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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Criticism
Some analysts attributed the failure of Exubera to an ineffective launch of the drug by Pfizer. The launch of the drug was delayed by eight months after getting the approval in the US due to manufacturing problems even as it was launched in Germany and Ireland in May 2006.
When it launched Exubera, Pfizer ignored the general physicians who saw a large number of diabetes cases, and the nurses and diabetes-educators who had a substantial influence on the patients' decision regarding the choice of the drugs to be used in the treatment of ailments like diabetes...
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Exubera is Dropped
With Pfizer not announcing the sales of Exubera for the year 2006, analysts were already concerned that the drug was not doing well. Some estimates put sales at US$ 18.9 million. The poor sales trend continued in 2007. For instance, Exubera generated sales of US$ 4 million for the second quarter of 2007. Far from being a billion dollar blockbuster, Exubera became a burden on Pfizer's promotional spending. The sales projections for Exubera were also revised. Jim Reddoch (Reddoch), a biotech analyst at Friedman Billings Ramsey Group Inc...
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The Fallout of the Debacle
Exubera was billed as the biggest failure in the history of pharmaceutical marketing and Pfizer came in for a lot of criticism. In addition to its marketing strategy, its decision to withdraw the drug too was criticized in certain quarters. Some analysts felt that Pfizer had given up on the drug too easily. Others felt that Exubera was a niche product and did not fit in well in Pfizer's scheme of things as it was always after blockbusters. Some biotech experts said that Nektar could actually benefit from the Pfizer's withdrawal of the drug from the market... |
Outlook
Pfizer compensated Nektar by making a one time settlement payment of US$135 million to end all the contracts under the existing agreements relating to Exubera. It also returned the complete licensing rights of Exubera to Nektar. Through these steps, Pfizer sought to control the damage to its reputation that the decision to withdraw the drug from the market had wrought and to prevent itself from being viewed as bullying a small and struggling bio pharmaceutical firm...
Exhibits
Exhibit I Pfizer's Financial Summary: 2005-2007
Exhibit II The Stock Chart of Pfizer from 2006 to 2008
Exhibit III Key Revenue Earning Drugs of Pfizer (US$ Million)
Exhibit IV The Seven Leading Markets and Seven Expanding Markets for Diabetes Care
Exhibit V Exubera Inhaler
Exhibit VI Image from an Exubera Ad
Exhibit VII Other Inhaled Insulin Under Development
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