Putting Humpty Dumpty Back Together

Putting Humpty Dumpty Back Together

This morning MannKind (NASDAQ: MNKD) issued a press release which stated among other things –

  • A new 30-day titration pack combining 90 4-unit cartridges and 90 8-unit cartridges, allowing patients greater flexibility to adjust their dose as they learn how to titrate Afrezza.
  • MannKind Cares, a patient reimbursement support program.
  • A new and enhanced copay assistance program.
  • Creation of an opportunity for physician offices to purchase in-office spirometers, allowing them to perform pulmonary function testing during the patient visit.
  • A speakers bureau to educate healthcare providers about Afrezza.

Now with full responsibility for Afrezza the company is desperately trying to put Humpty Dumpty back together again. Even more critical is generating sales before the company runs out of money. Basically this is race against time with the water rising around them MannKind is doing whatever they can to remain afloat. The question is can they can avoid the impending doom that lies ahead and by some miracle survive or will the water eventually overcome them and sink the ship?

After reading various reports it seems as if the free fall in Afrezza prescriptions, after Sanofi (NYSE: SNY) cut ties with the product, has for the moment stabilized. However, on the flip side there is no evidence to suggest that scripts are accelerating either.  To Diabetic Investor this signals that Afrezza has a small core audience which is very loyal to the product. This in essence is the problem with Afrezza, as we noted numerous times the problem has never been whether the drug works, it does. The problem is getting enough patients to use it.

Herein lies an even bigger problem for MannKind all the programs they are using to accelerate growth eat into the already slim margins the product generates. Worse still is passage in the press release which states – “While Afrezza is currently covered by commercial payers representing 70% of covered lives, many health plans still require a prior authorization.” Even with the steps the company is putting in place to help patients any additional steps at getting coverage only hamper growth. Same goes for co-pay assistance programs which only eat further into margins.

Keep in mind that based on past statements the company is also lowering the price for Afrezza, something that will please payors but again only cuts even further into margins.

The way we see it these efforts are noble but in the end won’t save the day. That all the king’s horses and all the king’s men cannot put Humpty Dumpty back together again.