U.S. Diabetes Population Continues to Grow, Reaching 14.

5 Million, for
Overall Increase of 86 Percent over Last Decade, According to New Roper
Diabetes Study by GfK Market Measures.

Business Wire; 1/19/2006

Search for more information on HighBeam Research for Diabetes market.

EAST HANOVER, N.J. -- Research Reveals Diabetes Complications Are Widespread

and Growing, and Patients Desire to Gain Better Control over Disease

There was a steady growth in the number of newly-diagnosed diabetes patients in the
United States in 2005, with an additional 1.1 million patients bringing the total
population to 14.5 million. And while the majority of these patients engage in regular
blood testing and treatment therapies, GfK Market Measures' Roper U.S. Diabetes
Patient Market Study reveals that achieving control over the disease remains difficult
and resulting complications in the health of diabetes sufferers are widespread and
growing.

Research results show treatment therapies and blood testing practices within the diabetes
population remain similar to 2004 figures, with 61 percent of patients participating in the
study reporting to be exclusive pill users, 30 percent as insulin users and nine percent as
non-medicators, together with 88 percent reporting as regular blood glucose testers.
Despite these treatments and monitoring, results reveal that achieving blood glucose
control remains difficult for diabetes patients, as reported incidences of high glucose
measurements suggest problems and 87 percent of respondents report they would like to
be in better control of their disease.

Other highlights from the GfK Market Measures study indicate that further health
complications from diabetes are prevalent and on the rise. The proportion of total
patients experiencing cardiovascular and microvascular problems (76 and 79 percent,
respectively) has increased since 2001, with a particular note that the increase in these
same health complications is even higher among insulin patients.

"The impact of these added health problems is reflected in diabetes patients' attitudes
toward their disease, particularly among insulin users who are more likely than those on
other treatments to regard their diabetes as 'severe.' In addition, fewer than three in 10
patients in total consider themselves to be in 'excellent' or 'good' health," said David
Jacobson, Senior Vice President of GfK Market Measures' Roper Global Diabetes
Program.

Further key findings from the study point to growing trends in sources of information for
these patients. When seeking sources of information and education on diabetes, the
Internet appears to be used rather infrequently, with the majority of study respondents
reporting Web activity less often than once a week. Conversely, nearly half of patients are
turning to diabetes magazines and other general media sources for information, with an
increase in reported use of these media over 2004 figures.

Diabetes Patients Share Their Insights

Providing a global perspective on diabetes, GfK Market Measures' Roper Global

Diabetes Program is viewed as the industry gold standard in diabetes market research.
The Roper Diabetes Patient Market Studies deliver comparable results in major regions
around the world, including the U.S., Europe, Latin America and Asia Pacific. Based on
feedback from diagnosed patients, the Studies give key information on every facet of
diabetes from patient attitudes and demographics to product awareness and usage to
source of care and the doctor/patient relationship.

This particular study focused on the U.S. diabetes population. The research is based on
in-depth telephone interviews with a nationally-representative sample of 2,008 diagnosed
diabetes patients, conducted between July 7 and September 18, 2005.

About GfK Market Measures (formerly NOP World Health)

GfK Market Measures provides healthcare clients with a unique mix of custom and
syndicated solutions to support the full marketing continuum, including market
assessment, brand tracking, sales force effectiveness, healthcare consumer and product
launch applications. GfK Market Measures is a proud member of the GfK U.S.
Healthcare Companies, the largest provider of custom healthcare marketing research
services in the United States. For further information please visit
www.gfkmarketmeasures.com.

For more details on this study or to schedule an interview with a GfK Market Measures
executive, please contact Jessica Makovsky, Group Vice President of Communications,
GfK U.S. Healthcare Companies, at 215.283.3200 x372 or jmakovsky@gfkushc.com.

COPYRIGHT 2006 Business Wire

Uneven Growth and Dynamic Conditions Await $40 Billion Diabetes

Market, According to New Market Research.

PR Newswire; 3/31/2005

NEW YORK, March 31 /PRNewswire/ -- The market for monitoring and therapeutic
products to manage diabetes and its major complications totaled nearly $40 billion in the
top seven world markets in 2004, according to a new study released today from Kalorama
Information. The significant unmet need in this growing patient population has spurred
an increase in competition and technological development, making for a dynamic mix of
products and players for the years ahead.

