Changewave Research: Trends in Diabetes

ChangeWave Research: Trends in Diabetes

ChangeWave Research Report:

Trends in Diabetes - 2004

Strong Preference for Inhalable Insulin; Exanatide Seen as Promising Along With “Increased Self Monitoring” & “Earlier Detection” Products

Overview

This past February we surveyed Alliance healthcare members knowledgeable about Diabetes and found diabetes cases to beon the rise – mainly because of obesity. Inhalable Insulin was identified as the biggest winner for new therapies, and an increase in self-monitoring was seen as the most significant newtrend.

To follow-up, during the week of August 10 – 16, 2004, we surveyed Alliance Healthcare members who are knowledgeable about Diabetes. A total of 110 healthcare members participated, including48doctors. Here’s what we found:

(A) Overall Trends in Diabetes

Most Promising New Product/Service Areas. “Increase in Self Monitoring” (45%) is still seen as the most promising new product/service area in Phase II or III clinical trials, followed by “Earlier Detection” (38%) and“Type II Insulin Based Therapies” (27%).

Biggest Gainers. In terms of momentum,“Earlier Detection” experienced the largest increase (24 percentage pts) since the last time we conducted an Alliance Healthcare survey on Diabetes trends (February 2004). “Increase in Self-Monitoring” also improved from the previous survey by 17 percentage pts. On the down side, “Non-Insulin Based Therapies” declined the most, dropping 9 percentage pts since Feb. 2004.

Drugstore/Medical Supply Stores Preferred for Purchasing.Eighty-five percent of respondents say their patients prefer to purchase self-testing and treatment products from “Drugstore/Medical Supply Stores,” up 10 percentage pts from the February 2004 survey. “Doctor’s Office” (20%) and “Via the Internet” (19%) came in second and third, respectively.

Innovative Approaches to “Cure” Diabetes Need More Time. When given a list of current innovative approaches to cure diabetes, a majority of respondents (54%) says none will achieve success within the next 12-24 months. Significantly, 18% see Islet Cell Transplantation to Produce Insulin” as having the best chance of succeeding in the marketplace within 12-24 months, the only approach to reach double-digits.

The Small Companies Most Likely to Succeed.Alteon (8%), CuraGen (8%), and Insmed (8%) were the small companies identified as most likely to succeed over the next 12-24 months. A percentage point behind them were Cholestech (7%) and Emisphere Technologies (7%), followed by Stemcells Inc (6%).

(B)Inhalable Insulin

Existing Patients Would Prefer Inhalable Insulin Over the Injectable Form. A majority of Alliance healthcare respondents (61%) believe “Greater than 50%” of existing diabetes patients would prefer to use an inhalable form of insulin rather than a traditional injectable form. An even higher proportion of Doctors (67%) believe this to be the case.

Newly Diagnosed Patients Would Prefer Inhalable Insulin Even More. Better than three-quarters (80%) of respondents believe that “Greater than 50%” of newly diagnosed patients would prefer to use an inhalable form of insulin rather than a traditional injectable form. Again, an even higher percentage of doctors (88%) believe this to be the case.

Most Patients Won’t Avoid Inhalable Insulin – Even if Pulmonary Testing and/or Supplemental Injections are Required. The majority of respondents (61%) believe patients won’t avoid Inhalable Insulin treatments even if it requires follow-up pulmonary testing or supplemental injections. However, 27% of respondents say patients would avoid Inhalable Insulin if it requires follow-up pulmonary testing or supplemental injections.

Among Those Familiar With Exenatide,the Consensus is it’s Promising. Among the one-out-of-five respondents familiar with Exenatide, 43%believe that more than half of Type II diabetes patients not responding to oral medications will want to use Exenatide to prevent progression of their diabetic condition.

Bottom Line: As Diabetes cases continue to rise, these survey results show promise for several new types of therapies and technologies. First,“Increase in Self Monitoring” is seen as the most promising new product/service area in Phase II or III clinical trials, along with “Earlier Detection.” Secondly,Alliance healthcare respondents also see a strong preference for Inhalable Insulin among both existing and newly diagnosed patients. Moreover, Exenatide also appears to have real market potential as an alternative to oral medications for treating Type II Diabetes, although the drug treatment is still unfamiliar to many respondents.

