After the January approval of the first inhaled insulin product in the U.S., Alkermes Inc. and others have forged ahead with their own programs in hopes of gaining a share of a multi-billion-dollar diabetes market.

Now Cambridge, Mass.-based Alkermes appears to be positioned to bring to market the second inhaled insulin product, its AIR Inhaled Insulin System (AIR system). It has started an additional Phase III registrational study in Type II diabetes patients that will compare A1C - an average measure of glucose over a three-month period - between the AIR system and injectable pre-meal insulin.

Alkermes began its Phase III pivotal program last July.

"I'm expecting approval in calendar year 2009, and I think that's a conservative estimate," said Adnan Butt, an analyst with ThinkEquity Partners LLC in New York. "Clearly, it's going to be a blockbuster product. If you look at sales of injectable insulin, it's in the $3 billion-plus range."

The FDA granted marketing approval for the first inhaled insulin therapy, Exubera, in January, following an advisory committee's recommendation. Marketed by Pfizer Inc., of New York, it was developed in collaboration with Nektar Therapeutics Inc., of San Carlos, Calif. Analysts have speculated that sales could exceed $2 billion five years after launch and eventually cannibalize day-to-day injectable insulin. (See BioWorld Today, Sept. 12, 2005, and Jan. 30, 2006.)

"It hasn't been launched yet," Butt told BioWorld Today. "In fact, that might end up being a good thing for Alkermes because [Pfizer] might end up preparing the market, educating the entire market" on inhaled insulin products. Pfizer expects a launch in the middle part of this year, "and Alkermes isn't that far behind their launch," he added. "It will be a lighter burden for them."

He estimates the AIR system is "easily a $1.5 billion product" in terms of peak revenue potential.

The new Phase III study is the third pivotal trial begun by Lilly and Alkermes. A Phase III safety study in 400 patients with Type I diabetes began in July, while a one-year safety study in 600 patients with Type I and Type II diabetes who have chronic obstructive lung disease and asthma began in August.

The trial, which started this week, is an open-label, non-inferiority study designed to enroll about 400 insulin-na ve patients with Type II diabetes who are taking at least one oral antidiabetic medication. The patients will be randomized to one of the two treatment groups, and the efficacy of the AIR system will be assessed for six months. The safety of it will be followed during an additional six- and 18-month period.

Alkermes and Lilly began collaborating on the program in 2001. Lilly is responsible for funding all clinical development, regulatory filings and marketing, while Alkermes is entitled to milestones and royalties.

The AIR system delivers insulin based on Alkermes' AIR pulmonary drug delivery technology. Its main advantage over competitor products is that it uses a small inhaler that can fit into the palm of a hand, Alkermes said.

"It's something you can easily put in your handbag if you're a woman or in your jacket pocket," Butt said. "The Exubera device, at this time, is much bigger," but Pfizer and Nektar could have a smaller version available in the future.

Diabetes affects an estimated 194 million adults worldwide, or 20.8 million in the U.S., and about 90 percent to 95 percent of them have Type II diabetes. About two-thirds of patients on therapies are not achieving treatment goals for controlling blood sugar. Injectable insulin has been used for more than 80 years to control glucose levels, but most patients would rather inhale their therapy with products like Exubera and the AIR system than stick themselves with needles.

"It basically makes treatment more convenient for them," Butt said.

MannKind Corp., of Valencia, Calif., also is developing an inhaled insulin product, Technosphere Insulin. The company started two Phase III studies in March, and is aiming to file for FDA approval by the end of 2008. (See BioWorld Today, March 7, 2006.)

MannKind has said that TI leads to a quicker insulin absorption rate than that seen with other insulin products, injectable and inhaled. It also has a shorter half-life, reducing chances of hypoglycemia. The company owns all rights to the product.

Alkermes' stock (NASDAQ:ALKS) rose 15 cents Wednesday to close at $21.56.