She thinks Exubera will be hard to use and could cause lung damage. “It looks like a terrible idea,” Ruhl says.

Ruhl’s take on Exubera suggests that it’s not needles that diabetics worry about.  They appear far more concerned about the drug’s known and suspected safety risks, given the lack of seriously long-term safety data on the new drug. 

As Forbes recently highligted, although new diabetes drugs are being approved by the FDA, diabetics and their pharmaceutical companies could be in for a rude awakening if products like Exubera inhaled insulin don’t deliver on the their “promised safety advantages,” and instead deliver Vioxx-like results.
It’s a good idea that the spoke with an insulin-dependent diabetic. Part of Pfizer’s marketing campaign has been to try and scare folks into thinking that diabeti