Danbury Times: New AFZ, TS partnerships
Jan 7, 2016 19:15:17 GMT -5
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Post by lakers on Jan 7, 2016 19:15:17 GMT -5
www.newstimes.com/business/article/Mannkind-s-future-facing-doubts-6743705.php
Mannkind’s future facing doubts
By Dirk Perrefort Published 4:38 pm, Thursday, January 7, 2016
DANBURY — The future of 170 workers at MannKind’s manufacturing plant on Casper Street, which has already seen three rounds of layoffs in the past year, was called into question this week after the pharmaceutical company lost its marketing partner for the drug Afrezza.
“We are very concerned about the current situation there and the potential for job losses,” Danbury Mayor Mark Boughton said Thursday. “We’re also disappointed that the product hasn’t taken off the way it should. I just hope they can get things straightened out.”
Sluggish growth in sales of Afrezza, an inhalable form of insulin created by the company, and the loss of its marketing partner Sanofi for the drug has resulted in the company’s shares losing more than 90 percent of their value during the past 12 months. The stock dropped more than 50 percent in the past week alone after the failed Sanofi deal was announced.
Many analysts are questioning whether the company is headed for bankruptcy, having only enough cash on hand to make it through about half of next year before running out of funds. Some, including Piper Jaffray analyst Josh Schimmer, released revised notes this week downgrading their price targets for the stock to as low as 5 cents.
The company, which has invested heavily on a high-tech manufacturing facility near the city’s downtown, had plans to hire as many as 100 new employees locally that never materialized as MannKind moved to reduce costs in light of slower-than-expected sales.
While the manufacturing facility has the ability to support as much as $4 billion in sales annually, Afrezza revenues haven’t broken the $10 million mark since its market launch in February.
Juergen Martens, MannKind’s corporate vice president of operations who oversees the Danbury plant, declined to identify how many employees have been let go this year during the three rounds of layoffs, but noted that production has been brought in line with current sales levels.
“When the sales forecasts weren’t met, we certainly adjusted the manufacturing level,” he said. “What we have now is a balance between manufacturing capacity and sales.”
While limited, the company does have some options moving forward.
Matt Pfeffer, MannKind’s chief financial officer, said this week that Sanofi’s exit, which included exclusive rights to Afrezza, allows the company to seek other licensing and distribution partners for the drug. But how successful that could be in light of Sanofi’s departure remains in question.
“At this point, we are skeptical that MNKD can find a new commercial partner for Afrezza given the stark failure of SNY’s efforts, even if they were halfhearted,” Schimmer wrote in a research note this week.
Keith Markey, an analyst with Griffin Securities who is bullish on the stock, said company executives have discussed using individual partners for different regions such as Europe and the Middle East before partnering with Sanofi to distribute and market the drug globally. He believes that’s one route the company is likely investigating in the future.
“They can go out and get new partnerships and those can often come with some upfront money,” he said. “While I don’t expect the payment to be as large as Sanofi (which paid MannKind $150 million at the beginning of the deal last year), if they can partner with some smaller regional companies it could help their cash position.”
And while MannKind could also decide to market the drug itself, that could come with additional operating costs, Markey noted, unless it brought in a separate sales team that works on a commission-only basis. The analyst, however, said he finds that scenario unlikely.
Pfeffer noted earlier this week that the company is also looking to renew marketing plans for Afrezza with a focus on doctors and patients.
Sanofi has been criticized by stockholders and analysts for dragging its feet when it comes to marketing Afrezza and seeking reimbursement from insurance companies. While there has been some momentum on insurance reimbursements in recent months, the problem remains an issue.
“Sanofi did a rather weak job getting the drug to market,” Markey said.
He and other analysts have noted that political wrangling inside Sanofi, a French pharmaceutical giant, could have led to the company’s weak performance with the drug. Sanofi replaced its chief executive officer, Christopher Viehbacher, who had been a champion of Afrezza, with Olivier Brandicourt in February.
“It’s probably what contributed to final decision and the behavior of not marketing the drug,” Markey said.
MannKind has also brought a new chief executive officer on board, announcing in recent weeks that pharmaceutical veteran Duane M. DeSisto, replacing Hakan Edstrom who left the position as part of a planned departure in November.
And while Afrezza is the only drug that MannKind has on the market today, executives have hopes for the proprietary Technospere particle that allows Afrezza to deliver the insulin to the lungs. The particle can be used to deliver a variety of other medications, including pain drugs, when quick absorption is necessary.
Pfeffer has already said the company is in a variety of talks with other drug companies about developing meaningful partnerships for the particle.
“Granted most of the work on the particle is in the preclinical stage, so while they aren’t going to raise a lot of money if it’s licensed out, I do expect they could get some kind of licensing deal in the next nine months,” he said.
More will become apparent in the coming weeks, Pfeffer said, as the new chief executive officer begins to roll out the company’s plans for the future. More details about the company’s plans are also expected next week when executives will also be taking questions during the JPMorgan health care conference in San Francisco on Wednesday.