The new study, Diabetes and Diabetic Complications: Major World Markets, found
significant geographic variation, however, in market opportunity. Country-specific
regulations, public health priorities, demographics, and patterns of clinical and
reimbursement practice all contribute to the different growth rates and forecasts for
diabetes-related products.

For example, glucose monitoring markets in most of the major industrial nations will
experience sluggish growth over the next ten years; however, the same is not true of the
glucose monitoring market in the United States, which will nearly double in that period,
according to the study. Likewise, oral hypoglycemic medications will find much greater
market opportunity in Japan and the United States, than in Western Europe.

"The markets are currently dominated by the major pharmaceutical companies and one or
two highly specialized suppliers" notes Kenneth G. Krul, Ph.D., the author of the study's
report. "However, this dominance is now threatened by a host of young companies
striving to bring new products based on novel approaches to diabetes patients."

The study analyzes four main segments -- glucose monitoring, insulin, oral
hypoglycemics, and drugs to treat four major complications of diabetes (hypertension,
dyslipidemia, arrhythmias, and peripheral vascular disease. These market segments are
thoroughly detailed and forecasted to 2014 for each of the top seven world markets --
France, Germany, Italy, Japan, Spain, the United Kingdom, and the United States.

Drug companies target diabetes market.(Markets: life

sciences/specialties)(Brief Article)

Chemical Market Reporter; 9/8/2003

AS THE patient population for Type 1 and Type 2 diabetes patients in seven major
markets (US, Japan, France, Germany, Italy, Spain, and the UK) increases, the therapeutic
management of the disease is also changing, led by the development of non-injected
insulin products. Both big pharma and specialized drug companies are seeking to get a
piece of this growing market.

The $4 billion insulin market is expected to benefit greatly from the eagerly awaited
arrival of inhaled and oral insulins, which offer greater flexibility and options for both
categories of diabetes patients, according to the London-based research firm Datamonitor
PLC.
The highly anticipated launches of San Carlos, Calif.-based Nektar Therapeutics'
(formerly Inhale Therapeutic Systems Inc.) Exubera in 2005 and Hayward, Calif.-based
Aradigm Corp.'s AERx in 2006 position these two inhaled insulin products in direct
competition for class leadership. Datamonitor projects sales of AERx to reach $1.1 billion
by 2010, outpacing the projected sales for Exubera of $800 million. Meanwhile, oral
insulins, though just as anticipated, are lagging in the drug development race, with arrival
to market slated no earlier than 2007.

The existing insulin market is dominated by pharmaceutical giants Eli Lilly and
Company, Novo Nordisk and Aventis, making licensing agreements a crucial success
factor for smaller companies such as Nektar and Aradigm that are developing non-
invasive insulins, says Datamonitor. For Exubera, Nektar holds a joint licensing
agreement with both Aventis and Pfizer Inc., and Aradigm is working jointly with Novo
Nordisk on developing AERx.

COPYRIGHT 2003 Schnell Publishing Company, Inc.

A disease we can deal with.(diabetes)

Employee Benefit News; 8/1/2003; Hirschman,

Carolyn

People with diabetes prick their fingers for blood every day. They're at high risk for heart
attacks. They don't live as long as other people.

Yet for all its grim associations, diabetes, in which the body fails to make or use insulin
efficiently, can be controlled and even prevented, giving employers a golden opportunity
to cut medical costs and improve productivity. All it takes is education and support for
employees to eat right, exercise regularly and take their medications as prescribed.

"This is a lifelong disease that requires lifelong treatment and education," says Dr. Wayne
N. Burton, corporate medical director of Chicago-based Bank One Corp. "The good news
is, with tight control and new medications, many complications can be postponed or
avoided."

Diabetes affects about 17 million Americans, or 6% of the population - and another

5.9 million have the disease but don't know it, according to the American Diabetes
Association (ADA) in Alexandria, Va. It is the nation's sixth leading cause of death.

