Rockford Coscia
submits:
This December, Afrezza, MannKind's (
MNKD
) inhalable insulin therapy for prandial (meal-time) management of
blood glucose in diabetics, faces FDA decision. Afrezza's path to
approval is well worn and bloodied, most notably by an approval and
subsequent market withdrawal of Pfizer's (
PFE
) Exubera. Other inhalable therapies have also been attempted by
such high-powered partnerships as Alkermes/Eli Lilly (
LLY
) and Aradigm/Novo Nordisk (
NVGN
); all abandoned in the wake of Exubera's withdrawal. Currently
Afrezza is the only form of inhaled insulin still under FDA
review.
With the market failure of Pfizer's Exubera, potential investors
in MannKind's endeavor must address why Afrezza will not suffer the
same market setbacks assuming a favorable decision by the FDA in
December. MannKind has, of course, amassed a number of reasons to
convince investors that Afrezza will become a market blockbuster
with varying degrees of substance.
I wish to address the three biggest reasons I think Afrezza will
succeed where Exubera failed: a demonstrated superiority over
injectable therapies, increased patient and doctor compliance, and
overall cost of the therapy.
Afrezza's Superiority Over Conventional Therapies
Soon after Pfizer's Exubera was approved, a review found that
inhaled insulin at the time, including Exubera, "appears to be as
effective, but no better than injected short-acting insulin." The
reason for this is likely due to the fact that the insulin
contained within Exubera is in its heximeric form.
Afrezza, on the other hand, is different. Afrezza's insulin is
broken into its monomeric components, resulting in significantly
shorter time to peak insulin levels (14 minutes for Afrezza vs. 49
minutes for Exubera). This monomeric formulation is reputed to more
closely mimic the natural insulin response of healthy individuals
as well as decrease the risk of hypoglycemia and weight gain.
In addition, MannKind has found Afrezza to be more effective at
controlling postprandial glucose excretion and reduces glycosylated
hemoglobin (HbA1c) levels - reducing possible vascular
complications associated with diabetes. Unlike Exubera, the
monomeric Afrezza offers a clear advantage over traditional
injectable therapies.
Increased Convenience of Afrezza
The big draw any sort of inhalable insulin offers, of course, is
the potential for the patient to avoid constant needle sticks for
meal-time glucose control. While it seems that convincing a
population of patients to ditch constant needle-sticks in favor or
an inhalable therapy, Exubera highlights just how difficult that
may be. Exubera's oft-maligned inhaler can only be described as
'bong-like'. While it collapsed into a cylinder about the size of a
soda can, the appearance upon inhalation made users look, quite
simply, ridiculous.
Pfizer's Exubera
MannKind's Afrezza
Afrezza inhalers, on the other hand, are small enough to slide
into a pocket, are discreet, and won't arouse suspicions if you are
pulled over by the police with it in the passenger seat. One other
consideration worth mentioning is that the Afrezza inhalers are
breath-activated, where Exubera required an 'activation while
breathing' process for administration. Patients and doctors should
find the actuation process much more convenient and reliable.
Cost
Whether or not Afrezza will be able to gain significant market
share will ultimately come down to price. The cost of a day of
treatment for Exubera was reported to be approximately $5 a day,
compared to $2 or $3 for traditional injectable insulin. While it
would appear that the cost per day of treatment has not been
settled upon with Afrezza, some reports have stated the price will
be offered at a 10-20% premium over traditional injectable
therapies. At that cost, it would be reasonable to believe that
MannKind can indeed gain a respectable share of the insulin market.
Keep watch for an announcement from MannKind on the official cost
of therapy, as a significantly higher cost of therapy - say similar
to that of Exubera - may seriously impact Afrezza's prospects.
Summary
Afrezza is not without challenges heading into its December FDA
decision and beyond. However, having apparently addressed the
efficacy, convenience, and cost issues associated with Exubera,
Afrezza stands a significantly better chance at capturing a larger
portion of the insulin market. A recent Bank of America/Merrill
Lynch survey of 100 physicians showed that MannKind could achieve a
peak penetration of 15% of the insulin market - although that rate
was adjusted down to 2% by the analysts due mainly to the failures
of Exubera. Afrezza offers a significant improvement over existing
therapies and should not be maligned by its ungainly
predecessor.
Disclosure:
No positions
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