Nektar Gives Up on Inhaled Insulin

Latest study data serve as the death knell for the Exubera program, and also send shares of competitor Mannkind lower.
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Nektar Therapeutics

(NKTR) - Get Report

and

Pfizer

(PFE) - Get Report

said Wednesday that a review of study data showed an increase in new cases of lung cancer in diabetes patients using inhaled insulin vs. control-group patients.

The news sent Nektar's shares down $1.76, or 25%, to $5.43, and marked the end of the company's development of Exubera, a short-acting insulin product, taken through an inhaler, for patients with type I and type II diabetes.

Nektar had teamed with Pfizer to develop Exubera before the Big Pharma walked away from marketing the inhaled insulin product last October, saying it failed to gain acceptance of patients and physicians. Nektar said Wednesday that it ceased all negotiations with potential partners for the Exubera programs.

Pfizer said Wednesday that it has updated the label with a warning that reflects the new information. All of the cases of lung cancer occurred in patients who were previously cigarette smokers. There were six newly-diagnosed cases of primary lung malignancies among the 4,740 Exubera treated patients in the clinical program -- in comparison to one case in 4,292 patients not treated with Exubera -- and also one post-marketing report of lung cancer in an Exubera-treated patient.

Pfizer said it will be discussing the timing of marketing authorization withdrawals with regulatory agencies.

"Fortunately, over the past year Nektar has significantly transformed its business, moving away from inhaled insulin," Nektar CEO Howard Robin said in a release. Nektar said it has ended all spending on Exubera and won't incur any charges related to the event.

The news of Exubera's fate sent shares of

Mannkind

(MNKD) - Get Report

plummeting. Shares of Mannkind, which has its own inhaled insulin product under development, were falling 56% to $2.55, well below the stock's 52-week low of $4.25.

Just one month ago,

Eli Lilly

(LLY) - Get Report

announced that it would not continue its program for an AIR insulin product it was developing with

Alkermes

(ALKS) - Get Report

. That news, on March 7, raised some investor and analyst skepticism about Mannkind's lead late-stage candidate, its experimental Technosphere inhaled insulin system.

Jeffries & Co. analyst Salveen Kochnover downgraded MannKind on March 10 to underperform from buy on that news and dropped her price target to $4 from $20, sending the stock down 9%.