In type 2 diabetes, the most common form of the disease, the body fails to properly use
its own insulin and in some cases also does not secrete enough insulin, a hormone made
in the pancreas that converts sugar, starches and other food into energy for daily living.
As a result, glucose builds up in the blood and the body can't easily use its own fuel.
Symptoms, which don't always appear, include excessive thirst and the need to urinate
frequently.

Less common is type 1 diabetes, typically diagnosed in children and young adults, in
which the body produces no insulin, and gestational diabetes, which affects about 4% of
pregnant women.

Type 2 diabetes usually starts after age 40, but it's getting more common among people in
their 30s and 40s, physicians note. As the population gets older and fatter, the incidence
of diabetes is expected to rise.

"People are getting obese younger and getting diabetes younger," says Dr. Robert
Spanheimer, director of the Division of Endocrinology at University of Iowa Health Care
in Iowa City.

U.S. diabetes costs totaled $131.6 billion last year, the ADA estimates, including
$91.8 billion in direct medical costs such as hospitalizations, treatment supplies and
office visits. Employers bear the brunt of $39.8 billion in indirect costs, which
include absenteeism, lower productivity and disability payments.

Per-person medical spending for diabetics averaged $13,243 in 2002, compared with
$2,560 for people without the disease, according to the Centers for Disease Control and
Prevention in Atlanta.

Managing diabetes at work

The key to managing diabetes, experts say, is to catch it early enough to get it under
control and to prevent complications. "If you can control blood glucose [levels], you can
control long-term costs, but it's a long-term phenomenon," says Dr. James L.
Rosenzweig, assistant professor of medicine at Harvard Medical School and director of
the Joslin Diabetes Center's Office for Disease Management in Boston.

Diabetes and its complications develop over the course of years, so employers won't see a
return on investment in a disease management (DM) program at least until Year 2. The
return on investment for large employer groups runs about 1.5:1 to 2:1, DM experts say.

Despite the slow payoff, diabetes is a popular area of DM. "It's very difficult to commit
more dollars for DM when health care costs are rising," says Camille Haltom, Hewitt
Associates' DM programs practice leader, but "diabetes is such a prevalent condition that
DM can make sense for the vast majority of employers."

Some employers can benefit more than others, namely, those with low turnover whose
employees are at high risk for diabetes - 45 and older, overweight, sedentary and/or of
nonwhite ethnicity.
"My advice is: Look around. If you see a lot of older, overweight people, you can benefit
from a diabetes DM program," says Al Lewis, executive director of the Disease
Management Purchasing Consortium L.L.C. in Wellesley, Mass.

Health risk questionnaires and claims analysis can reveal other risk factors, including a
family history of diabetes, high blood pressure, high cholesterol and, for women, delivery
of a baby weighing nine pounds or more.

Lifestyle changes for the better

The best hope may be for the 16 million Americans with "prediabetes," whose blood
sugar levels are higher than normal but not high enough to have diabetes. Through
educational seminars, on-site screenings and other efforts, employers may actually be
able to help prevent the disease.

The key is old-fashioned diet and exercise. The Diabetes Prevention Program, a
government-sponsored clinical trial of 3,234 overweight adults with prediabetes, showed
that "intensive lifestyle intervention" - 150 minutes per week of physical activity plus a
5% to 7% loss of body weight - reduced the risk of type 2 diabetes by 58%.

Treatment with the drug metformin reduced the risk by 31%, revealed the three-year
study. Based on the results, announced in August 2001, the ADA recommends that all
overweight people age 45 and older be screened for diabetes, with appropriate lifestyle
interventions.

People who already have diabetes can prevent or delay serious complications and early
deaths with the same lifestyle changes plus oral medications. Among the long-term
complications - kidney failure, blindness and foot amputations, to name a few of many -
the most common is cardiovascular disease, the leading killer of diabetics.

"Patients with diabetes have a two- to four-fold increase in heart disease compared with
people without diabetes," Spanheimer says. Many companies using DM couple their
diabetes and heart programs because the conditions are so closely intertwined.

Blood glucose monitoring is a daily fact of life. Once or twice a day, a type 2 patient
pricks a finger to get a drop of blood, deposits it on a test strip and feeds it into a
handheld meter, which gives a reading in seconds. The test, if not exactly fun, is critical
because it tells patients if their blood sugar levels are too high or too low, signaling a
need for treatment.

