Exubera, the inhaled insulin device that a year ago was hailed as the first new insulin treatment option for diabetics since the drug's discovery in 1921, was officially pronounced a commercial flop on Oct. 18th by Pfizer which said it would stop selling the diabetes drug and take a $2.8 billion write off.

Although Pfizer had until now been vague about Exubera's overall sales, it revealed that Exubera's revenue for the second quarter of this year was an anemic $4 million. Injectable insulin sales in the U.S. in the same period exceeded $600 million.

"Despite our best efforts, Exubera has failed to gain the acceptance of patients and physicians," Pfizer's Chief Executive Officer Jeff Kindler said in a statement. "We have therefore concluded that further investment in this product is unwarranted."

Pfizer a year ago spent $1.3 billion to obtain the full rights to Exubera from Sanofi-Aventis of France, and was expecting the first inhaled insulin system to be approved by the FDA to be a blockbuster success. The company predicted that as a replacement for the painful injections type 1 diabetics need, Exubera would generate annual sales of more than $1.5 billion by 2010.

But the drug had a variety of problems from the start. Perhaps the most serious concern was the drug seemed to decrease patient's lung function, forcing Pfizer to conduct lengthy safety studies to deal with this issue.

Another problem was the whole delivery system. Beyond the strange-looking, unwieldy device, many diabetics found it difficult to convert a normal dose of injected insulin into a dosage of Exubera.

And if those problems weren't enough, there was the price -- with many insurers and patients balking at far more for Exubera than for injected insulin.

This does not necessarily mean, however, that Exubera will disappear never to be seen again.

Pfizer said it would return worldwide rights to Exubera to Nektar Therapeutics of San Carlos, CA, the supplier of the inhalers and the inhalation powder, and in a statement, Nektar President Howard Robin said the company had been "very disappointed" in Pfizer's marketing of Exubera.

"We are evaluating all of our options with respect to Pfizer's Exubera announcement to protect the interests of Nektar," Robin said. "We continue to believe Exubera is an important advancement for diabetic patients."