The Return of Inhaled Insulin
This morning MannKind (NASDAQ:MNKD) announced the FDA will review the company’s application for its experimental inhaled insulin Afresa. Not surprisingly shares of MannKind are up on the news. While Diabetic Investor understands why the shares are up, the more important question is; What happens if the drug is approved? Or put another way can Afresa succeed in the market?
Granted Afersa has several advantages over Exubera which was pulled from the market and ultimately cost Pfizer (NYSE:PFE) $4 billion, still investors should not get their hopes up even if the FDA does approve Afresa. Here’s why:
1. Timing – Already awaiting approval at the FDA are two other drugs which would compete with Afersa, Liraglutide from Novo Nordisk (NYSE:NVO) and Byetta LAR from Amylin (NASDAQ:AMLN). Although Afersa is an inhaled form of insulin MannKind has publicly acknowledged that like Liraglutide and Byetta LAR they would target patients with type 2 diabetes. Unlike Liraglutide and Byetta LAR, Afersa at best is weight neutral and carries a higher risk of hypoglycemia.
2. It’s still Insulin- Besides the risk of hypoglycemia physicians are reluctant to move their type 2 patients to insulin therapy. Many believe this is mainly due to the fact insulin must be injected; this fact is only partially true. The reality is physicians understand that insulin therapy requires a greater degree of patient education which goes beyond just how to inject the insulin. Patients on insulin therapy need to regularly monitor their glucose levels understand the impact of food intake and the role outside factors such as stress and exercise play. Neither Liraglutide nor Byetta LAR comes with these additional educational requirements.
3. Type 1’s unlikely to switch- Looking at the type 1 market it’s unlikely a significant number of these patients will switch to Afersa. While there may a small portion of type 1’s who switch Diabetic Investor does not believe it would amount to more than 10% of type 1’s.
4. No partner – While MannKind continues to insist they are diligently working to obtain a partner the fact remains they still don’t have a partner. MannKind knows they can’t go it alone and it will take a major marketing and sales effort to make Afersa even a small success. Diabetic Investor considers it noteworthy that even with the drug before the FDA that no partnership agreement has been completed.
5. Exubera Hangover – Like it or not MannKind still must deal with the Exubera failure. As noted earlier Afersa is vastly superior to Exubera in almost every aspect but the fact remains that when physicians and patients here inhaled insulin they think Exubera.
This does not mean that there isn’t a market for Afersa should it receive FDA approval, there is. However when looking at market realities it would take more than Herculean effort for Afersa to be a major success. The fact is inhaled insulin is at best a niche product. Diabetic Investor has said it before and we’ll say it again the time for inhaled insulin has come and gone. There really isn’t much MannKind can do about this even if they can find a partner. As Aldous Huxley said; “Reality cannot be ignored except at a price; and the longer the ignorance is persisted in, the higher and the more terrible becomes the price that must be paid.”