Therapeutic vs. Financial

Therapeutic vs. Financial

As the debate continues to rage over the future of Afrezza, it’s time to add a new dimension. Time to give the MannKind (NASDAQ:MNKD) supporters something new to chew on. Considering that Sanofi (NYSE:SNY) has yet to report any results for Afrezza much of the information on how Afrezza is doing comes from people talking with Afrezza users or reading reviews posted by these users. In addition to doing this Diabetic Investor has spoken with several well respected endocrinologists to gain their insight.

Here is what we have learned- first as we have stated consistently Afrezza is not a bad drug, it does work. Secondarily as we have stated there is a market for this drug, there is a subset of patients who will use Afrezza. Like we said this is old news. The wrinkle comes with how Afrezza will do commercially vs. therapeutically.

Reviewing our notes from the conversations we have had with patients who actually have been using Afrezza and rereading the posted reviews it struck us that these early adopters are not the norm. No these people aren’t psycho or delusional nothing like that. Rather they are patients who are actively engaged with their diabetes. Patients who are well educated when it comes to how they should be managing their diabetes. In short they get it when it comes to diabetes management.

The problem is these patients are not in the majority, sadly the majority of patients with diabetes are not actively engaged with their diabetes management. For one reason or another they are not as educated in diabetes management as they should be. It’s not like they don’t grasp that diabetes is a serious condition rather as we have said a thousand times they want to live their lives with and NOT for their diabetes. They know diabetes is part of their lives but they don’t want diabetes management to run their lives. Simply put they are normal everyday patients who have regular lives but also have diabetes.

Regular readers of Diabetic Investor should be well versed in the dynamics of being an insulin using patient. The additional demands this places on the patient. Again as we have said a million times diabetes management is 24 hour per day, 7 day per week, 365 days per year job with no days off. Bottom line diabetes management is work and the simple fact is not every patient is willing do the heavy lifting.

Insulin management adds to the work load requiring patients not just to monitor their glucose levels regularly but to understand things like proper carb counting, duration of action, time to action, insulin on board and target glucose levels.

It’s also true that not every insulin using patient has the same objectives. While a minority of patients practice intensive insulin management, keeping their glucose levels in a tighter range and HbA1c at 7 or below. The majority don’t. They don’t watch everything they eat, exercise regularly or actively reach out to a Certified Diabetes Educator (CDE) or physician for help. They don’t understand or care about the many nuances of insulin therapy. Like we said they normal everyday folk who happen to have diabetes.

A recurring theme from the existing Afrezza patients is how much work they have put in. How they have been experimenting with when and how much Afrezza they are taking. How they have worked around some of Afrezza limitations, i.e. what to do when they know they need just 2 units of insulin when the smallest Afrezza package is 4 units. How to adjust their pump settings, yes there are insulin pump patients using Afrezza. Or for patients on multiple daily injection therapy (MDI) adjusting the amount of Lantus they take each day. Put simply they are working very hard at their diabetes management and quite frankly it’s not surprising they had a positive experience with Afrezza.

While Diabetic Investor completely understands this MannKind supporters mistakenly believe that Afrezza will achieve blockbuster status given these positive patient experiences. That the majority of insulin using patients will use Afrezza because they actively engaged patients like it. They seem to believe that these positive reviews will make up for poor formulary coverage or the fact that physicians have to add pulmonary function tests for Afrezza patients. They seem to believe that since a small minority of patients like Afrezza every insulin patient will want it.

We should also note that not every patient review has been positive and many who have used Afrezza don’t like it. Again this is not unexpected as Momma Kliff used to say some people like apples others like oranges.

What this really comes down to is perspective Diabetic Investor is not looking at Afrezza from a therapeutic perspective rather whether the drug will be commercially successful. We care about Sanofi’s dismal track record for any diabetes product not named Lantus. We care about how sales rep complain how physicians just aren’t interested in prescribing Afrezza. We know the commercial impact of poor formulary placement has on sales. We understand how the required pulmonary function tests adversely impact prescriptions. We understand that physicians are a conservative bunch loath to prescribe any new drug. Finally from speaking with these physicians we know that the Exubera hangover is very real and also limiting prescriptions.

Diabetic Investor is not confusing the therapeutic aspects of Afrezza with the commercial aspects of Afrezza. These are two vastly different perspectives, the problem is the MannKind supporters don’t separate the therapeutic aspects from the commercial aspects. Diabetic Investor has been down this road many times before. We have seen investors go gaga over a product and/or drug based on the reviews of a handful of patients. Patients which don’t fall into the majority.

Yes therapeutic benefits are a factor in whether a drug is commercially successful but only one piece of a very complex puzzle. Based on the data we’ve seen, research we have done and knowledge of this wacky world, when it comes to Afrezza all the pieces of the puzzle paint a very clear picture. Afrezza is nothing more than a niche product that will be used by a minority of patients. It is not the blockbuster MannKind supporters think it is and this is not good news for Sanofi or anyone who’s long MannKind.