Post by lakers on Sept 30, 2016 10:50:27 GMT -5
www.ajmc.com/journals/evidence-based-diabetes-management/2016/march-2016/mannkind-path-to-afrezza-survival-involves-lower-prices-to-woo-payers
MannKind: Path to Afrezza Survival Involves Lower Prices to Woo Payers
Did MannKind misjudge consumer demand, or are barriers from payers to blame for Afrezza's woes? A feature outlining the misfortunes and future plans for the only inhaled insulin on the market.
Published Online: March 15, 2016
Andrew Smith
MannKind Corp has been racing to reinvent itself since Sanofi backed out of a deal to market its inhalable insulin.1 However, the product remains in limbo. Until the companies can complete a complex transition, Sanofi maintains control over Afrezza. MannKind cannot market the drug, negotiate coverage with insurers, file for regulatory approval in new jurisdictions, or take any other steps to turn the notorious flop into the success that MannKind’s leaders still hope it can be.
Nonetheless, a flurry of announcements has kept the California-based company in the news, sometimes to the delight of investors and sometimes to their chagrin. In less than 3 months, MannKind’s founder left the board and passed away; it parted ways with 2 chief executives, attracted a class-action lawsuit, begun the hunt for a chief marketing officer, negotiated with potential international marketing partners, signed a deal that could be worth more than $100 million with a mysterious biotech, discussed potentially illegal short-selling with regulators, and announced its intention to win insurer coverage by lowering Afrezza prices.
“We learned many things in 2015, and those lessons will benefit us greatly as we look forward to launching our own strategies this year,” said CEO Matthew Pfeffer during a February 3, 2016, investor conference call,2 which provided the most detailed glimpse to date of his plans for the company. Pfeffer is the fourth man to run MannKind since November, when CEO Hakan Edstrom resigned after just 11 months on the job and founder and chairman Alfred Mann stepped in on a temporary basis.3 MannKind offered the post to Duane DeSisto, the former CEO of the insulin pump maker Insulet, but Insulet protested on grounds of a noncompete agreement. MannKind withdrew the offer4 just after DeSisto had started and offered the job to Pfeffer, who had been serving as the company’s chief financial officer and now fills both roles.
“The Afrezza transition is MannKind’s top priority, and it is getting the full attention it deserves,” Pfeffer told investors, noting the company’s particular focus on insuring continuity of supply for the few people who do use the drug. “The transition teams have been formed and include operations, scientific, and legal personnel from both MannKind and Sanofi. The teams have met and begun discussions about the complex process that a transfer like this involves. MannKind is targeting April 5 as the transition date for the rights to develop and commercialize Afrezza, but may request that Sanofi agree to a later date. “There are many factors that influence when the transition will occur, including a myriad of regulatory, commercial, and development activities, many of which involve third-party vendors or regulatory authorities, and all of which need to be transferred in a smooth and coordinated fashion,” Pfeffer said.
BRINGING PAYERS ON BOARD
MannKind’s basic plan for boosting Afrezza sales in the United States is to lower prices enough to get insurers to cover the product on favorable terms and then market it in unconventional ways rather than sending an army of sales representatives to doctors. Sanofi failed to get any major payer to include Afrezza on its standard formulary in 2015, even though the drug became available as a fast-acting prandial insulin for patients with type 1 diabetes (T1D) early in the year. Thus, nearly all would-be users needed to secure prior authorization from their doctors before they could get any coverage for the drug.
Both MannKind and outsiders who believe Afrezza can still be a big seller agree that securing widespread coverage is a necessary first step to success. Of course, lowering prices will hurt margins on existing sales, but Pfeffer hopes to offset the damage by launching Afrezza in some of the many foreign markets that will rapidly approve drugs that already have FDA approval. MannKind reports that it is already in talks with potential partners from a number of countries that could approve Afrezza without any additional trials. These partners would use their knowledge of the local market not only to shepherd Afrezza onto pharmacy shelves, but also to market it to doctors and patients. Thanks to the potential for fast approval, such partnerships could begin boosting Afrezza sales just months after they start, said Pfeffer, who noted that any substantial increase in sales volume would mitigate the effect of domestic price cuts on margins by allowing MannKind factories to operate more efficiently, thus reducing unit costs.
“Much of Afrezza’s future hinges on what kind of deals MannKind signs with companies in foreign markets,” Keith Markey, PhD, who follows MannKind for Griffin Securities, said in an interview with Evidence-Based Diabetes Management (EBDM). “If MannKind only signs a couple low-dollar deals, then it will struggle to offer Afrezza at competitive prices here and it will struggle to escape its current situation. If MannKind can generate significant near-term revenues from foreign deals, though, it will have a real chance of turning things around. Any real cash flow would ease fears about the company’s financial position and increase its ability to market Afrezza in the US. Significant extra sales would also create the sort of economies of scale that would allow MannKind to price Afrezza competitively and still profit on its US business.”