"I have patients that have one [blood glucose meter] for work and one for home, but
they're easily transportable," Spanheimer says. The devices are often given away as
promotions, but the test strips are expensive, 50 cents to 75 cents each, and usually not
covered by insurance.
Physicians also recommend that people with diabetes see a primary-care or other doctor
twice annually (and an endocrinologist if control problems develop), have yearly eye
exams to check for possible vision problems and pay special attention to foot care. In
addition, they should get yearly flu shots and undergo hemoglobin A1C tests every three
to six months to monitor average blood sugar control during the previous three months.

Intensive drug research

Most type 2 patients take any of several oral medications, singly or more often in
combination. Different drugs lower blood sugar in different ways, with the severity of
disease determining the drug prescribed. According to the ADA, 49% of adult diabetics
take oral medications only, 22% take insulin only, 17% take neither and 11% take both.

The oldest class of diabetes drugs, sulfonylureas, stimulate the pancreas to release more
insulin. Around since the 1950s, they are still widely used but can stop working after
several years, necessitating a second medication.

Another common drug, metformin, sensitizes the body to insulin already present. Newer
insulin sensitizers, called thiazolidinediones (TZDs), can hurt the liver; the TZD
troglitazone was pulled from the market because it caused severe liver toxicity. Also
available are alpha-glucosidase inhibitors, which slow or block the breakdown of starches
and sugars.

Diabetes drug costs can add up for employers, even with generic forms of the
sulfonylureas and metformin. The per-member per-year cost for diabetes drugs in 2002
averaged $25.66, or 4% of the total drugs costs for Express Scripts Inc., the pharmacy
benefit management firm based in Maryland Heights, Mo.

Many type 2 diabetics with longstanding or severe conditions take insulin daily, via
injections or insulin pumps, because their bodies have stopped making it. A type of
inhaled insulin may be approved this year, with Nektar Therapeutics' Exubera
considered the leading candidate. Oral medications with fewer side effects are under
investigation, too, but nothing new is expected on the market for a few years [this article
is dated 2003].

What employers can do

Even employers without formal DM programs can help workers with diabetes take better
care of themselves. A bonus is that all employees benefit from such practices as healthy
meals in the company cafeteria, healthy snacks in vending machines, fitness programs
and lunch-and-learn sessions.

Employers can also encourage patients to test their blood glucose levels and have
insurance cover annual eye exams, flu shots and pneumonia vaccines. A flexible spending
account gives a needed price break on test strips. See www.diabetesatwork.org for more
suggestions.
In addition, on-site blood tests that screen for too-high levels of blood glucose can find
diabetes or prediabetes in employees who didn't know they had it. Bank One every year
screens several thousand of its 73,000 employees for the disease, Burton says, and about
2% to 3% of tested employees discover they have it.

Intensive education can also help. Bank One found in 1997 that after five on-site
seminars with a nurse educator, 36 diabetic employees improved their diabetes control, as
measured by lab tests three and six months after the education program began. Their
average medical costs rose, but diabetes-related claims fell.

"The intent of the program was to supplement the education they were getting from their
doctors," Burton says. Compliance fell after the sessions ended, so Bank One provided
reinforcement with occasional seminars and quarterly blood tests.

Finally, a dose of sensitivity goes a long way. Allow time and flexibility for workers with
diabetes to eat when they need to eat and to test their blood sugar as needed. "It only
takes a minute to do a blood sugar [test]," Spanheimer notes. "That would avoid a low
sugar that could turn into a seizure or [other] major event."

Rosenzweig also counsels patience. "Diabetes, to be managed properly, takes a long

time."

Copyright 2003 Thomson Media Inc. All Rights Reserved.

http://www.thomsonmedia.com http://www.benefitnews.com

Diabetes 2003

Over 12 months through September 2000, the global retail sales of diabetes drugs were US$8.1
billion, an increase of 19 per cent on the year before. Oral anti-diabetics were the leading
category of drugs with US$5.1 billion of worldwide retail sales. The remaining 37 per cent of the
sales came from insulin. Visiongain predicts that the retail market for diabetes medications will
exceed US$20 billion annually by 2006. Currently, the leading oral diabetes medication is
Glucophage, which generated worldwide sales of US$1.7 billion in 2000. Modern diabetes drugs
have succeeded in treating the symptoms of diabetes and this report presents information on the
leading treatments of type 1 and 2 diabetes. In contrast available therapies have failed to
suppress the progression of diabetes and diabetic complications and this potential growth area is
also looked at in this report. The report is arranged to provide you with an overview of the
diabetes drug market accompanied by analysis and forecasts by product type and application.

