Pfizer Inc.'s discontinuation of its Exubera insulin powder will affect inhalable-insulin-device production at West Pharmaceutical Services Inc. in Tempe, Ariz., and Consort Medical plc in Milton Keynes, England.
The drug had been characterized as having blockbuster potential, but the halt creates major uncertainty. Drug industry giant Pfizer said Oct. 18 it would stop selling the product and return marketing rights to Nektar Therapeutics.
As licensor and developer, Nektar of San Carlos, Calif., is scrambling to determine how it might proceed with the product, and what roles West and Consort roles will have, if any.
For Exubera, ``we assume no revenue in 2008,'' Donald Morel Jr., West's chairman and chief executive officer, said in a Nov. 1 third-quarter conference call. The Pfizer announcement ``surprised and disappointed'' the West team, including its Tech Group unit.
West reported that Exubera accounted for $7.2 million of Tech Group's sales of $71.4 million for the third quarter, ended Sept. 30.
Consort Medical, which until Oct. 3 was known as Bespak plc, retained the Bespak name for its inhaled drug-delivery business. Bespak had said in June that it would eliminate up to 160 positions in its Milton Keynes, England, facility because of lower production forecasts for Exubera.
West has invested about $15 million in assets and production facilities and another $13 million in intangible assets, Morel said.
Morel said most of the processors' costs should be covered under a complex contract.
Under existing arrangements, Tech has production commitments through March. West said it will evaluate whether to take a charge against earnings, and whether it can recover investments it made in the project, after it learns more about future plans for Exubera.
Tech Group bid successfully for the Exubera job in 2000 and dedicated a Tempe facility to the product. Tech installed a Class 100,000 molding and assembly clean room and acquired 15 Netstal hydraulic presses.
New York-based Pfizer introduced Exubera in the United States in September 2006.
Nektar said it was disappointed in how Pfizer marketed Exubera. The medical community reported the bulky Exubera device was difficult to use, and insurers were slow to approve payments for the product. Pfizer said it would take pre-tax charges of $2.8 billion related primarily to the write-off of assets associated with Exubera.
Pfizer's contract with Nektar provides for a 90-day cancellation notice, though the parties have a binding commitment until June 30.
Other companies are developing inhaled insulin forms to reduce a diabetic person's need for daily injections.