Bad News for Astra and MannKind

Bad News for Astra and MannKind

According to several news reports Express Scripts, the largest U.S. pharmacy benefit manager, said on Friday that it would exclude about 20 new medications in 2016 from insurance coverage, including two diabetes drugs and a weight loss drug. Among the drugs excluded was Onglyza from AstraZeneca (NYSE:AZN) a drug which racked by nearly $400 million in sales the first half of this year.

Although Express Scripts did not reveal the reasons for this move, Diabetic Investor has reached out to the company but has yet to hear from them, we see a combination of reasons. First Onglyza is just one of several DPP4’s currently on the market. A market dominated by Merck’s (NYSE:MRK) Januvia. Second recent study data related to Onglyza’ s cardiovascular outcomes may lead to unfavorable changes to the drugs label. Simply put Express Scripts didn’t need Onglyza as their patients have a plethora of options in this category.

MannKind (NASDAQ:MNKD) also got some bad news fresh on the heels of a very bad week, a week in which shares declined over 13%.  According to several published reports RBC Capital lowered their price target for MannKind from $10 to $9 with analyst Adnan Butt stating; “Sales are up but still not at levels we would consider material for a franchise that could be a blockbuster, in our view.” While RBC maintained an Outperform rating for the stock their enthusiasm has obviously been impacted by Afrezza’s poor performance for the first half of 2015.

In addition to this news Diabetic Investor has learned that MannKind’s partner Sanofi (NYSE:SNY) has just posted a new job opening as they are looking for …wait for it … a marketing manager for Afrezza. Now keep in mind this very important position is being filled just as the company has begun their much ballyhooed direct to consumer advertising campaign. A campaign which MannKind and Afrezza supporters believe will finally create awareness for the drug and ultimately translate into more scripts being written.

Listen we know we’ve been hard on our wine drinking friends in France and honestly we wish we could write something positive about the company. But seriously that’s hard to do when the company continues to screw up on a daily basis. Looking to fill a key marketing position just when a DTC campaign begins is like telling the passengers of the Titanic, the one’s fortunate enough to make it into a lifeboat, that there are icebergs in the water so they better be careful. Honestly you just can’t make this stuff up.

Which brings us to one of the greatest comments we’ve ever seen on Afrezza as in his report RBC analyst Butt states; “However, we believe partner SNY’s commitment is the most important driver long-term though prescription growth is equally important.” Really prescription growth is important while thank you Mr. Butt we would have never known that had you not mentioned it. Like we said you just can’t make this stuff up.