Novo Nordisk Loses Faith in AERx, Takes a $260 Million Hit

Denmark-based Novo Nordisk discontinued its experimental AERx insulin inhaler triggering a hefty one-time charge of $260 million.

Novo, the world’s biggest insulin producer, said that while the AERx inhaler was safe, the system offered little upside when compared to the company’s suite of injection needles.

Novo, which controls 45% of the insulin market, will continue to focus on ease of use and convenience. The company’s FlexPen is a highly portable, pen-size device that delivers insulin through a tiny needle.

Lars Rebien Sørensen, President & CEO of Novo commented,

“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 such as Novo Nordisk’s FlexPen. In general, people with type 2 diabetes start insulin therapy with long-acting or premixed insulin, and experience shows that they want very simple, very convenient devices for administering their insulin.”

The decision comes only months after Pfizer discontinued its Exubera inhaled insulin system after patients and doctors failed to adopt the device. Sales of Exubera totaled $4 million in Q2 2007; some analysts had predicted the system would exceed $1 billion in annual sales. The Exubera inhaler was oft-cited as large and unwieldy and more expensive than injectable insulin.

In lieu of the strategy shift, Novo will increase research and development activities targeted at inhalation systems for long-acting insulin formulations.

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