The purpose of this report is not only to provide a textbook explanation of diabetes but to present
an overview of the pharmaceutical market with the latest information regarding pharmaceutical
products and industry trends. It will not only quantify but also qualify, for you, the market of
diabetes therapies as an area of research and investment. Forecasts of the market and an
analysis of products in the worldwide prescriptions market will provide a basis for understanding
the significance of past developments and future possibilities within this therapeutic category.

Market figures regarding the current value of the diabetes drug market are taken from the most
recently available data of the global pharmaceutical industry. Projections and forecasts for the
future of the diabetes market ranges from 2003 to 2010. The main areas of pharmaceutical
developments within the diabetes market are delivery technologies for treatment of type 1
diabetes and drugs for the treatment of type 2 diabetes. Offering a comprehensive analysis of this
therapeutic area, this report will cover the following categories of diabetes drugs:

• Rapid Acting Insulin

• Short Activity Insulin
• Intermediate Acting Insulin
• Long Acting Insulin
• Ultra Long Acting Insulin
• Insulin Mixtures
• Sulfonylurea
• Meglitinides
• Biguanides
• Thiazolidinediones
• Alpha-Glucosidase Inhibitors

Likewise the following area of insulin delivery technology will also be analyzed:

• Insulin Injection
• Insulin Pens
• Insulin Jet Injectors
• External Insulin Pumps
• Implantable insulin pumps
• Insulin Pills
• Transdermal Insulin
• Oral Spray Insulin
• Inhaled Insulin
• Transplantation Procedures

Analysis includes the use of charts and graphs measuring product growth and trends within the
marketplace. In addition, a discussion of research into the illness provides the reader with a
deeper understanding of the possibilities for future treatment and avenues for possible research
and development budgets. Company-specific information, including sales figures, drug pipeline
status, and research and development trends is provided throughout the report.

By purchasing this report, you will have;

1. An improved understanding of the current state and future of the diabetes market

2. The latest information on the leading companies engaged in R&D and products in the pipeline

3. The leading perspective of recent drug developments and revelations

4. Knowledge of the diabetes market as an area of growth, research and investment

In short this report represents a key tool for any company wishing to enter or consolidate within
the major diabetes market.
January 2005

Diabetes type 2 has now reached epidemic levels, affecting over 30 million people in the
US and Europe, with this figure projected to rise to over 40 million by 2012. Rising rates
of obesity and the increasing age demographic are key drivers of this epidemic. Ensure
you maximize the opportunities presented by this demographic growth, drive product
development and exploit new and existing revenue streams in this rapidly growing
market.
The insulin market
 Céline Schiff, biotechnology project manager, Alcimed
Rodolphe Renac, head of the Biotechnology division, Alcimed

Diabetes is a disease wherein the patient has difficulties in

assimilating, using and storing sugars provided in the diet. It is
caused either by a lack of insulin secretion by pancreatic beta cells
located in the islets of Langerhans (Type I diabetes, insulin-
dependent), or when the action of insulin is impaired (Type II
diabetes, non-insulin dependent).

In the treatment of patients with Type I diabetes, insulin injections are

administered to compensate for the lack of endogenous insulin
secretion (some 10% of patients). In the case of Type II patients, first-
line treatment consists of antidiabetic drugs that improve the action of
insulin produced by the pancreas or that increase insulin production
whenever insulin levels are too low. The facts show that almost half of
Type II diabetes patients will go on to develop some form of diabetes
necessitating the administration of insulin.

