Hoechst, Pfizer to Jointly Develop Insulin Products (Update3)
Bloomberg News
November 4, 1998, 4:25 p.m. ET
Hoechst, Pfizer to Jointly Develop Insulin Products (Update3)
(Updates stock activity.)
Frankfurt, Nov. 4 (Bloomberg) -- Hoechst AG and Pfizer Inc.,
two of the world's 10 largest drugmakers, are taking on Novo
Nordisk AS and Eli Lilly & Co. in the $2.5 billion insulin market
by agreeing to jointly develop and sell an inhaled form of
insulin.
The two companies will use an experimental delivery system
and powdered insulin from Inhale Therapeutic Systems Inc., which
previously had a development pact with Pfizer for the new
technology. A combined Hoechst and Pfizer sales force of 5,600
will market the product once it wins regulatory approvals, and
Inhale will receive royalty payments from both.
In a further sign of their commitment to the new product,
Hoechst and Pfizer agreed to jointly build and own one of the
largest insulin-production facilities in the world. The factory,
located in Frankfurt, would cost as much as $500 million and
employ 200, analysts said. Financial details of the agreement
weren't disclosed.
Inhaled insulin would give about 67 million diabetic
patients worldwide an alternative to painful, daily insulin shots
they need to properly convert blood sugar into energy. While
diabetes is a chronic disorder where patients don't make enough
or properly use the insulin they produce, another 75 million
patients use diet and exercise instead of insulin to control it.
'Logical Move'
''It's a logical move and a great symbiotic relationship,''
said Franc Gregori, an analyst at BNP Equity Research in London.
''Pfizer doesn't have the insulin technology background but it
has a nasal-spray drug-delivery system, while Hoechst has the
insulin knowhow.''
Shares of Germany's Hoechst rose 1.94 deutsche marks to
72.35 marks. Pfizer, which will now have to share the market with
Hoechst's drug unit Hoechst Marion Roussel, fell 3 5/16 to 105
15/16. San Carlos, California-based Inhale rose 1 7/8 to 30 7/8.
Inhaled insulin could generate as much as $1 billion in
annual sales, said Caroline Copithorne, an analyst at Prudential
Securities. ''It's going to expand insulin into a much larger
market because of the higher price and the conversion of some
patients, who are now reluctant to use injections, to inhaled
insulin,'' she said.
Until the Frankfurt factory is complete, Hoechst will
provide the bulk insulin to Inhale for conversion into powered
form. The Hoechst insulin will be used for final clinical trials,
slated to begin in the first half of 1999, and initial sales of
the product, the companies said.
The addition of Hoechst's insulin production and its
commitment to the new manufacturing site was critical for New
York-based Pfizer and Inhale Therapeutics, since neither has much
experience in the tricky process of making insulin and the
inhaled, powder formulation is requires massive amounts of bulk
insulin. Now, it's clear there will be a large enough insulin
supply, and a strong international sales staff, to support a very
successful product, Copithorne said.
'Dynamic Alliance'
''This dynamic alliance offers Hoechst Marion Roussel an
ideal opportunity to use its expertise in insulin, its modern
production technology and its global business network to produce
a major breakthrough for diabetics,'' Hoechst Marion Roussel
chief executive Richard Markham said in a statement.
Insulin from the Inhale system, which was as effective as
injected insulin in phase 2 studies, is sent deep into the lungs
as a fine, dry aerosol powder then transported by the bloodstream
throughout the body.
Dura Pharmaceuticals Inc. is working with Indianapolis-based
Lilly to develop its own inhaled form of insulin.
--Phyllis Carter in the Frankfurt newsroom (49-69) 92041-200 and
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