Exubera Fiasco: What Went Wrong?

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Case Details:

Case Code : MKTG199
Case Length : 18 Pages
Period : 2006-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Pfizer, Inc.
Industry : Pharmaceutical
Countries : Europe/USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"This is one of the most stunning failures in the history of the pharmaceutical industry." 1

- Mike Krensavage, Analyst, Raymond James & Associates2, in 2007.

"We faced the combination of breaking through the barrier of conventional insulin therapy and the burden of the product on the medical practices, and this innovation [Exubera] was not accepted"U3

- Vanessa Aristide, Pfizer's Spokeswoman. in 2007.

Pfizer's Exubera Strategy Questioned

On October 18, 2007, the world's largest pharmaceutical company Pfizer Inc. (Pfizer) announced in a press release that it was withdrawing its inhaled insulin4 brand Exubera from the market and that it would not be making it in the future.5 Pfizer said that Exubera would be available till January 16, 2008, to allow users to make a smooth transition to other medications.

Exubera was a powdered form of recombinant human insulin (insulin human [rDNA origin]) delivered through an inhaler directly into the patients' lungs where it would be absorbed. Pfizer clarified that it was not withdrawing Exubera because of any safety problems.

It said that it had taken the decision to withdraw the drug as very few patients were taking it and its sales were abysmally low compared to initial forecasts. "We made an important decision regarding Exubera, a product for which we initially had high expectations. Despite our best efforts, Exubera has failed to gain the acceptance of patients and physicians,"6 said Jeff Kindler, Pfizer's CEO. It later returned the rights of Exubera to its developer Nektar Therapeutics Inc.7 (Nektar).

Pfizer's Exubera Strategy Questioned - Next Page>>

1] Avery Johnson, "Insulin Flop Costs Pfizer $2.8 Billion," http://online.wsj.com, October 19, 2007.
2] Raymond James & Associates is a Florida, USA-based diversified holding company providing financial services.
3] Arlene Weintraub, "Pfizer's Exubera Flop," www.businessweek.com, October 18, 2007.
4] Insulin is a hormone secreted by a group of cells in the pancreas called islet cells. Insulin helps in the absorption of glucose (sugar) by the cells from the blood stream and to produce energy. It forms an important part of the treatment of diabetes.
5] www.exubera.com.
6] Carl Gutierrez, "Pfizer Washes its Hands of Exubera," www.forbes.com, October 18, 2007.
7] Nektar Therapeutics Inc., headquartered in San Carlos, California, USA, is a biopharmaceutical company involved in developing proprietary products in partnership with leading pharmaceutical and biotechnology companies.


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