In the United States alone, there are around 3 million people living with type 1 diabetes. In order to stay alive, these people need to take insulin daily through injections or infusion pumps. According to a report by BCC Research, global sales of insulin and insulin devices were estimated to reach approximately $26 billion in 2013 and are projected to grow to $40 billion by 2018, a five-year compound annual growth rate of 9.3%.
In mid-2006, Pfizer launched an inhalable insulin product called Exubera speculating that patients would much prefer inhaling insulin as opposed to injecting it and predicting this to be $2 billion market. Just one year later, Pfizer pulled Exubera from the market and took a $2.8 billion dollar write-off. Why did Exubera fail? According to a 2007 article by Businessweek, the product was too large, difficult to use, and expensive.
The patients who did try Exubera had to endure lung-function tests, and struggled to figure out the dosing system. Some analysts said Exubera was at least 30% more expensive than inhaled insulin. 7 years later, Dance Biopharm is looking to raise $75 million in funding through an IPO to advance its inhalable insulin product, Dance-501.
California based Dance Biopharm was founded in 2010 by Dr. John Patton who has spent more than 20 years developing inhaled insulin. Dr. Patton was the co-founder of Inhale Therapeutics (now Nektar Therapeutics NASDAQ:NKTR ), where he helped lead the development and FDA approval of the first ever inhalable insulin product, Exubera. As of December 31, 2013, Dance had an accumulated deficit of just $13.7 million with cash on hand of $9.1 million. Dance filed for a $75 million IPO this week to help fund clinical trials for the Dance-501, an inhalable insulin product with a liquid formulation of insulin instead of a dry powder with the goals to lower manufacturing costs, eliminate cough, and facilitate ease-of-use.
The Dance-501 has completed a Phase I/II trial in Type I diabetics and a Phase II trial in Type 2 diabetics. The Company plans to initiate a global Phase 3 clinical trial in early 2015 and to pursue regulatory approvals, initially for type 2 diabetes in adults, in the European Union, United States and China. The European Medicines Agency (EMA) has indicated that a single global, one-year, Phase 3 trial involving 750 adult patients may be adequate to support approval of Dance-501 in the European Union.
Dance is not without competition though as Mannkind Corporation (NASDAQ:MNKD) is developing AFREZZA, a dry powder insulin inhaler. Just this past week, Mannkind announced that the target date for the FDA to complete its review of the AFREZZA New Drug Application (NDA) is July 15, 2014, an extension of three months to allow the FDA time for a full review of information submitted by MannKind in response to the FDA’s requests. Mankind has a market cap of $2.5 billion but no revenues and total liabilities of $289 million. Stockholders deficit sits at around $30 million. If Mannkind’s approval is a success, this bodes well for Dance however they are well behind Mannkind in regards to the clinical advancement of Dance-501.
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