Lots of wackiness going on

Lots of wackiness going on

The past few days has seen a flurry of news in the diabetes world. First the FDA has issued a warning for patients using an SGLT2. Between March 2013 and June 2014, the FDA received 20 reports of the drugs triggering ketoacidosis, in which levels of blood acids called ketones are too high. If untreated, ketoacidosis can lead to a diabetic coma or even death.

Drugs in this class include Invokana and Invokamet from Johnson and Johnson (NYSE:JNJ), Farxiga, Xigduo XR from AstraZeneca (NYSE:AZN), Jardiance and Glyxambi from Lilly (NYSE:LLY).

While it is too early to tell what impact this warning will have on new prescriptions it’s likely this warning will weigh heavily on the minds of physicians before putting patients on the drug. In their usual fashion the FDA did not indicate whether there would be any changes to the labels of these drugs or whether they would take any further actions. Still history tells us that this won’t be the last we here of this issue.

Our wine drinking friends in France also provided some news as Sanofi (NYSE:SNY) announced that David-Alexandre Gros, the company’s Chief Strategy Officer has decided to leave the company to pursue other opportunities. Mr. Gros was also a member of the company’s executive committee.

Gros becomes just the latest executive who was brought in by the now beheaded former CEO Chris Viehbacher to leave the company. Of all the hires Viehbacher brought in only Elias Zerhouni, head of research and development, and Chief Financial Officer Jerome Contamine remain with the company.

Although Olivier Brandicourt the new CEO has only been on the job for a short period of time it’s becoming obvious that the company is continuing to purge themselves from anyone who had ties to Viehbacher. This really should surprise no one as it’s not uncommon to see this type of turnover when a new CEO takes over. The real question isn’t whose leaving or why they are leaving, the real question is will the people brought in perform any better. Only time will tell.

In news connected to our French friends shares of MannKind (NASDAQ:MNKD) have been on a tear these past few days, rising 27% over the past five trading sessions. The catalyst for this move was a report issued by Jeffries which seemed to indicate that Afrezza prescriptions will pick up in the future.

Analyst Shaunak Deepak said Jefferies surveyed 56 endocrinologists and primary care physicians about their expected use of Afrezza for diabetes.

Deepak commented, “In screening physicians, we found that 35 percent did not know about Afrezza. Those that did, however, expected to use Afrezza more frequently than we had expected, especially among Type 1 diabetics.”

This report comes after MannKind experienced a series of downgrades by other analysts.

Now before everyone gets too excited here it’s important to note that Jeffries has always been rather bullish on MannKind. Back in August 2014 the company noted that Afrezza’s peak sales would reach $3.2 billion.  It should also be noted that there is huge difference answering survey question and real world prescribing patterns.

The fact is Afrezza is going to be what we said it will be all along, nothing more than a niche product. A fact which will become clearer and clearer with each passing quarter.