“MannKind has an exception product and I have every reason to believe they’ll find a viable partner that will help make Afrezza and future drugs successful,” said Stephen Bull, president of the Greater Danbury Chamber of Commerce. “This week was certainly a setback, but I look forward to them doing well and promoting a product that is very much needed.”
dperrefort@newstimes.com
Mannkind’s future facing doubts
By Dirk Perrefort Published 4:38 pm, Thursday, January 7, 2016
DANBURY — The future of 170 workers at MannKind’s manufacturing plant on Casper Street, which has already seen three rounds of layoffs in the past year, was called into question this week after the pharmaceutical company lost its marketing partner for the drug Afrezza.
“We are very concerned about the current situation there and the potential for job losses,” Danbury Mayor Mark Boughton said Thursday. “We’re also disappointed that the product hasn’t taken off the way it should. I just hope they can get things straightened out.”
Sluggish growth in sales of Afrezza, an inhalable form of insulin created by the company, and the loss of its marketing partner Sanofi for the drug has resulted in the company’s shares losing more than 90 percent of their value during the past 12 months. The stock dropped more than 50 percent in the past week alone after the failed Sanofi deal was announced.
Many analysts are questioning whether the company is headed for bankruptcy, having only enough cash on hand to make it through about half of next year before running out of funds. Some, including Piper Jaffray analyst Josh Schimmer, released revised notes this week downgrading their price targets for the stock to as low as 5 cents.
The company, which has invested heavily on a high-tech manufacturing facility near the city’s downtown, had plans to hire as many as 100 new employees locally that never materialized as MannKind moved to reduce costs in light of slower-than-expected sales.
While the manufacturing facility has the ability to support as much as $4 billion in sales annually, Afrezza revenues haven’t broken the $10 million mark since its market launch in February.
Juergen Martens, MannKind’s corporate vice president of operations who oversees the Danbury plant, declined to identify how many employees have been let go this year during the three rounds of layoffs, but noted that production has been brought in line with current sales levels.
“When the sales forecasts weren’t met, we certainly adjusted the manufacturing level,” he said. “What we have now is a balance between manufacturing capacity and sales.”
While limited, the company does have some options moving forward.
Matt Pfeffer, MannKind’s chief financial officer, said this week that Sanofi’s exit, which included exclusive rights to Afrezza, allows the company to seek other licensing and distribution partners for the drug. But how successful that could be in light of Sanofi’s departure remains in question.
“At this point, we are skeptical that MNKD can find a new commercial partner for Afrezza given the stark failure of SNY’s efforts, even if they were halfhearted,” Schimmer wrote in a research note this week.
Keith Markey, an analyst with Griffin Securities who is bullish on the stock, said company executives have discussed using individual partners for different regions such as Europe and the Middle East before partnering with Sanofi to distribute and market the drug globally. He believes that’s one route the company is likely investigating in the future.
“They can go out and get new partnerships and those can often come with some upfront money,” he said. “While I don’t expect the payment to be as large as Sanofi (which paid MannKind $150 million at the beginning of the deal last year), if they can partner with some smaller regional companies it could help their cash position.”
And while MannKind could also decide to market the drug itself, that could come with additional operating costs, Markey noted, unless it brought in a separate sales team that works on a commission-only basis. The analyst, however, said he finds that scenario unlikely.
Pfeffer noted earlier this week that the company is also looking to renew marketing plans for Afrezza with a focus on doctors and patients.
Sanofi has been criticized by stockholders and analysts for dragging its feet when it comes to marketing Afrezza and seeking reimbursement from insurance companies. While there has been some momentum on insurance reimbursements in recent months, the problem remains an issue.
“Sanofi did a rather weak job getting the drug to market,” Markey said.
He and other analysts have noted that political wrangling inside Sanofi, a French pharmaceutical giant, could have led to the company’s weak performance with the drug. Sanofi replaced its chief executive officer, Christopher Viehbacher, who had been a champion of Afrezza, with Olivier Brandicourt in February.
“It’s probably what contributed to final decision and the behavior of not marketing the drug,” Markey said.
MannKind has also brought a new chief executive officer on board, announcing in recent weeks that pharmaceutical veteran Duane M. DeSisto, replacing Hakan Edstrom who left the position as part of a planned departure in November.
And while Afrezza is the only drug that MannKind has on the market today, executives have hopes for the proprietary Technospere particle that allows Afrezza to deliver the insulin to the lungs. The particle can be used to deliver a variety of other medications, including pain drugs, when quick absorption is necessary.
Pfeffer has already said the company is in a variety of talks with other drug companies about developing meaningful partnerships for the particle.
“Granted most of the work on the particle is in the preclinical stage, so while they aren’t going to raise a lot of money if it’s licensed out, I do expect they could get some kind of licensing deal in the next nine months,” he said.
More will become apparent in the coming weeks, Pfeffer said, as the new chief executive officer begins to roll out the company’s plans for the future. More details about the company’s plans are also expected next week when executives will also be taking questions during the JPMorgan health care conference in San Francisco on Wednesday.
“MannKind has an exception product and I have every reason to believe they’ll find a viable partner that will help make Afrezza and future drugs successful,” said Stephen Bull, president of the Greater Danbury Chamber of Commerce. “This week was certainly a setback, but I look forward to them doing well and promoting a product that is very much needed.”
dperrefort@newstimes.com
