Washington Editor

Based on poor prospects for profits, Novo Nordisk AS is terminating development of its inhaled insulin product AERx iDMS and cutting hundreds of jobs at its Hayward, Calif. site.

The Bagsvaerd, Denmark-based firm licensed the rights for AERx iDMS from Hayward, Calif.-based Aradigm Corp., which has partnered with the Danish pharmaceutical firm on the inhaled insulin product since 1998, Aradigm CEO Igor Gonda told BioWorld Today.

News of Novo Nordisk's decision sent shares of Aradigm (OTC BB:ARDM) down 7 percent Tuesday, or 11 cents, to close at $1.45. Shares of Novo Nordisk (NYSE:NVO) dipped 5.4 percent, or $3.57, to close at $62.03.

AERx iDMS, an electronic pulmonary delivery system for administering fast-acting human insulin by inhalation, was being tested in nine Phase III clinical trials involving more than 3,000 patients, Gonda noted.

Novo Nordisk said patients in those studies will be switched to other insulin therapies recommended by their physicians.

Mads Krogsgaard Thomsen, chief science officer at Novo Nordisk, said his firm's decision to discontinue further development of AERx iDMS was based on an analysis of "a vast amount of information" which included recent market research involving patients and physicians who used or prescribed Pfizer Inc.'s inhaled insulin product Exubera.

New York-based Pfizer in October decided to discontinue marketing Exubera after the product, which was expected to be a blockbuster when first approved in 2006, proved to be unprofitable. (See BioWorld Today, Oct. 19, 2007.)

"We've come to the conclusion that a breakthrough in inhaled insulin takes more than AERx can offer," Krogsgaard Thomsen said Tuesday in a conference call.

He emphasized that Novo Nordisk's decision to halt development of AERx iDMS was not due to safety concerns and that Phase III testing has revealed no safety problems.

After a thorough review of the medical rationale for inhaled insulin and the competitiveness of the AERx iDMS system compared with insulin injection devices, such as Novo Nordisk's Flexpen, the firm concluded that "fast-acting inhaled insulin in the form it is known today is unlikely to offer significant clinical or convenience benefits over injections of modern insulin with pen devices," Krogsgaard Thomsen said.

Most patients with Type II diabetes who start insulin therapy use long-acting insulin products, he noted.

"Experience shows that they want very simple, very convenient devices for administering their insulin," Krogsgaard Thomsen declared.

The crux of the argument currently for fast-acting inhalational products, Gonda said in an interview, lies in a patient's willingness to convert from an injection product to an inhalational product.

He noted that current inhalational insulin products generally are administered at meal time, which makes their therapy regimen more complicated than a long-acting injectable insulin product that can be administered once a day.

Novo Nordisk, Krogsgaard Thomsen said, has decided to focus its research on inhalation systems for long-acting formulations of insulin and analogue insulins, such as those based on glucagon-like peptide-1 (GLP-1).

While the firm will keep about 50 scientists employed at its Hayward site to work on the GLP-1 and long-acting inhalational insulin programs, the company is laying off about 300 employees at that location, he said.

Gonda said it currently is unclear what role his firm would play in Novo Nordisk's new development program. Aradigm, he said, must first consider what is best for its investors and long-term plans for its development pipeline before entering into any negotiations with Novo Nordisk. "As Novo Nordisk mentioned in their conference call, they'll have to negotiate a return of the rights back to us," Gonda said. "So we'll look at it carefully, what would make more sense for us."

He noted that Aradigm was advised only "shortly before" Novo Nordisk issued a press release late Monday about its intentions to halt its development program for AERx iDMS.

"We weren't expecting it," Gonda said.

He stressed that while Aradigm pioneered the AERx iDMS insulin system, the company's main focus is developing products for severe respiratory diseases, such as cystic fibrosis, chronic obstructive pulmonary disease and pulmonary arterial hypertension.

The firm also is investigating an AERx-based liposomal ciprofloxacin product to treat and prevent inhalational anthrax.

In addition, Aradigm is examining its technology for use in smoking cessation therapy.