These results notwithstanding,when given a list of current innovative approaches to “cure” Diabetes, a majority of respondents (54%) still says none will achieve success within the next 12-24 months (although 18% did see “Islet Cell Transplantation to Produce Insulin” as having the best chance). Rather, innovative approaches to “cure” diabetes that are currently being pursued, are seen by a majority of respondents as being more than two years away from success.

The ChangeWave Alliance is a group of 4,600 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

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Table of Contents

Summary of Key Findings...... 4

The Findings...... 5

(A) Overall Trends in Diabetes ...... 5

(B)Inhalable Insulin...... 15

(D) Medicare and Obesity...... 19

ChangeWave Research Methodology...... 22

About ChangeWave Research...... 23

I. Summary of Key Findings

Introduction

This past February we surveyed Alliance healthcare members knowledgeable about Diabetes and found diabetes cases to be on the rise – mainly because of obesity. Inhalable Insulin was identified as the biggest winner for new therapies, and an increase in self-monitoring was seen as the most significant newtrend.

The findings focus on four key areas:

(A) Overall Trends in Diabetes

(B) Inhalable Insulin

(D) Medicare and Obesity

II. The Findings

Trends in Diabetes – 2004

Total Respondents: (n = 110)

Doctors: (n = 48)

Healthcare Workers: (n = 26)

Other Respondents: (n = 36)

(A)Overall Trends in Diabetes

(1) Question Asked:There are a host of new diabetes products/ services in Phase II or Phase III clinical trials. Which of the following product/service areas would you say look the most promising? (Choose No More Than Two)

Total
Respondents / Doctors / Healthcare
Workers / Other
Respondents
Increase in Self-Monitoring / 45% / 44% / 54% / 39%
Earlier Detection / 38% / 27% / 35% / 56%
Type II Insulin Based Therapies / 27% / 29% / 27% / 25%
Increase in Self-Treatment / 24% / 27% / 19% / 22%
Non-Insulin Based Therapies / 24% / 40% / 12% / 11%
Type I Insulin Based Therapies / 11% / 13% / 12% / 8%
Don't Know / 7% / 2% / 12% / 11%
Other / 2% / 0% / 0% / 3%

Most Promising New Product/Service Areas. “Increase in Self Monitoring” (45%) is seen as the most promising new product/service area in Phase II or III clinical trials, followed by “Earlier Detection” (38%) and “Type II Insulin Based Therapies” (27%).

Current
Survey
Aug ‘04 / Previous
Survey
Feb ’04 / Net Gain
Earlier Detection / 38% / 14% / +24
Increase in Self-Monitoring / 45% / 28% / +17
Increase in Self-Treatment / 24% / 21% / +3
Type I Insulin Based Therapies / 11% / 12% / -1
Type II Insulin Based Therapies / 27% / 30% / -3
Non-Insulin Based Therapies / 24% / 33% / -9

Biggest Gainers. In terms of momentum,“Earlier Detection” experienced the largest increase (24 percentage pts) since the last time we conducted an Alliance Healthcare survey on Diabetes trends (February 2004). “Increase in Self-Monitoring” also improved from our previous survey by 17 percentage pts.

On the down side, “Non-Insulin Based Therapies” declined the most, dropping 9 percentage pts since Feb. 2004.

(2) Question Asked:From the patient perspective, what is the preferred way of purchasing self-testing and treatment products? (Choose No More Than Two)

Total
Respondents / Doctors / Healthcare
Workers / Other
Respondents
Drugstore/Medical Supply Store / 85% / 85% / 88% / 83%
Doctor's Office / 20% / 21% / 15% / 22%
Via the Internet / 19% / 17% / 19% / 22%
Catalog/Phone Service / 10% / 10% / 15% / 6%
Don't Know / 5% / 4% / 4% / 8%
Other / 2% / 0% / 4% / 3%

Net Gain – August 2004

Current
Survey
Aug ‘04 / Previous
Survey
Feb ‘04 / Net Gain
Drugstore/Medical Supply Store / 85% / 75% / +10
Doctor's Office / 20% / 13% / +7
Via the Internet / 19% / 24% / -5
Catalog/Phone Service / 10% / 15% / -5
Don't Know / 5% / 10% / -5
Other / 2% / 3% / -1

Drugstore/Medical Supply Stores Preferred for Purchasing. An overwhelming 85% of respondents say their patients prefer to purchase self-testing and treatment products from “Drugstore/Medical Supply Stores,” up 10 percentage pts from the February 2004 survey. “Doctor’s Office” (20%) and “Via the Internet” (19%) came in second and third, respectively.

