Novo-Nordisk and Pfizer reportedly settled their patent litigation this week over Pfizer’s failed Exubera inhaled insulin and Novo’s AERx insulin that the Danish drugmaker has been developing with Aradigm Corp.

The litigation started just before Pfizer brought Exubera to market (after considerable delays), and continued for just over a year.

Novo claimed that Exubera infringed on a host of patents that it had for inhaled insulin. In its answer to the lawsuit, Pfizer stressed that the real reason behind Novo’s suit was “to preserve indefinitely the inhaled insulin market for Novo.”

Although the settlement agreement was reported late Monday, terms of the deal were not made public.

Pfizer announced that it was pulling Exubera from the market on October 18, 2007. Given that Pfizer originally paid Sanofi-Aventis $1.3 billion to acquire exclusive worldwide rights to market the first FDA-approved inhaled diabetes drug, yet only generated $4 million in Exubera sales for Q2 2007, it is no surprise that the drugmaker opted to stop spending money on lawyers fees when it no longer had a product to justify the litigation expense.

After scoring a $1.3 billion deal selling Pfizer all of its rights to market Exubera inhaled insulin, Sanofi-Aventis probably laughed all the way to the bank when Pfizer pulled the ridiculously unprofitable diabetes drug from the market.

That’s why Sanofi’s latest ad campaign for injectable insulin has a timely “I told you so” quality to it. Some of that deal money appears to be well spent on these direct-to-consumer (DTC) pieces.

Sanofi’s Go Insulin campaign is a push for the French drugmaker’s injectable basal insulin Lantus. Although not the subject of this ad campaign, the pharmaceutical companies new FDA-approved Apidra fast-acting insulin may also get a boost from this ad series.

Two Type-2 diabetics tell their stories though video about how using injectable insulin has helped them control their diabetes using recommended Hemoglobin A1C targets as guidelines.

Greg, a 45-year-old delicatessen and real estate owner in Virginia describes how his initial treatment taking pills after being diagnosed with diabetes was not effectively helping him cope with the disease. He’s a husband and father with an attitude that shows he tries to tackle things.
Loretha Huff, a Chicago resident, describes how she dealt with managing her diabetes when she was diagnozed at age 35. Taking pills to manage her blood sugar was not effective, so she worked with her doctor to switch to Lantus injectable insulin.

She says that “injecting yourself wasn’t as bad as I thought it was going to be,” and expalins how her Hemoglobin A1C’s have come under better control. With a positive can-do attitude, Loretha’s story seems likely to strike a chord with folks who have concerns about taking insulin injections and eating right. Loretha’s positive, up-beat approach to managing her diabetes seems likely to help Sanofi with its sales of Lantus.

Significantly, Sanofi created special areas on it’s Go Insulin web site focusing on:

• The Importance of Insulin
• Insulin Myths and Realities

These explainer pieces argue that taking insulin doesn’t mean that you’ve failed at treating your diabetes, and that it’s just what you might need to do to control your Hemoglobin A1C levels.

It’s official: Pfizer’s Exubera inhaled insulin experiment is over.

Sales of the diabetes drug were a complete failure. Some might even think of them as non-existent, considering that Pfizer paid Sanofi-Aventis $1.3 billion to acquire exclusive worldwide rights to market the insulin, yet only generated $4 million in sales for Q2 2007.  The company’s website for the drug acknowledged that “too few patients are taking Exubera.”

Pfizer CEO Jeffrey Kindler told shareholders in an October 18, 2007 company press release that, “[d]espite our best efforts, Exubera has failed to gain the acceptance of patients and physicians. We have therefore concluded that further investment in this product is unwarranted.”

It cost Pfizer a whopping $2.8 billion in pre-tax charges to stop Exubera sales, according to an SEC filing that the company made.

According to Pfizer CFO Frank D’Amelio, the drugmaker had approximately $661 million of Exubera inventory.  That’s a staggering amount of unsold insulin.

Although Pfizer’s website for Exubera emphasized that the company’s decision to stop selling the diabetes drug “was not based on any safety problems with Exubera” and that it remains “a safe and effective medicine,” that conclusion remains subject to debate among some endocrinologists and diabetics.

Dr Ahmed El Hakim, the Senior Manager of Pfizer’s (NYSE:PFE) Middle East Arab Group, recently defended the drug company’s lackluster worldwide Exubera inhaled insulin sales.

Downplaying the diabetes drug’s widely known poor worldwide launch, El Hakim explained to ArabianBusiness.com that “this is the price you pay as an innovator - the concept [of using inhaled insulin] has not yet been established, and while we are now establishing the concept of using this convenient therapy, sales have not been up to the expectations of many people.”

A study published in the World Health Organization’s journal, the Eastern Mediterranean Health Journal, concluded that diabetes was a growing problem in Saudi Arabia, citing the following factors:

• A high prevalence of obesity;
• A diet rich in carbohydrates (e.g., bread, dates, sugar, and potatoes);
• Lack of exercise; and
• Genetic factors

At the time the study was reported in 1998, it found that there was more than a 300% increase in Type 2 diabetics older than 30 in Central Saudi Arabia, from 6% in 1982 to more than 18.22% in 1998.  Pfizer’s El Hakim told a reporter that the country’s now approximately 25% of Saudis are diabetics.
That’s a huge potential market for the pharmaceutical company’s diabetes and cardiovascular drugs.

According to Michael Krensavage, a pharmaceutical equity analyst at Raymond James Financial, Inc. (NYSE:RJF), the launch of Exubera inhaled insulin for diabetics “has been one of the most spectular flops in the pharmaceutical industry.”

Krensavage made this analysis when interviewed about Pfizer, Inc.’s (NYSE:PFE) difficulty in launching and maintaining profitable new drugs in a highly competitive market.  “No matter how you look at it,” Krensavage concluded, Pfizer’s drug research and development efforts have yielded “a disappointing pipeline.”
Pfizer’s 8K report to shareholders disclosed Exubera’s continued market failure. “Sales of Exubera continue to be disappointing, with $4 million of worldwide revenues in the second quarter of 2007.”
Generating only $4 million in revenue on a diabetes drug for which Pfizer paid Sanofi-Aventis $1.3 billion in January 2006 is an abysmal failure, there may still be a silver-lining for diabetics.

By sticking to proven diabetes medications that do not have unknown pulmonary and related risks for diabetics that are the subject of long-term FDA-mandated drug safety studies (as a condition of the drug’s approval), endocrinologists appear likely to give their patients trusted choices for managing their care.

Even given reported the Avandia heart attack risks for Type 2 diabetics, Pfizer doesn’t seem to have convinced endocrinologists that Exubera is a better diabetes drug.