A disturbing pandemic
This chronic, serious illness
represents a real worldwide
epidemic. According to the
World Health Organization
(WHO), the number of
people suffering from
diabetes has risen from 30
million in 1985 to almost 200
million in 2005, with
© INSERM 4475: Glucose test used in
projected figures suggesting
diabetes monitoring. that 370 million will be
affected by 2030. This increase can mainly be attributed to the ageing
population, consumption of the “wrong” kinds of food, and excess
body weight and obesity (see Diabetes: a worldwide epidemic). In
developed countries, the cost of treating the disease accounts for 5-
10% of national healthcare budgets. For example, the American
Diabetes Association has estimated that, in 2002, the total cost of
diabetes amounted to $132 billion in the USA alone. Furthermore,
diabetes is the fourth-ranking cause of death in developed countries,
as the disease is associated with a host of complications (see Diabetes,
Insulin delivery devices – an industry under threat
Kirsty Barnes

17/02/2006 - The insulin delivery devices thriving in today’s market will slowly be
replaced as new and better technologies continue to rise from the R&D pipeline. For
current market leader, Novo Nordisk, this threat is particularly dangerous.

While inhaled insulin devices won't replace injections in the near future, there are
predictions that they could capture up to $1.5bn (€1.3bn)worth of market share a year,
and there is no doubt that with the launch of Exubera this year, this impact will start to
hurt the current players.

If Exubera sells well, Nektar Therapeutics, who partnered with Pfizer in developing the
product, will benefit greatly, along with the two contract manufacturers that Nektar has
enlisted to make the delivery devices, Bespack in the UK and West (formerly TechGroup)
in Arizona.

Their success will inevitably be at the expense of traditional insulin device manufacturers
of syringes, pens and other gadgets, who will begin to feel the pinch.

This pinch will grow stronger, as other budding biotech companies with non-injectable
insulin delivery devices in the pipelines, such as, Alkermes, Generex, MannKind, and
Innovata, move in for their share of the market over the next few years.

When this occurs, companies involved in all aspects of traditional injectable insulin
manufacturing will suffer, right across the spectrum, from manufacturers of syringes and
pens, to sharps containers.

Traditionally insulin has been injected under the skin with a needle and syringe. Until the
late 1990s, Becton Dickinson (BD) dominated the insulin delivery systems industry,
commanding 63 per cent of the market with its syringes.

However, the arrival of insulin pens pulled the rug out from BD, as the popularity of new
insulin pens grew throughout the world, particularly in Europe. Now in some countries,
70-90 per cent of all insulin is delivered by pen.

Novo Nordisk, who dominates the world insulin market, now also has a stranglehold on
the world insulin delivery device market, holding a 70 per cent share with its range of pen
devices, Vinayak Arora, analyst for market research firm RocSearch India, told In-
PharmaTechnologist.com.

Eli Lilly also holds a presence in this market, holding a 15 per cent share with its insulin
pens, and other smaller players include Owen Mumford and Disetronic.
BD, who saw its monopoly disintegrate, has managed to adapt to this dramatic market
shift, moving its focus to making insulin pen needles to compensate for reduced syringe
sales, while also continuing to manufacture traditional and pre-fillable syringes for a
broad range of drugs.

However, the new threat arising from the biotech boom, looking to eventually wipe out
injectable devices altogether, is like nothing this industry has seen before, and BD and
many other existing companies now involved in pen manufacturing may struggle to adapt
their businesses to the new technologies.

Pharma giant Novo Nordisk is invested heavily in both the injectable insulin and pen
device markets, being the market leader in both areas, and clearly has the most to lose if
any of the next generation of non-injectable products manages to capture a significant
chunk of its business as the market shifts away from injectable delivery.

Of particular concern is that Novo's pipeline is also still focused heavily on injectable
insulins and contains only one inhaled insulin product that is lagging well behind Pfizer
and Lilly's competitor products in the clinical development stage.

However, the shift towards non-injectable insulin could also be particularly dire for a
variety of other device manufacturers who have their livelihood invested in this industry.

A number of companies for example, having survived the onslaught of insulin pens, still
make traditional syringes for insulin delivery, including BD, Abbott, Aimsco, Can-Am
Care, Medicore and UltiMed. These companies will soon need to brace themselves for a
new challenge.

Several other companies who work behind the scenes manufacturing components and
systems for injectable drug delivery will also need to rethink their business focus.

