Inhale Thera Dn 8%: Investors Business Daily Article Cited
June 24, 1998 4:54 PM
NEW YORK (Dow Jones)--Inhale Therapeutic
Systems (INHL) shares fell nearly 8% Wednesday after
an article in Investors Business Daily questioned the
market size and estimated cost of the company's insulin
inhaler product.
Albert Rauch, an analyst with Everen Securities Inc.
who was quoted in the article, said that while he feels
Inhale Therapeutic's product is a good one, it may be
too expensive and have a market too small to make it a
viable alternative to injected insulin.
"Inhaled insulin will only replace short-acting insulin,
which is not a major part of the market," Rauch told
Dow Jones.
"Also, you need eight to 10 times more inhaled insulin
than injected insulin, so it's starting to look like $5 a day
just for insulin," not including the delivery device, Rauch
said. Injected insulin costs about 60 cents a day, not
including the syringe and related supplies, he said.
"There could be issues in trying to get insurance
companies to reimburse it," he said.
Ajit Gill, Inhale Therapeutic's chief operating officer,
agreed that an inhaler requires more insulin than
injection, but said his company's delivery system is
cheaper than injections because users will save money
on syringes and needles.
Gill wouldn't comment specifically on the pricing of his
company's product, noting that partner Pfizer Inc. (PFE)
is in charge of pricing.
Inhaled insulin "will turn out to be a significant market
opportunity," Gill said, noting that 82% of type I and
90% of type II diabetics who were offered the
opportunity to continue clinical trials elected to do so.
About 88% of the combined group said they would buy
the commercial system, he added.
Gill said if there weren't a market for inhaled insulin, the
company's rivals, such as the collaboration of Aradigm
Corp. (ARDM) and Novo Nordisk AS, wouldn't be
developing similar technologies.
Inhale Therapeutic shares fell 2 3/16, or 7.9%, to 25
9/16 on Nasdaq volume of 1.2 million shares. Average
volume is 184,800.
-Victor Ozols; 201-938-5394
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