Overview

Pfizer and Inhale/Nektar's Exubera, the first FDA and EMA approved inhaled insulin product, won the Wall Street Journal's Biomedical Innovation of the year award in 2006 – it was front page news all over the world and patients loved it. The technology and idea for Exubera originated in a company Inhale (now Nektar) co-founded by John Patton, the Founder of Dance Pharmaceuticals who is considered to be the father of inhaled insulin.

The safety, efficacy and strong patient preference for inhaled insulin over injections (see Figures 2-4) were established over the last 20 years in a series of rigorous development efforts by multiple large pharma and small technology company alliances (total >$6.5B invested). Pfizer with its originator partner Inhale Therapeutic Systems, led the effort from the beginning and succeeded in getting to the market first in both the US and Europe with Exubera in 2006. However high costs, product format and marketing issues led Pfizer to abandon the product and take a $2.8B tax write off after the product had been available on the market for only about 1 year. The two insulin powerhouse followers, Lilly and Novo Nordisk, who were several years behind Pfizer, quickly abandoned their large programs. They no longer had to counter inhaled insulin eroding their collective monopoly of the established and lucrative injected insulin business.

Post Prandial Glucose: EXUBERA® Equivalent or Better Than SC Soluble Insulin

Figure 3: Data from published studies. There is significant evidence that greater post prandial glucose control is associated with decreased levels of diabetic complications. http://clinical.diabetesjournals.org/content/20/2/71.full

Fasting Plasma Glucose: EXUBERA® Consistently Lower Than SC Insulin

Figure 4: Data from published studies

The idea of inhaled insulin remains medically sound and compelling. Inhaled insulin technology works well and only needs expert refinement. Dance and its team understand in detail the reasons why the large inhaled insulin effort collapsed. They believe that all of the issues are addressable or have already been addressed.

Markets—Size and Growth Rate

The global market for therapeutic and diagnostic products for diabetes is valued at $38 billion in 2010. This market is expected to grow at a compound annual growth rate (CAGR) of 6.1% to reach $51.2 billion in 2015. Insulin products, including administration devices, are worth an estimated $16.4 billion in 2010. This sector is expected to reach $22 billion in 2015, a 6.1% compound annual growth rate (CAGR). http://www.bharatbook.com/detail.asp?id=144947&rt=Diabetes-Therapies-Diagnostics-Global-Markets.html

Diabetics can be stratified into a number of target markets depending on the type, severity and duration of their disease. Dance's initial target market for its first inhaler products will be patients who are insulin dependent. For example, in 2007 the US insulin dependent population was ~4.8 million (27% of the total) (see Figure 5). Our second target market will be those patients who are failing oral medications and need to be on insulin. In 2007 there were ~3.6 million patients in this group in the US (20% of the total). Finally our long term goal is to have a 2nd inhaler product line for a third target market, those first diagnosed with type 2 diabetes. These patients today, with current medical practice, would be 10 years away from initiating insulin therapy even though insulin would be the best therapy for them. In 2007 there were ~6.6 million of these patients in the US alone.

US 2007 Diabetes Patient Numbers

Figure 5: ADA National Diabetes Fact Sheet (2007); Intl Diabetes Federation (2005); WHO 2004
http://www.cdc.gov/diabetes/pubs/pdf/ndfs_2007.pdf

An example of a conservative inhaled insulin global market forecast. Take into consideration the following assumptions. Starting with a WW diabetic population today of ~280 million, we expect that more than 100 million patients will be accessible and receiving regular healthcare. As mentioned above our initial target populations will be those failings orals or on insulin (~47% of the 100 million). Of these ~30% will be excluded because they are smokers in which there are no clinical safety or efficacy studies. Later targeting will be expanded to include all non-smoking diabetics except those at the earliest stage of diet and exercise therapy. Assuming a 3% annual growth rate, a penetration of 10% of the target market, an average wholesale price (AWP) of US $3/day/patient and a time to peak of 8 years, yields a market of ~$8B in 8 years. This is for < 2% of the global diabetes patients.

Technology

Dance has carefully selected the patented technologies and know-how that will enable it to make superior products and be tough to beat on cost. In addition, as in the development of all drug delivery products, new IP is being filed and licensed as we develop our products. Dance intends to follow its initial products with 2nd and 3rd generation products with new and improved features.

Safety of Pulmonary Delivery and Inhaled Insulin

There are more than 75 inhaled medicines on the market containing ~ 40 different drugs. Although most of the products are intended for treatment of chronic lung diseases such as asthma, COPD, cystic fibrosis and other lung diseases, most all inhaled medicines are absorbed into the blood stream and body with high efficiency. Inhaled medicines have had a remarkable safety record for more than 50 years. The tennis court sized surface area of the lungs, enables inhaled aerosol medicines to be spread over a very large area at low concentrations where a variety of natural cellular mechanisms enable efficient systemic absorption and/or clearance and metabolism of the drugs.

Inhaled insulin was first tested in humans in the 1920s and found to be efficacious. It was not developed then because of the low efficiency of lung delivery. Today, inhaled insulin has been studied by a variety of large and small pharmaceutical companies in ~10,000 patients, some for more than 8 years of chronic use, and found to be safe and effective. The safety package submitted to the FDA and EMA by Pfizer for Exubera was one of the most thorough and comprehensive that the agencies had seen.