Exubera: Pull the plug or damn the torpedoes?

I became interested in this topic after reading many great posts on PharmaGossip, Brandweek, Pharmalot & Dr. Peter Rost's blog. Pfizer has taken a lot of hits on Exubera (and a whole bunch of other things!) elsewhere in the media as well. The most recent body blow came from Dr. John Buse, president-elect of the American Diabetes Association (read more here and here). The latest round of attacks elicited strong responses from Pfizer execs. They have indicated that with DTC ads and patient education, the adoption rate of the “billion dollar bong” will improve (actually it is more like a 2 billion dollar bong; 1.3 billion was merely Sanofi’s share that Pfizer bought out). According to Susan Silberman, Pfizer's senior vice president of worldwide commercial development, “Exubera is meeting expectations”.

The last quote got me wondering about the kind of expectations that the brass at Pfizer must have built up. Here is my back of the envelope profit/loss model for Exubera.

As you may imagine, the numbers are my guestimates and includes only US numbers. Global numbers will be similar (lower reimbursements but also lower/no DTC expenses). Still, this model seems to indicate that even if Pfizer were to get 1.2 million Rx’s in the year 2010, Exubera would still be a bust for Pfizer. The model of course has several assumptions. Among them is the fact that rivals will launch inhaled insulins by 2011 and by 2015, Exubera will be replaced entirely by successor products (either from rivals or from Pfizer itself; an intriguing and purely speculative thought is that perhaps Pfizer may launch a needle-free injectible insulin using its PowderMed acquisition?). Also, I did not include the $2 billion plus development costs for Exubera since those costs are water under the bridge. With the benefit of hindsight, the model seems to indicate that Exubera probably should not have been launched (unless the Rx numbers really take off to resemble the dream scenario in the model). Presumably the execs that spent the $2B in development have been “ARSE’d” (hat tip: PharmaGiles).

Unlike most pharma bloggers, I am no expert. I am a student and welcome comments on the model and other feedback from readers. Many of you are much more knowledgeable and have lots of pharma experience. Hopefully this blog will be a valuable learning avenue for me. Thanks.