In the wake of Pfizer pulling the plug on its poor-selling inhaled insulin Exubera, the world's biggest diabetes drug company, Novo Nordisk is throwing in the towel on development of its version of inhaled insulin.
The company announced after the closing bell today that it will lay off the approximately 300 people who were working on the product in Hayward, California because the prospects "were not good enough". Like Pfizer, Novo will be taking a sizeable charge--around $260 million U.S.--that "will negatively impact operating profit in 2007."
In a press release, NVO's CEO is quoted as saying, "...we have 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...."
A week ago at the JPMorgan Healthcare Conference Eli Lilly CEO-designate John Lechleiter told me that the company, in partnership with Alkermes isstill moving forward with inhalable insulin development. And the billionaire CEO and founder of MannKind Alfred Mann, also told me he isn't giving up either.
In fact, Mann has sunk about a billion dollars of his own money into the product and the company. You can watch that interview in the video clip--during which Mann demonstrates how the device would work. Nonetheless, it'll be interesting to see what if any impact NVO's decision will have on the stocks of MNKD, ALKS and perhaps to a lesser extent LLY.
But NVO isn't tossing out the baby with the bathwater. The company says it is increasing research and development of long-acting forms of inhalable insulin. If you're a night owl you can listen to the Danish company's conference call/web cast about all this at 4 a.m. Eastern Time.
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