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 in
the first quarter of 2015. 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
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
first 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 Afrezza
overshadow the risks of acute bronchospasm in patients suffering
from chronic lung disease. The FDA has also asked for several
post-marketing studies for the drug.
The pathway to approval was not smooth as the FDA had earlier
issued two complete response letters (CRL) for Afrezza. While
issuing the second CRL, the FDA asked the company to conduct two
phase III trials (Affinity 1 and Affinity 2) with the
Results from the first study (Affinity 1) revealed that
non-inferior decreases in A1c levels were observed in Afrezza
treated patients compared to the insulin aspart group. Afrezza was
found to be well tolerated during the study. Results from the
second study (Affinity 2) revealed that the primary objective of
superior reductions in A1c levels from baseline was observed in the
Afrezza group compared to the comparator oral-therapy group. Also,
more patients under the Afrezza group reached specified A1c target
levels compared to those in the comparator oral-therapy group. The
candidate was generally well tolerated in this study as well.
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 completed the worldwide agreement with
Sanofi for Afrezza 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
Apart from Afrezza the company does not have any significant
candidate in its pipeline. In 2012, the company out-licensed two of
its developing oncology programs.
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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