Don’t do it Olivier
This morning we suggested that it’s time for Olivier Brandicourt CEO of that three ring circus known as Sanofi (NYSE:SNY) to put an end to the Afrezza saga and terminate the company’s partnership with MannKind (NASDAQ:MNKD). This makes so much sense but it will effectively take away some of the best entertainment Diabetic Investor has had since well Exubera. Seriously we just have too much funny reading how the Afrezza and MannKind zealots continue to stand by their belief that Afrezza is the greatest thing to happen to diabetes since the discovery of insulin.
The latest source of entertainment comes from Joshua Rodriguez. Just in case anyone has forgotten Josh is the founder of CNA Finance and big supporter of MannKind. Today Josh writes the following;
“There’s no doubt that the bears have an incredibly valid argument. However, that doesn’t discount the fact that the bulls also have a valid argument; and in my opinion, their argument is far stronger. The reality is that in pre-market phase, insurance coverage isn’t quite there, and sales aren’t a major expectation. Instead, the bulls are looking for MNKD to get advertising and coverage in line; and if you’ve been watching the details, you know that they’re doing a great job of it.
First and foremost, insurance coverage is going incredibly well. As Clinically Sound Investor pointed out on Seeking Alpha, MannKind is starting to realize coverage for Afrezza. As a matter of fact, in the article mentioned above, the author pointed out that three of the top five insurers and more than half of the top twenty insurers have some sort of coverage for Afrezza and that only 2 insurers out of the top twenty five have completely left Afrezza out. The bottom line here is that MannKind and its investors know that with insurance will come sales; and insurers are starting to cover the product.
Also, it’s important to remember that marketing is on the way. While sales are down at the moment, one of the biggest reasons for this is consumer awareness. However, consumer awareness of the treatment is going to start spiking relatively soon as well. The company has mentioned that the Direct to Consumer phase will be the next step and that this step will be taken relatively soon. So, soon we’ll be seeing Afrezza advertised; which will also likely pick sales up.
Finally, MannKind isn’t just focusing on the United States market. As a matter of fact, the company is now working to achieve regulatory approval in Europe and Asia. Considering the strength behind the product and the company’s ability to get it approved in the United States, approval in other regions is all-but-guaranteed. As a matter of fact, during the Q2 earnings call, MNKD had great news to offer about the process. Ultimately, MNKD will likely realize regulatory approval in Europe at the very least relatively soon.”
Being unfamiliar with the impressive sounding Clinically Sound Investor we checked out their bio which states;
“The Clinically Sound Investor is a pharmacist for a large retail corporation, with a PharmD and a BA in psychology. Fascinated by watching the rise of Walmart and Apple after 2008, he now follows the advice “know thyself” and puts expertise of understanding scientific literature to research biotechnology stocks. His investments early on were driven by binary events such as FDA Advisory Committee meetings and PDUFA dates (approvals). Despite initial successes, there were too few of these events, so he expanded into predicting Phase II/III trial results.”
Before we go on here it strikes Diabetic Investor after reading these bios that any idiot can write a blog and many have, but we digress.
Anyway we read what this distinguished pharmacist had to say and came to this conclusion, we sure hope he fills prescriptions better than he analyzes stocks for if he doesn’t patients better beware. Yes it’s true that the Afrezza is covered by payors, this has never been in dispute. The issue isn’t that Afrezza is not covered, the issue is at what level or tier it’s covered at. One just might think that Josh would have closely read the list contained in the piece by our friendly pharmacist. He just might have noticed that as we’ve been stating formulary coverage for Afrezza sucks.
But Josh didn’t stop there, no just to prove that he doesn’t know Jack, Jill or squat he mentions how the direct to consumer ad campaign will increase sales. Honestly it amazes Diabetic Investor how these people have put so much faith in a DTC campaign. As if this campaign will be so damn amazing that all the other issues with Afrezza will magically go away.
Frankly we can’t wait for when this DTC fails to improve sales. What will these people do blame poor sales on El Nino.
Yet Josh conclusively proves that it’s better to be thought a fool than to open your mouth and remove all doubt when he states that Afrezza will be a hit in overseas markets. Perhaps the dumbest sentence ever written came when Josh writes; “Considering the strength behind the product and the company’s ability to get it approved in the United States, approval in other regions is all-but-guaranteed.” Anyone who has followed Afrezza knows that getting it approved here in the US was anything but easy.
Yet to state that “approval in other regions is all-but-guaranteed” shows that Josh might want to consider doing something else. Seriously anyone with a clear mind knows that the drug approval process no matter where it’s done is never easy, that nothing is “guaranteed” not by a longshot.
Now Diabetic Investor does not wish to cast aspersions on Josh or our friendly pharmacist but honestly these people really need to move on and begin writing about a subject they actually know something about. As based on what they written about Afrezza it’s obvious they know nothing about the business of diabetes. Like so many MannKind zealots and Afrezza supporters they conveniently ignore the issues with Afrezza and overhype just what Afrezza really is, nothing more than a niche product.
Still we do enjoy the entertainment and as such have a request from Olivier. Yes we know that the MannKind partnership should end. We perfectly understand why it’s a very sound business decision to move on from this disaster before it turns into a multi-billion dollar nightmare. We understand that the Sanofi diabetes franchise is circling the bowl, that major changes are needed. However please don’t do what should be done as you would be depriving Diabetic Investor some of the best material ever. That you would be depriving our many loyal subscribers of some the best copy ever written.
Seriously Olivier don’t deprive so many people of a hearty belly laugh, continue working with MannKind. After all what’s a few billion dollars for a company like Sanofi?