Editor

The decision last week by Novo Nordisk AS to drop its Phase III inhaled-insulin program mildly stung licensor Aradigm Corp., putting observers in mind of Pfizer Inc.'s dump of Exubera in October - a surprise maneuver that dented shares of partner Nektar Therapeutics Inc. - and leaving investors with chips on other, similar efforts waiting to exhale. Stay in or get out?

Novo, terminating hundreds of employees at its Hayward, Calif., plant, blamed a less-than-ideal profit outlook for the move to end all nine Phase III trials in more than 3,000 patients getting insulin by way of AERx iDMS, Aradigm's electronic pulmonary system. The deal between the two companies had been in place since 1998.

Mads Krogsgaard Thomsen, chief science officer at Novo, said in a conference call that the Danish firm concluded "a breakthrough in inhaled insulin takes more than AERx can offer," though no safety problems had arisen in trials. Novo already sells the Flexpen, an insulin-injecting device, and Thomsen said Aradigm's approach is "unlikely to offer significant clinical or convenience benefits" over it.

Russell McAllister, analyst with Merriman Curhan Ford, kept his "buy" rating on Aradigm, noting that the firm's diversified pipeline reduced the hit taken by Novo's action. Other events make Aradigm's future bright, including ARD-1500, the AERx formulation of Remodulin (treprostinil), United Therapeutics Corp.'s therapy for pulmonary arterial hypertension. Aradigm and UTC entered their deal last fall. Also in the Aradigm hopper: ARD-3100, liposomal ciprofloxacin for cystic fibrosis, and ARD-1100 for inhalation anthrax. (See BioWorld Financial Watch, Sept. 10, 2007.)

A year ago, Aradigm underwent what the company called "almost a rebirth," after cutbacks in 2006, including asset sales, and the delisting of the company's stock. In January 2007, Aradigm raised gross proceeds of $31.35 million through the sale of 33 million shares at 95 cents each, and vowed to continue the transformation from drug delivery to specialty pharma. Last week, shares were trading at around $1.50.

Novo, for its part, now plans to direct research toward inhalation systems for long-acting formulations of insulin and analogue insulins, such as those based on glucagon-like peptide-1.

Along with Novo's Flexpen, Eli Lilly & Co. has the Humalog insulin pen, and Amylin Pharmaceuticals Inc. last fall won FDA clearance for its SymlinPen 120 injection, pre-filled pen-injector devices that feature fixed dosing to improve mealtime glucose control, though the agency issued a non-approvable letter for Symlin use with basal insulin in patients with Type II diabetes. Symlin (pramlintide acetate), an amylin mimetic, is approved for Type I and Type II diabetes patients who use mealtime insulin.

Stephen Dunn, analyst with Dawson James, told BioWorld Financial Watch that injectable insulin is a mature market, with little further growth likely, putting added pressure on the prospects for an inhaled version - which might find success, if the right (i.e., smallest, most convenient) gizmo can be devised.

Enter Nektar, and Exubera. Cleared by the FDA in 2006, Exubera was hailed as a likely blockbuster, proving a clean, convenient, inconspicuous new way for diabetics to get their insulin without the needle prick. But Exubera stumbled on manufacturing problems and patients proved slow to accept th/e device.

Shortly after Nektar learned - by way of a press release - that Pfizer was backing away from Exubera, Tim Warner, vice president of investor relations and corporate affairs, tersely blamed the product's failure entirely on pharma giant.

Pfizer, with its drying pipeline, has separate woes, feeling the squeeze from generics as it lost patent protection for such revenue generators as Norvasc for high blood pressure, along with the antibiotic Zithromax, and the antidepressant Zoloft. Profits dropped 77 percent in the third quarter, and Pfizer cut staffing by about 10 percent near the start of the year. Ahead, the firm will lose market shelter for the allergy drug Zyrtec and, in the next few years, the key anti-cholesterol therapy Lipitor (atorvastatin), the largest-selling drug in the world.

Warner sounded more conciliatory toward Pfizer a month after the Exubera news broke, when the former Exubera partner agreed to pay $135 million, resolving all contractual matters related to inhaled insulin, and agreed to help with the transfer of remaining rights and benefits to a new partner.

But that partner has yet to be found. Meanwhile, the next-generation device after Exubera undergoes early tests. It's much smaller and can be concealed in the hand. Warner called it "superior to all other devices that in development for so-called second-generation inhaled insulin." Other pharma biggies are in the game, including Lilly, with a Phase III product.

MannKind Corp., like Lilly, has reached Phase III, and both would have beaten Novo to market, with Exubera having paved the way. The lead product for MannKind, called the Technosphere Insulin System (TIS), amounts to a dry powder delivered by the firm's MedTone inhaler. TIS could have an edge over the rest of the pack since it approximates the natural first-phase insulin release spike and might thereby offer better glycemic control.

Phase III data from the MannKind program should start flowing in the second quarter of this year, with a new drug application filing by the end of 2008, though analyst William Tanner with Leerink Swann cautioned in a research report that "a large pharma partnership remains the critical catalyst" in order for MannKind to prove the need for inhaled insulin.

Another, much earlier-stage, inhaled-insulin player making news with an initial public offering last fall was MAP Pharmaceuticals Inc., which raised $60 million to fund the Phase III trial with aerosolized products for asthma and migraine. The company's UDB (unit dose budesonide) is a nebulized version of the corticosteroid for pediatric asthma patients. MAP0004, an inhaled version of dihydroergotamine, aims at providing quicker and more convenient pain relief over the oral triptans or intravenous DHE in migraine patients.

Tagged MAP0001, MAP's inhaled insulin deploys supercritical fluid technology that yields a stable insulin particle 10 percent to 20 percent of the size of the marketed products, the company said, thus penetrating the lungs deeply, with less drug ending up in the back of the mouth and throat. A Phase Ia trial in Australia showed MAP0001 was biologically active and reached maximum therapeutic blood levels as quickly as Novorapid, the subcutaneously injected insulin from ZymoGenetics Inc.