Biotech Values

[DewDiligence]

SemBioSys was undone by the failure of Exubera.

“Huh?” you may be thinking. SBS never had a business relationship with PFE—or with any company in the inhaled-insulin arena.

However, the business impetus for SBS’s lead insulin program was that the worldwide demand for insulin was supposedly on a hockey-stick growth trajectory and that demand could be met only by using new production methods such as SBS’s transgenic plants.

The growth trajectory for insulin that SBS depicted in its investor presentations was attributable, in part, to increasing global affluence and the attendant increase in the number of people with type-2 diabetes. However, the major growth driver behind SBS’s hockey-stick graph was the extremely poor bioavailability of inhaled insulin. If Exubera and its offshoots had taken hold in the marketplace, the worldwide demand for insulin would have increased astronomically.

Instead, inhaled insulin is a discredited concept and the market for injected insulin drugs is steadily moving from ordinary insulin to insulin analogs. SBS thus found itself owning a novel production method for a substance (ordinary insulin) whose demand is in a permanent state of decline.