(3) Question Asked:Several innovative approaches to "cure" diabetes are currently being pursued by medical researchers. Of the following approaches, which one do you believe has the best chance of succeeding in the marketplace within the next 12 to 24 months?

Total
Respondents / Doctors / Healthcare
Workers / Other
Respondents
Islet Cell Transplantation (to produce insulin) / 18% / 17% / 19% / 19%
Genetic Manipulation (creation of "pseudo" islet cells for transplant) / 5% / 4% / 0% / 11%
Pancreas Transplantation / 3% / 4% / 0% / 3%
Artificial Pancreas Development / 2% / 2% / 4% / 0%
None of These will Achieve Success Within the Next 12-24 Months / 54% / 56% / 46% / 58%
Don't Know / 17% / 17% / 31% / 8%

Innovative Approaches to “Cure” Diabetes –Need More Time. When given a list of current innovative approaches to cure diabetes, a majority of respondents (54%) says none will achieve success within the next 12-24 months. Significantly, 18% see “Islet Cell Transplantation to Produce Insulin” as having the best chance of succeeding in the marketplace within the next 12-24 months, the only category to reach double-digits.

(3A) Question Asked:Why?

Sample of Alliance Member Responses:

a. None of These will Achieve Success Within the Next 12-24 Months (54%)

Editors Note: Many of the respondents who chose this category said the 12-24 month timeframe is too short to achieve success, but were generally optimistic of the longer-term potential of these approaches.

MIN9289 writes, "Some success will be obtained in the mentioned time period, but a longer time period will be required before results offer a good handle on which of these therapies appears most promising."

MJW5673 writes, "Time frame too short. Further out, several of the approaches are likely to be successful."

VDS1474 writes, "All these "cures" are still in the experimental phase."

AGR0426 writes, "Path to Phase III approval would likely take at least twice the time stated."

KCO6695 writes, "I don't think that the technology is far enough along for wide spread usage."

WRT9962 writes, "The sequella of whole-organ transplantation are still more formidable than injections and the other technologies are simply MORE than 24 months away. I like to think that pseudo islets and/or islet transplants are close, but realistically, I'm not sure they are! For me, ifI were in need, I'd want a transplant that was specific to me...that would keep me from having to take immune-suppressing drugs...that's the big holdup. It's coming, but not in the next two years."

SER5830 writes, "These are approaches for type 1 which is less than 10% of the diabetic market. These procedures are very costly and are invasive and of limited value. The timeline, if they go, is more like 4-5 years."

KES5963 writes, "Needs prolonged testing and FDA approval."

BCA3438 writes, "Long lead times and FDA approval."

ELW4764 writes, "Transplants are for 'end stage' patients and, to me, just buy time at best. Islet cell could be the 'cure' but doesn't appear to be 'ready for the market' within 12-24 months ... maybe never."

DRK5861 writes, "Lots of problems to still work out."

WLU8236 writes, "Pancreas transplantation: major surgery, immunosuppression required, scarcity of donor organs, only applicable for selected type I diabetes patients (possibly in combination with kidney transplantation). Islet cell transplantation: results still variable though improving, shortage of donor organs, procedure still deemed experimental. Artificial pancreas: technology continues to improve but remains experimental; market success will take longer than 1-2 years. Genetic manipulation: promising in the long term, a whole range of different approaches falls under this heading, major research and clinical issues remain to be resolved. Success in marketplace is many years away."

TRU7599 writes, "Time scale too short."

MAD2680 writes, "R & D development timelines along with extended trials will elongate approvals."

LEO7024 writes, "Too far from efficacy/approval."

ZSA8198 writes, "Too soon to complete necessary research."

TAC8398 writes, "Delay from clinical trials to FDA approval would most likely take longer than 2 years."
BOL2762 writes, "Needs lots of time to develop."

ELS7356 writes, "It will take 4-5 years of testing and clinical trials before any of these would be ready for marketing."

DRJ5952 writes, "Not there yet technologically."

8486810 writes, "More research needed."

ALF1482 writes, "Too soon, maybe in 5-10 yrs."

CAR8242 writes, "There is a shortage of organs for transplantation, islet cell transplantation still requires procurement and possibly culture issues which are not near completion."

CEN9132 writes, "The procedures sound too complicated. They will likely gain popularity very slowly and gradually."

