MannKind reported a loss of $0.09 per share in the third quarter of
2014, narrower than the year-ago loss of $0.17 per share. The Zacks
Consensus Estimate for the quarter was earnings of $0.09 per share.
Afrezza's approval in the U.S. was a huge boost to the company.
Moreover, MannKind's decision to choose a large company like Sanofi
as a partner for Afrezza is highly encouraging. Sanofi's experience
in the diabetes market should help in Afrezza launch, expected
soon. The deal resulted in a substantial inflow of cash for
MannKind. Although, Afrezza has some advantages over traditional
needle-based insulin therapy, several limitations in Afrezza's
label keep us concerned. We remain Neutral on the stock.
Valencia, CA-based MannKind is a biopharmaceutical company
focused on the discovery, development, and commercialization of
drugs for diseases such as diabetes. In Jun 2014, the company's
only product, Afrezza was approved for the improvement of glycemic
control in adults suffering from diabetes mellitus. The FDA has
approved the drug for administration in diabetes patients before
each meal or within 20 minutes after its commencement.
Afrezza's approval comes with several limitations. For type I
diabetes patients, Afrezza must be used in combination with
long-acting insulin. Also, the drug is not recommended for the
treatment of diabetic ketoacidosis and for patients who smoke.
Afrezza even carries a boxed warning stating that there is a risk
of acute bronchospasm in patients suffering from chronic lung
disease. Afrezza's approval also comes with a Risk Evaluation and
Mitigation Strategy to ensure that the benefits of the drug
overshadow the risks of acute bronchospasm in patients suffering
from chronic lung disease.
Afrezza utilizes MannKind's proprietary dry powder Technosphere
formulation of insulin. It is inhaled deep into the lungs using the
company's MedTone inhaler, a small, easy-to-use pulmonary delivery
system. Once inside the lungs, the insulin is rapidly absorbed into
the bloodstream. MannKind has developed Afrezza to produce a
profile of insulin level in the bloodstream that approximates the
insulin level normally seen in healthy individuals following the
beginning of a meal, but absent in diabetic patients.
In Sep 2014, MannKind's worldwide agreement with Sanofi for
Afrezza became effective, which was inked in Aug 2014. Per the
deal, Sanofi is responsible for commercial, regulatory and
development activities pertaining to Afrezza across the globe.
MannKind received an upfront payment of $150 million related to the
agreement from Sanofi. The companies have also inked a supply
agreement according to which MannKind will manufacture Afrezza at
its manufacturing facility in Danbury, CT.
MannKind is eligible to receive milestone payments of up to $775
million. MannKind is also eligible to receive 35% of the global
profit/loss emanating from Afrezza sales. Sanofi will get the
balance. Under the terms of the deal, Sanofi will advance to
MannKind its share of the partnership's expenses of up to $175
The company does not have any significant candidate in its
pipeline. In 2012, the company out-licensed two of its developing
In Jun 2009, MannKind acquired Pfizer's insulin factory at
Frankfurt, Germany for $30 million. The deal involved the purchase
of assets related to the production of bulk insulin, including the
relevant property rights, production equipment, a quantity of bulk
insulin and a license to manufacture bulk insulin for use in
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