Novo sees dimmed prospects for inhaled insulin

By Lewis Krauskopf and Sam Cage

NEW YORK (Reuters) - Novo Nordisk A/S (NOVOb.CO: Quote, Profile, Research, Stock Buzz) sees a limited market for inhaled insulin, but the company is forging ahead with its experimental product to ensure it can offer a complete package of diabetes medicines, a top executive said on Thursday.

Market expectations for inhaled insulin have dimmed substantially amid meager use of the first such product, Exubera, which prompted Pfizer Inc (PFE.N: Quote, Profile, Research, Stock Buzz) to pull out of its partnership to sell the drug with biotechnology company Nektar Therapeutics (NKTR.O: Quote, Profile, Research, Stock Buzz).

The promise of inhaled treatment is that needle-wary diabetics can avoid jabs, but Novo Chief Financial Officer Jesper Brandgaard said the inhaled market was challenging.

"There are a significant number of patients who really fear the fact that they have to inject themselves," he said at the Reuters Health Summit in New York. "The patients we've had in clinical trials and also the anecdotal stories we've heard from Exubera patients, is that patients like it ... They feel it's a convenient way to get their insulin."

But Brandgaard added, "What I think is clear to us now is that, following the withdrawal of Exubera, it's probably likely that it's going to be a more narrow segment of the market who will use this product and will probably not be the prime insulin initiation."

The market potential for inhaled insulin is "significantly lower" than expectations in recent years, he said, but inhaled insulin still is part of the "home turf" of Novo, a diabetes specialist.

"For Novo Nordisk to abandon our efforts of being able to provide protein-based treatment in an easy way for patients, that would be wrong," Brandgaard said.

"We've got to have a response if a pulmonary market develops. And secondly we believe that having pulmonary technology, in addition to all our delivery devices, I think that is a skill that we ought to have."

Exubera was initially seen as a sure-fire blockbuster, but its use was limited in part because of the bulkiness of the canister device used to deliver the drug.

"The first-generation product, in terms of Exubera, was rather cumbersome to administer," Brandgaard said. "So if you can make a easy and safe product then it could be a way to overcome people starting insulin earlier."

Brandgaard said Novo's inhaled insulin is on track to hit the market in 2010 or 2011, putting it about one year behind a rival product under development by Eli Lilly & Co (LLY.N: Quote, Profile, Research, Stock Buzz) and Alkermes Inc (ALKS.O: Quote, Profile, Research, Stock Buzz).

Reimbursement for inhaled insulin also poses a challenge, particularly in Europe, Brandgaard said. "I think it will be challenging to overcome that reimbursement barrier," he said.

(Editing by Braden Reddall)

(For summit blog: summitnotebook.reuters.com/)