A year ago, competitors were out to produce their own versions of Pfizer's Exubera, the inhalable insulin. However, now it's clear that Exubera is a bomb. Yes, a slick new ad campaign might revive its fortunes, so don't count Exubera out of the race quite yet. But it's not likely to be the blockbuster product many thought it could be.

Now the fallout is hurting those companies that were scrambling to compete/cash in by producing their own inhalable insulins. According to a report in Forbes, those same companies are ready to beat a smart retreat. Meanwhile, they're trying to reassure nervous investors. Case in point: MannKind Corp. shares fell nearly ten percent on Monday after it was announced the company could take longer to line up a partner for its inhalable insulin, the Technosphere Insulin System.

Not only that, MannKind postponed the release of its second quarter financial report. Wall Street analysts downgraded the stock, saying its short-term outlook is "challenged" and cited disappointing sales of Exubera as a factor. The outlook could be even worse if it looks like insulin caps will make it to market. As I said in a previous blog on that topic, who wants to tote a bulky inhaler around if you can pop some capsules instead?