DRUG FIRM ISN’T BREATH­ING EASY

Man­nKind has a lot rid­ing on its new in­haled in­sulin, but so far it’s hav­ing trou­ble get­ting di­a­bet­ics to use it

Los Angeles Times - - BUSINESS - By Stu­art Pfeifer

‘If I weren’t the world’s most per­sis­tent per­son, I would have given up [on Afrezza] a long time ago.’

—CYN­THIA GOLD­STEIN, a West Los An­ge­les di­a­betic

It took 10 years and $1 bil­lion for Man­nKind Corp. in Va­len­cia to get its break­through in­haled-in­sulin drug ap­proved by U.S. reg­u­la­tors.

Now comes the hard part: get­ting peo­ple with di­a­betes to use it.

If Cyn­thia Gold­stein’s ex­pe­ri­ence is any in­di­ca­tion, it’s not go­ing to be easy.

The West Los An­ge­les woman said she en­coun­tered many ob­sta­cles be­fore she got her hands on the new drug: first from a doc­tor re­luc­tant to pre­scribe it, then from Medi­care and fi­nally, her phar­macy.

“If I weren’t the world’s most per­sis­tent per­son, I would have given up a long time ago,” Gold­stein said. “They have a great prod­uct, and they can’t get it into the hands of con­sumers be­cause of the rest of the process. There’s just so many road­blocks.”

The new drug, Afrezza, was ex­pected to be the lat­est break­through for en­tre­pre­neur Al­fred Mann, the 89-year-old founder and chair­man of Man­nKind,

who scored pre­vi­ous suc­cesses with pace­mak­ers, in­sulin pumps and hear­ing im­plants.

But early sales have been a dis­ap­point­ment — just $1.1 mil­lion in its first two months on the mar­ket, not a good start for a drug that some an­a­lysts ex­pected to top $1 bil­lion in an­nual sales.

Mann says it’s far too early to worry, and he boasts that Afrezza will be­come one of the top-sell­ing drugs in his­tory.

To reach that goal, Man­nKind and its mar­ket­ing part­ner, French phar­ma­ceu­ti­cal com­pany Sanofi, must over­come sev­eral hur­dles.

Afrezza faces ex­ten­sive com­pe­ti­tion from ex­ist­ing drugs, in­clud­ing oral med­i­ca­tion and in­jec­tions that are get­ting eas­ier to ad­min­is­ter. “Their most im­me­di­ate com­pe­ti­tion is the fas­tact­ing, in­jectable in­sulins, which peo­ple are do­ing pretty well with,” said Dr. Mark O. Goodarzi, direc­tor of the en­docrinol­ogy di­vi­sion at Cedars-Si­nai Med­i­cal Cen­ter in Los An­ge­les.

“I per­son­ally haven’t pre­scribed it yet,” he said. “None of my pa­tients have been so un­happy about in­jec­tions that they want to switch to the in­haler.”

An­other ob­sta­cle is a U.S. Food and Drug Ad­min­is­tra­tion re­quire­ment that pa­tients pass lung-func­tion tests be­fore they can use the drug. The FDA re­quired Man­nKind to in­clude a warn­ing that the in­haled in­sulin could cause health com­pli­ca­tions for peo­ple with lung dis­ease. Smok­ers should not use the drug, the FDA says.

Health in­sur­ers have caused fur­ther de­lays, with some re­quir­ing spe­cial au­tho­riza­tion be­fore they’ll pay for the new drug. It’s likely that Afrezza will cost more than in­jected in­sulin, but pric­ing de­pends on many fac­tors, in­clud­ing in­sur­ance cov­er­age and dosage.

Ste­fan Sch­warz, head of Sanofi’s U.S. mar­ket­ing team for Afrezza, said the whole­sale price for 20 units a day of Afrezza is $9.29, com­pared with $5.23 for its in­jected in­sulin, Apidra. Sanofi is of­fer­ing coupons on its web­site to help pa­tients cover co-pays.

The good news for Man­nKind and Sanofi is that most pa­tients who try the new in­sulin like it, both for its ease of use and ef­fec­tive­ness.

“The nice thing about Afrezza is it works in­stantly for me,” said Gold­stein, 66, who has had Type 1 di­a­betes for more than 15 years. “I take my puff af­ter I’ve been eat­ing awhile, and my blood sugar never goes re­ally high.”

Afrezza is a pow­der that is ad­min­is­tered through a de­vice about the size of a small whis­tle.

The fast-act­ing in­sulin is in­tended to be used at meal­time, a quick puff re­plac­ing an in­jec­tion. It is the only drug that Man­nKind has taken to mar­ket and the key to the fu­ture of the com­pany, which em­ploys about 25 peo­ple at its Va­len­cia head­quar­ters and 250 at its man­u­fac­tur­ing plant in Con­necti­cut.

Matt Pf­ef­fer, Man­nKind’s chief fi­nan­cial of­fi­cer, said Afrezza’s suc­cess de­pends on get­ting doc­tors and con­sumers to try it.

“We only have to get them to try it once, be­cause if the pat­tern holds, they’re go­ing to like it a lot,” Pf­ef­fer said.

Dr. Alan Mar­cus, a di­a­betes doc­tor in La­guna Hills, said he has fol­lowed the drug’s devel­op­ment for more than a decade.

In three months, he’s al­ready pre­scribed the drug to about 30 pa­tients. “They love it,” he said. “It al­lows them to con­trol their glu­cose ... in a man­ner that doesn’t stig­ma­tize. If you’re out at a restau­rant, the last thing you want to do is go to the bath­room for an in­jec­tion or stick a nee­dle through your cloth­ing.”