These include Owen Mumford, BD, Palco, HypOview, Medicool, MEDgenesis, CanAm
Care, Apothecary Products and Whittier Medical, who are all involved in making devices
that work with syringes to help patients inject themselves more easily.

They also include businesses such as West Pharmaceutical Services that produces
stoppers and seals for vials, and closures and disposable components used in syringes, as
well as firms such as Sharps Compliance and Plastiproducts who make sharps containers.

Several other manufacturers of other devices that have been developed over the years to
administer insulin may also soon experience a decline in business.

These include Medi-Ject Corp (owned by Antares Pharma), Activa, Equidyne, and
Bioject Corp, all who make insulin jet injectors, which send a fine spray of insulin
through the skin by a high-pressure air mechanism instead of needles.
Other manufacturers include MiniMed, Animas and Disetronic, who make external
insulin pumps, consisting of a reservoir for insulin, a battery-operated pump and a
computer chip that controls insulin delivery, connected to plastic tubing that ends with a
needle inserted just under the skin near the abdomen.

Both insulin jet injectors and insulin pumps have been around for several years but
haven't managed to capture a significant amount of interest within the market, partly
because they require regular cleaning and maintenance and can be very expensive
compared with traditional injectable devices.

Due to this, the next generation of non-injectable insulin devices may prove a particular
challenge for these sectors.

What is clear though, is that the formerly placid insulin delivery systems industry is
facing a period of rapid change and the stakes are high.

Diabetes Set to Increase from 177 to 370 Million by 2030

posted May 2, 2005

A diabetes epidemic is under way. According to the World Health Organization and the US is
number one.

An estimated 30m people worldwide had some form of diabetes in 1985; by 2000, the number
had increased to 177m. WHO projections suggest that the number of people suffering from the
disease will increase to some 370m by 2030.

This new report focuses on 10 key countries, providing coverage of the market in North America,
Europe, Japan and Latin America. These countries accounted for 86% of the global market in
2002. The largest market by a huge margin is the US, which, at close to $7bn in 2002, was well
over five times larger than the second-ranked market, Japan. Although 2002 was a relatively poor
year in the US (with little increase in overall sales), the American market has grown rapidly in
recent years, to account for 57% of world sales, compared with less than 50% in 1998. In
contrast, relatively steady sales increases in Japan and third-ranked Germany have resulted in a
loss of market share for these countries, in global terms. This has also happened elsewhere in
Europe, such as in France, Italy and Spain. In contrast, the markets in Canada and Mexico have
expanded rapidly.

The costs involved in the care and management of diabetes are increasing rapidly. The WHO
estimates that, on a global basis, 4-5% of health budgets is spent on diabetes and diabetes-
related illnesses. As discussed in this report, a person with diabetes incurs medical costs that are
two to five times higher than those of a person without diabetes. Diabetes incurs considerable
indirect costs due to the number of patients who may not be able to continue working or work as
effectively as they could before the onset of their condition. Factoring in such indirect costs, the
American Diabetes Association calculated that the total cost of diabetes in the US was $132bn in
2002.

The diabetes market is concentrated in the hands of six key players, which between them
account for three-quarters of sales. In 2002, the market was headed by Lilly, with sales of $2bn
and a 16% share. Second-ranked Takeda made sales of over $1.8bn, to account for almost 15%.
This put the increasingly focused Japanese pharmaceutical company just ahead of Novo Nordisk,
which is something of a specialist in the diabetes market. The next three companies in the
rankings were the major multinationals, GlaxoSmithKline (GSK), Bristol- Myers Squibb (BMS) and
Aventis.

Key Findings:

- Currently 4-5% of health budgets is spent on diabetes and diabetes- related illness: this
expenditure is also forecast to increase rapidly

- In the short term, recently-launched oral antidiabetics, as well as fast and long acting insulins,
will drive the market

- There is also a rapid increase in the number of children presenting with the disease

- The market formed by such products totalled over $12bn in 2002

- With sales of $7bn, the US is the dominant market, ahead of Japan and Germany

- Six companies account for 75% of global diabetes sales

- In oral antidiabetics, as well as in insulins, marketers of innovative products face increasing

competition from lower-priced generics and, in Europe, parallel imports

The prevalence of diabetes will increase from 177m worldwide to 370m by 2030. But the market
faces unprecedented change in terms of:

- Obesity driving market growth

- Intense competition from effective generics such as metformin and the sulphonylureas

- Uncertain performance of glitazones in non-US markets

- Impact of oral antidiabetics and oral or inhaled insulins

- Development of drugs targeting specific symptoms

- Payees' increasing resistance to rapidly increasing healthcare costs

Source: Diabetes In Control.com.