COB6520 writes, "Patients must take responsibility for their health and change their diet, exercise and lose weight. Trying to "cure" diabetes without responsibility goes against the laws of the universe and will never work long-term."

PEG8651 writes, "Inability for reimbursement from insurance."

LON6196 writes, "Too complex."

FOR3567 writes, "Complex biology more complex regulation."

KVR1320 writes, "Pancreas and islet cell transplant are used in conjunction with renal transplants. Isolated pancreas or islet cell transplants are years away."

BIN8250 writes, "There is the problem of rejection with any transplant. The injections are trivial in any event. The artificial pancreas may be expensive and cumbersome..."

JAN4089 writes, "Some are already used, but achieved only small application."

ALA8640 writes, "Although Pseudo Islet cells are probably less immunogenic, rejection might still be a problem and takes sometimes many months to ascertain."

KUR3102 writes, "The research for these will not translate into products before 10 more years."

GHM8270 writes, "There may be limited use, but not large scale commercial use within the next 2 years."

WPW6938 writes, "Not sure that progress is far enough along to say that success will be achieved in that time frame."

GRA1199 writes, "We are not far enough advanced."

MIK6029 writes, "Too many rejection problems with transplantations; not enough cells to be harvested for patients."

GOO3505 writes, "Large scale studies need to be completed before something could be thought to be used for large amounts of people. Benefits need to outweigh risks."

STE3218 writes, "To much leg work to be done. Not well enough studied to be adopted and would still rely on increase in stem cell lines."

PWG2815 writes, "Regulatory pathway issues will slow down the release to the market place."

GDA7384 writes, "Because in the vast majority of people the problem is insulin resistance at target cell level as well as pancreatic failure in varying degrees."

WIL1338 writes, "Creating viable cells equivalent to body cells and able to produce insulin, regulate glucose level, is complicated and will require long term testing which goes over the 2 years indicated above."

KEN1900 writes, "Type one diabetes is about more than insulin. Transplantation is very expensive and creates its own problems with immunosupression."

SCI3493 writes, "Alogenate transplantation would not be suitable for diabetics due to lower immune responses and increased susceptibility to infection. Genetic manipulation would be promising but it still has long way to go."

SNU3210 writes, "They are not far enough along for mass use or acceptance by insurers as proven therapies."

b. Islet Cell Transplantation (18%)

SBE5857 writes, "Most developed as of today. Cannot predict time required as progressis always slow."

MAM7387 writes, "There are already methods of shielding transplanted cells from the immune system. Of course the great breakthrough will come with gene therapy but unlikely within 12-24 months. ..."

DAV6135 writes, "If any of these therapies does actually achieve success and approval for use in the next 2 years, I believe that the Islet Cell Transplantation would be the one to be approved. Whether it can do that within the next 2 years is debatable however."

GOP2712 writes, "Has been tried for several years."

SSR9050 writes, "The technology to do this is most advanced."

COA5836 writes, "Most research interest."

CLE2459 writes, "Genetic manipulation holds a better promise long term, however, Islet Cell Transplantation has a better chance within the next 12-24 months due to the positive track record and "user familiarity" with other "organ" transplants, i.e. kidney, liver, etc."
ALA7205 writes, "Development is proceeding well."

MAK7890 writes, "Procedure has been developing for many years."

c. Genetic Manipulation (5%)

AME1382 writes, "Availability in near future."

d. Pancreas Transplantation (3%)

WSU8151 writes, "Transplant of the pancreas is a stop gap measure for now. Islet cell, artificial, and genetic manipulation will be successful but not in 24 months...probably in 5 to 10 years."

SR10005 writes, "There are better immunosuppressive drugs now so that the success of pancreatic transplantation is improving. The other therapies are still at least 4 to 5 years away from reality."

e. Artificial Pancreas Development (2%)

WOO7602 writes, "Patients are currently wearing the Minimed Pump with a sensor which gives them real-time blood sugar information. This is BY Far the closest technology to curing diabetes, and will likely happen Many years before islet cell transplantation becomes commonplace."

JGR0393 writes, "No rejection issues."

(4) Question Asked:The small companies listed below are all involved in various aspects of the prevention, treatment and monitoring of diabetes. Of the companies that you are familiar with which - if any - do you think is most likely to succeed over the next 12 - 24 months? (Choose No More Than Two)