Nektar Therapeutics (NASDAQ:NKTR), a co-developer of Exubera inhaled insulin, announced its financial results 2006 and Q4.

The pulmonary drug delivery company announced that “[r]evenue for 2006 related to Exubera (insulin human [rDNA origin]) Inhalation Powder was $110.2 million.”

For the 2006 calendar year, Nektar reported a “net loss of $154.8 million or $(1.72) per share” under Generally Accepted Accounting Principles (’GAAP’) and a non-GAAP net loss of $92.3 million.

What’s not included in these figures? According to Nektar, the non-GAAP net loss for 2006 excludes:

• $17.3 million of SFAS 123R stock-based compensation charges
• A $17.7 million charge for a litigation settlement with the University of Alabama Huntsville over an Exubera-related patent dispute;
• $5.5 million for impairment of long lived assets, and
• $21.9 million in severance and restructuring charges

Exubera may be generating some revenue for Nektar, but it doesn’t currently appear to be doing the same for Pfizer. According to a number of recent reports, Exubera sales have not been generating signficant revenue for Pfizer.

A new piece in this week’s Brandweek Magazine has an extensive analysis of Pfizer’s failure to successfully launch Exubera inhaled insulin.

The fascinating article by reporter Jim Edwards looks at Pfizer’s marketing of the inhaled insulin developed with Nektar Therapeutics (NASDAQ:NKTR) and sanofi-aventis (NYSE:SNY).  Last year Pfizer paid sanofi more than $1.3 billion for exclusive worlwide rights to sell the insulin.
His conclusion? That Exubera’s bong-like appearance is hurting, not helping sales of the drug:

What Pfizer got for its cash was a device that looks a lot like a marijuana bong—and a brand that analysts, doctors, drug sales reps and some patients believe is a struggle to sell because it is so inconvenient to use.

David Kliff, the editor and publisher of Diabetic Investor, told Edwards that he thought “Pfizer is on drugs” if it still thought that it could get $2B a year in Exubera sales.

More Poor Exubera Sales Numbers Reported

To add to this blog’s report last week on a tally of poor Exubera drug sales in January, Edwards reports in his Brandweek article that Merrill Lynch is claiming a total of only 1,111 perscriptions have been written for Exubera.

Missing From The Article: Discussion of Known Exubera Safety Risks, Physician Concerns

Interestingly, no mention was made of concerns by physicians and diabetics’ worries over Exubera’s still unclear long-term safety. Nor was any mention made of the FDA’s effective conditional approval of the insulin — requiring that a battery of long-term Exubera safety tests be conducted over the coming decade on diabetics using the drug.

In what appears to be the longest inhaled insulin trial to date, a Scottish hospital is currently recruiting Type 2 diabetics for a two-year study of inhaled insulin.

The Edinburgh Evening News reports that the study at the Edinburgh Royal Infirmary teaching hospital is seeking Type 2’s for the study.

Scotland Currently Rejected Inhaled Insulin For Nat’l Health Service Drug Formulary List

A Scottish drug forumlary committee listed inhaled insulin in an October-November 2006 report on new drugs that included inhaled insulin.  Evaluations by both the Scottish Medical Consortium (’SMC’) and the Lothian Recommendation and Forumarly Committee (from Scotland’s National Health Service) concluded, at that time, that inhaled insulin was not recommended for use by diabetics.

Only 8 Diabetics Currently Enrolled in the Drug Trial

Very few diabetics are currently enrolled in the trial.  At present there are only eight (8): four who are using inhaled insulin, and four taking subcutaneous insulin injections.
‘Needle Phobia’ Emphasized

It appears that a big push is being made by the head of the Scottish study to emphasize ‘needle phobia’ as a reason for enrolling in the study. The Infirmary’s Dr. Nicola Zammitt believes that “inhaled insulin could represent a major breakthrough in the treatment of diabetes for those with bad needle phobias.”

This has been a major emphasis by pharmaceutical companies like Pfizer when trying to get regulatory approval for inhaled insulin, and seems a likely component of any future Exubera Direct to Consumer (’DTC’) marketing and advertising campaigns.

Unclear Which Drugmaker is Conducted the Inhaled Insulin Trial

It is currently unclear exactly which pharmaceutical company is participating in the Scottish inhaled insulin trial.  It could be Pfizer, Inc.’s Exubera, Novo-Nordisk’s AERx inhaler, Mannkind’s Technosphere inhaled insulin, or AIR inhaled insulin which is being jointly developed by Alkermes & Eli Lilly & Co.

Despite interest by readers of this blog in whether inhaled insulin is available in Canada, it appears that Pfizer, Inc. (NYSE:PFE) still hasn’t obtained approval to market the diabetes drug in the country.

This blog noted last summer the apparent condundrum in having Canadian pharmacies market Exubera to American diabetics across the border when Health Canada “drug regulators haven’t even approved the new inhaled insulin.”

That’s still the case today. Even though Pfizer is allowed to use Exubera in NIH-approved clinical studies in the U.S., roughly have of Canada’s provinces (Ontario, Quebec, Manitoba, Newfoundland and Labrador), and Mexico. (See, NIH Clinical Trial: Demonstrate Exubera Works As Well As Avandia When Added to Sulfonylurea+ Metformin When Controlling Glucose, Clinical Trial No. NCT00150410)

A new ad campaign will be launched by Pfizer, Inc. (NYSE:PFE) aiming to convince diabetics that they should try the drugmaker’s Exubera inhaled insulin.

According to a Bloomberg News report by Shannon Pettypiece, Pfizer hopes to launch its direct-to-consumer (’DTC’) Exubera television ad campaign “in the second half of 2007.”
But Pettypiece warns that:

Pfizer is risking criticism by members of Congress and physician groups who say consumer advertising encourages excessive use of costly therapies.

A related concern is whether the TV ads will gloss-over, or not even mention, the concerns that a number of physicians have about the inhaled insulin’s long-term safety for diabetics using the drug. The FDA is apparently so concerned about Exubera’s long-term safety and potential pulmonary risks that the drug agency effectively conditioned approval of the drug in January of 2006, requiring Pfizer to conduct a wide variety of safety studies over the next decade on diabetics in general, in addition to diabetic children and smokers.

Drug formulary coverage for Exubera is another issue.  The insulin costs diabetics a premium over regular injectable insulin. That’s because many insurer’s don’t see a benefit to subsidizing coverage of a more expensive insulin that has yet proven itself to more effective over the long-term for diabetics.

According to Pettypoint:

Wellpoint Inc., the nation’s second- largest health insurer, charges customers more for Exubera than other insulin products because “no meaningful clinical studies are available to demonstrate that its use will result in earlier treatment, improved compliance, improved quality of life, or better long-term outcomes,” says spokesman Jim Gavin.

According to data from Wolters Kluwer Health, only about 900 prescriptions were written for Exubera by physicians each week in January of 2007.
That’s not a lot of positive cash flow for drug that took a while to develop, and cost Pfizer $1.3 billion in a deal last year with sanofi-aventis.  That deal enabled Pfizer to buy intellectual property and licensing rights from the French drugmaker that gives it exlusive worldwide rights to market the insulin.