Pfizer signalled its confidence that inhaled insulin product Exubera will be a commercial success by buying the worldwide co-marketing rights to the drug from partner Sanofi-Aventis for $1.3 billion dollars.

Exubera, which is delivered by a dry powder inhaler and would be a more patient-friendly alternative to injections for patients with diabetes, was originally developed by Nektar Therapeutics and licensed to Pfizer and Sanofi-Aventis.

The drug was recommended for approval by regulators in Europe and the USA last year, after a long and arduous development which threatened to go off the rails when a study showed some diabetics taking the drug in trials suffered declines in lung function.

Since then, all the companies have worked hard to demonstrate that Exubera is safe and as effective as the short-acting insulin shots it hopes to replace. Late last year there was another delay in the programme after the US Food and Drug Administration said it was extending its review by three months to give it more time to look at technical data on the drug.

Current estimates put the number of people with diabetes worldwide at nearly 180 million, a number which is expected to jump to 300 million in the next 20 years, and analysts predict that that first non-injectable insulin to reach major world markets stands to achieve sales upwards of $1.5 billion a year.

Under the terms of the deal, Pfizer is also acquiring the insulin production facilities located in Frankfurt, Germany, previously jointly owned by Pfizer and Sanofi-Aventis.

Other inhaled insulins are in Phase III clinical development from Eli Lilly/Alkermes and Novo Nordisk/Aradigm, while a rival product from Mannkind is in Phase II.