- See more at: www.ajmc.com/journals/evidence-based-diabetes-management/2016/march-2016/mannkind-path-to-afrezza-survival-involves-lower-prices-to-woo-payers#sthash.H9rpjub3.dpuf
MannKind: Path to Afrezza Survival Involves Lower Prices to Woo Payers
Did MannKind misjudge consumer demand, or are barriers from payers to blame for Afrezza's woes? A feature outlining the misfortunes and future plans for the only inhaled insulin on the market.
Published Online: March 15, 2016
Andrew Smith
MannKind Corp has been racing to reinvent itself since Sanofi backed out of a deal to market its inhalable insulin.1 However, the product remains in limbo. Until the companies can complete a complex transition, Sanofi maintains control over Afrezza. MannKind cannot market the drug, negotiate coverage with insurers, file for regulatory approval in new jurisdictions, or take any other steps to turn the notorious flop into the success that MannKind’s leaders still hope it can be.
Nonetheless, a flurry of announcements has kept the California-based company in the news, sometimes to the delight of investors and sometimes to their chagrin. In less than 3 months, MannKind’s founder left the board and passed away; it parted ways with 2 chief executives, attracted a class-action lawsuit, begun the hunt for a chief marketing officer, negotiated with potential international marketing partners, signed a deal that could be worth more than $100 million with a mysterious biotech, discussed potentially illegal short-selling with regulators, and announced its intention to win insurer coverage by lowering Afrezza prices.
“We learned many things in 2015, and those lessons will benefit us greatly as we look forward to launching our own strategies this year,” said CEO Matthew Pfeffer during a February 3, 2016, investor conference call,2 which provided the most detailed glimpse to date of his plans for the company. Pfeffer is the fourth man to run MannKind since November, when CEO Hakan Edstrom resigned after just 11 months on the job and founder and chairman Alfred Mann stepped in on a temporary basis.3 MannKind offered the post to Duane DeSisto, the former CEO of the insulin pump maker Insulet, but Insulet protested on grounds of a noncompete agreement. MannKind withdrew the offer4 just after DeSisto had started and offered the job to Pfeffer, who had been serving as the company’s chief financial officer and now fills both roles.
“The Afrezza transition is MannKind’s top priority, and it is getting the full attention it deserves,” Pfeffer told investors, noting the company’s particular focus on insuring continuity of supply for the few people who do use the drug. “The transition teams have been formed and include operations, scientific, and legal personnel from both MannKind and Sanofi. The teams have met and begun discussions about the complex process that a transfer like this involves. MannKind is targeting April 5 as the transition date for the rights to develop and commercialize Afrezza, but may request that Sanofi agree to a later date. “There are many factors that influence when the transition will occur, including a myriad of regulatory, commercial, and development activities, many of which involve third-party vendors or regulatory authorities, and all of which need to be transferred in a smooth and coordinated fashion,” Pfeffer said.
BRINGING PAYERS ON BOARD
MannKind’s basic plan for boosting Afrezza sales in the United States is to lower prices enough to get insurers to cover the product on favorable terms and then market it in unconventional ways rather than sending an army of sales representatives to doctors. Sanofi failed to get any major payer to include Afrezza on its standard formulary in 2015, even though the drug became available as a fast-acting prandial insulin for patients with type 1 diabetes (T1D) early in the year. Thus, nearly all would-be users needed to secure prior authorization from their doctors before they could get any coverage for the drug.
Both MannKind and outsiders who believe Afrezza can still be a big seller agree that securing widespread coverage is a necessary first step to success. Of course, lowering prices will hurt margins on existing sales, but Pfeffer hopes to offset the damage by launching Afrezza in some of the many foreign markets that will rapidly approve drugs that already have FDA approval. MannKind reports that it is already in talks with potential partners from a number of countries that could approve Afrezza without any additional trials. These partners would use their knowledge of the local market not only to shepherd Afrezza onto pharmacy shelves, but also to market it to doctors and patients. Thanks to the potential for fast approval, such partnerships could begin boosting Afrezza sales just months after they start, said Pfeffer, who noted that any substantial increase in sales volume would mitigate the effect of domestic price cuts on margins by allowing MannKind factories to operate more efficiently, thus reducing unit costs.
“Much of Afrezza’s future hinges on what kind of deals MannKind signs with companies in foreign markets,” Keith Markey, PhD, who follows MannKind for Griffin Securities, said in an interview with Evidence-Based Diabetes Management (EBDM). “If MannKind only signs a couple low-dollar deals, then it will struggle to offer Afrezza at competitive prices here and it will struggle to escape its current situation. If MannKind can generate significant near-term revenues from foreign deals, though, it will have a real chance of turning things around. Any real cash flow would ease fears about the company’s financial position and increase its ability to market Afrezza in the US. Significant extra sales would also create the sort of economies of scale that would allow MannKind to price Afrezza competitively and still profit on its US business.”
- See more at: www.ajmc.com/journals/evidence-based-diabetes-management/2016/march-2016/mannkind-path-to-afrezza-survival-involves-lower-prices-to-woo-payers#sthash.H9rpjub3.dpuf