Diabetes Treatment in the Future: Great Expectations

Oral agents and human insulins and analogues are the main treatments used for diabetes.
With the growing epidemic of diabetes, the use of these treatments is expected to triple
over the next 10 years.

This will be an expensive proposition costing about $20 billion for the medications alone
in 2010. Thus, it remains important to prevent diabetes if possible.

Sales forecast for the global diabetes market

 Source: IMS Therapy Forecaster

Oral agents: What's new?

TZDs (thiazolidenediones): These medications make insulin work more effectively and
are theoretically beneficial at almost any stage of diabetes. Since Rezulin (troglitazone)
was removed from the market, two other medications have become available: Avandia
(rosiglitazone) and Actos (pioglitazone).

There have been no well-documented cases of serious liver toxicity with these
medications. They should not be used in individuals with moderate heart failure or liver
disease. The FDA still recommends that liver function should be monitored
approximately every three months.

• New: These agents may preserve the Beta cells in the pancreas and may improve
the overall response to oral agents.
• New: These medications may also have protective effects on blood vessels and
prevent hardening of the arteries.

Combinations: We now have access to pills that combine two medications into one
tablet. This offers convenience and in some cases, some cost savings, one has to make
sure that both medications are appropriate and safe.

Many of the combinations include an agent to stimulate the pancreas and the second
agent to help the insulin work better.
Insulins: Several "designer" insulins are either fast acting or very slow acting, which
makes it easier for those who need insulin to control their sugars at rest or at mealtimes.
These include Humalog, Novolog (rapid), and Lantus (long-acting) insulin.

A number of pen-type devices have also been designed to make it easier for someone to
take their insulin more accurately and conveniently.

The future

Practice: There will be an increase in the proportion of the population diagnosed with
Type 2 diabetes and also a greater awareness of impaired glucose tolerance and
dysmetabolic syndrome.

Dysmetabolic syndrome is perhaps the single biggest health care issue in North America
and individuals with this syndrome are at high risk of diabetes and heart disease. Patients
will be diagnosed much earlier and treated more aggressively to stop these conditions
from developing.

New products

Inhaled insulin: There are four inhaled insulin products in development at the moment.
Exubera, a Pfizer, Aventis, and Inhale Therapeutic Systems joint project, is the most
advanced in development and could become available within two years.

Inhaled insulin could replace insulin injections. Moreover, in Type 2 diabetes it could
reduce the number of oral antidiabetic drugs required, since patients would be more likely
to accept insulin at an earlier stage in their treatment regimen and improve their
compliance.

Byetta: Byetta (exenatide) was developed to improve glucose control in patients with
type 2 diabetes who are not achieving target goals with current treatment regimens. It is
administered by twice-daily subcutaneous injections. The US FDA approved Byetta in
April 2005 for use in conjunction with other diabetes medications, but not as a stand-
alone medicine.

Byetta’s active ingredient mimics a hormone found in the saliva of the poisonous Gila
monster, the largest lizard native to North America, and the human gut polypeptide called
glucagon-like peptide 1 (GLP-1). This substance decreases a person's appetite and slows
down gastric emptying leading to weight loss. Moreover, it enhances the ability of the
body to dispose of extra glucose in the blood stream after meals. Long-term, it may even
promote new production of beta cells in the pancreas.

Symlin: Symlin (pramlintide acetate) is a synthetic version of human amylin, a hormone

produced along with insulin by the beta cells in the pancreas. Symlin has been studied for
treatment in patients with type 1 diabetes or insulin-using type 2 diabetes. Patients inject
it subcutaneously before meals. In March 2005, the US FDA approved its use only in
conjunction with insulin injections.

New indications: The US FDA has approved Bristol-Myers Squibb's Glucophage

(metformin) for use in children. This is of particular importance with the increasing
prevalence of Type 2 diabetes in children.
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