The US Food and Drug Administration approved Pfizer's inhaled insulin Exubera on Friday, shortly after the product was given a green light by regulators in Europe.

Pfizer confirmed that the FDA had approved Exubera Friday afternoon, after some confusion earlier in the day when it retracted a statement made by chief executive Hank McKinnell at the World Economic Forum in Davos that the drug had been cleared.

Exubera is a powdered formulation of insulin that is delivered via a hand-held inhaler, and is designed to be used in place of short-acting insulin injections before meals in patients with both type 1 and type 2 diabetes. Most patients will still have to use a long-acting injectable insulin to provide background cover, but Exubera could dramatically cut the number of injections they need to control their blood sugar each day.

It becomes the first non-injectable insulin to be cleared for marketing in the USA and Europe, and has been widely predicted to become a $1 billion-plus product. Pfizer said it plans to introduce Exubera in the USA and Europe in the middle of 2006.

Crucially, Exubera can now be launched with a clear lead over its nearest rivals in pulmonary insulin delivery - Eli Lilly/Alkermes and Novo Nordisk/Aradigm, whose competing products are still in late-stage clinical testing.

Despite the earlier European approval, there had been fears that the FDA may have stopped short of full clearance, mainly because of concerns about Exubera’s long-term effects on the lung. It was delayed on the way to market after a study revealed some declines in lung function after protracted use of the product.

In a statement, Pfizer said labelling for the drug will note that a small decrease in lung function can occur during Exubera treatment, although this change occurs within the first months of treatment and should not worsen as treatment is continued.

Patients should also not take Exubera if they have poorly controlled or unstable lung disease, or if they smoke or have stopped smoking less than six months prior to starting treatment with the drug, according to labelling.

Pfizer has also committed to carrying out long-term post-marketing studies of the product’s safety to guard against any unforeseen side effects.

“Many people who could benefit from insulin are fearful of injections, so they delay treatment five years or ten years, placing them at risk for serious complications. Now, for the first time patients can improve blood sugar control with fewer or no painful injections," said Dr William Cefalu, an investigator in the clinical trials of Exubera and chief of the division of nutrition and chronic diseases at the Pennington Biomedical Research Center, part of Louisiana State University in Baton Rouge.

Pfizer now owns commercial rights to Exubera, after buying out former partner Sanofi-Aventis in a $1.3 billion deal earlier this month. The product was developed alongside drug delivery specialist Nektar Therapeutics.

News of Exubera’s approval in the USA helped spur a 4% rise in Pfizer’s share price to $25.99, although the increase was also driven by an FDA green light for new colorectal cancer drug Sutent (sunitinib), the European approval of Exubera and a positive opinion for Lyrica (pregabalin) by Europe’s Committee for Medicinal Products for Human Use for use in anxiety.

Meanwhile, Exubera’s approval on both sides of the Atlantic is also a major boost to UK-based drug delivery company Bespak, which will manufacture the inhaler device used for the product.