But un­less some­thing is done to make it eas­ier to get the drug into pa­tients’ hands, doc­tors will prob­a­bly be re­luc­tant to pre­scribe it, Mar­cus said.

“It’s not an easy pre­scrip­tion,” he said. “They have to go through testing. Then you have to take a mo­ment to demon­strate it. Then you have to deal with the in­sur­ance com­pa­nies. Then you have to deal with the phar­ma­cists, be­cause most of the phar­ma­cies don’t have it in stock. This is a process that takes a lot of time, it takes a lot of ef­fort.”

Cre­at­ing an ef­fec­tive drug is no guar­an­tee it will be­come a block­buster, es­pe­cially when there are sev­eral other medicines on the mar­ket. Phar­ma­ceu­ti­cal com­pa­nies are also not known for their pa­tience with drugs that start slowly.

“Drug com­pa­nies very of­ten aban­don things if they don’t come out of the gate like trail­blaz­ers,” said David Maris, a phar­ma­ceu­ti­cal in­dus­try an­a­lyst with BMO Cap­i­tal Mar­kets.

Block­buster drugs are rare. Gilead Sciences Inc.’s hep­ati­tis C drug So­valdi gen­er­ated $10.3 bil­lion of sales in 2014, mak­ing it one of the top-sell­ing drugs in the world in its first year on the mar­ket. But So­valdi cured a dis­ease, while Afrezza is one op­tion in a crowded field of di­a­betes treat­ments.

“The sin­gle big­gest fac­tor will be Sanofi’s com­mit­ment to mar­ket­ing the prod­uct,” Maris said. “Get­ting peo­ple aware of things and get­ting them to pre­scribe it and stick with it is ex­pen­sive and it takes time.”

To this point, the big­gest mar­ket­ing push has come from Afrezza users, who have taken to so­cial me­dia sites such as Twit­ter and Red­dit to spread the word.

Sam Finta, a di­a­betes pa­tient from At­lanta, said he’s shared his ex­pe­ri­ences with the drug with peo­ple around the world through his Twit­ter ac­count: @afrez­zauser, which has about 1,500 fol­low­ers.

Finta said the drug works much more quickly than in­jected in­sulin, with­out the con­cern of re­duc­ing blood sugar to an un­safe level.

“It kicked-in in 15 min­utes and was out of my sys­tem in an hour,” Finta said, adding that it has been “lifechang­ing.”

De­spite the In­ter­net buzz, J.P. Mor­gan an­a­lyst Cory Kasi­mov is­sued a bru­tal view of Man­nKind in a May 11 re­port. He said he now ex­pects Afrezza sales to reach just $500 mil­lion by 2019 — 50% less than his ear­lier es­ti­mate.

He said lung-testing re­quire­ments were a big rea­son that Pfizer’s in­haled in­sulin Ex­u­bera was dis­con­tin­ued in 2007 be­cause of poor sales af­ter just a year on the mar­ket.

“We are in­creas­ingly skep­ti­cal that [Afrezza] will gain ma­te­rial trac­tion any time soon, which could put the bal­ance sheet into an in­creas­ingly pre­car­i­ous po­si­tion,” Kasi­mov said.

Shau­nak Deepak, an an­a­lyst with Jef­feries, is much more op­ti­mistic. In a May 15 re­search note, Deepak said de­mand for the drug is likely to rise as more doc­tors be­come familiar with it. Those doc­tors who are aware of the drug are pre­scrib­ing it “more fre­quently than we had ex­pected, es­pe­cially among Type 1 di­a­bet­ics,” Deepak said.

In­vestors pum­meled Man­nKind’s stock for much of this year, but the stock soared 33% in the first three days of trad­ing af­ter Deepak’s re­port. The stock closed Tues­day at $5.21, down 50% in the last year.

Mann said it’s far too early for con­cern.

“It’s go­ing to take a cou­ple of quar­ters be­fore you re­ally see the num­bers, but the re­sults are so good that I can’t imag­ine it be­ing a longterm prob­lem,” he said.

Com­par­isons to the failed Pfizer drug are off­base, he said. Afrezza acts faster than Ex­u­bera did and it is much eas­ier to use. The Pfizer drug was in­haled through a de­vice about the size of a can of ten­nis balls, which made it awk­ward, Mann said.

The task of build­ing mar­ket share for Afrezza falls to Sch­warz, the Sanofi mar­ket­ing leader for Afrezza.

He said Sanofi will first ed­u­cate physi­cians about the drug and then launch an ad­ver­tis­ing cam­paign this year. Sch­warz would not dis­close the size of the sales team that’s mar­ket­ing Afrezza, but he said sales reps are in all 50 states. Sanofi has about 17,000 em­ploy­ees in the United States.

“We do cover the en­tire na­tion,” he said. “There are no white spots. This is too im­por­tant.”

Mel Mel­con Los An­ge­les Times

MAN­NKIND CORP. founder Al­fred Mann, 89, says it’s far too early to worry about dis­ap­point­ing sales of the firm’s in­haled in­sulin drug and boasts that Afrezza will be­come one of the top-sell­ing drugs in his­tory.

Mar­cus Yam Los An­ge­les Times

CYN­THIA GOLD­STEIN, 66, who has Type 1 di­a­betes, says she en­coun­tered many ob­sta­cles be­fore she got her hands on Afrezza.

Mar­cus Yam Los An­ge­les Times

THE IN­SULIN drug Afrezza is ad­min­is­tered through a de­vice about the size of a small whis­tle.

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