|Pierre Chancel, Sanofi senior vice president diabetes division|
MannKind has finally nailed down the major league pharma player it always wanted to roll out its inhaled insulin product Afrezza. But after going it alone to nail down an FDA approval on a new therapy that continues to generate heavy skepticism about its marketing potential, the numbers involved so far are still strictly minor league.
Sanofi ($SNY), a company which has extensive experience in successfully marketing diabetes therapies, is putting down an upfront payment of $150 million to take charge of the treatment in a profit-sharing arrangement, with $775 million up for grabs in sales and development milestones while the pharma giant "advances" MannKind ($MNKD) its $175 million share of the collaboration's expense.
Larger numbers than that are common in late-stage deals, and Afrezza has its approval in place--with regulatory restrictions on its use. That $150 million upfront indicates a lack of interest among the big players that dominate the diabetes market and compete ferociously for every slice of market share. The real potential payoff, if there is one, will come through MannKind's 35% share of the business as both companies split up the losses and profits.
If any company can make a go of it, Sanofi stands as a clear favorite. Its diabetes franchise is built around Lantus, which generates $8 billion in annual sales. Sanofi has submitted U300--to be marketed as Toujeo--as a new-and-improved upgrade on Lantus while Lilly ($LLY) and others have been positioning biosimilars to swoop in after Lantus loses patent protection early next year. That patent loss should help provide plenty of motivation to Sanofi to make the best of Afrezza, which MannKind believes can succeed where Exubera failed so badly.
|MannKind CEO Al Mann|
Peak sales estimates for Afrezza tend to cluster around the $600 million mark, with some analysts projecting more than twice that amount and others expecting far less.
"Afrezza is an innovative drug-device combination product consisting of a dry formulation of human insulin delivered through a small, discreet inhaler," said Pierre Chancel, Sanofi senior vice president diabetes division. "Afrezza is a further addition to our growing portfolio of integrated diabetes solutions. It is uniquely positioned to provide patients with another insulin therapy option to manage their diabetes but does not require multiple daily injections."
MannKind's share price had been falling steadily as speculation over a diabetes partner grew in recent weeks. Sanofi fits the profile that MannKind needed in a business partner. Now it will have to wait and see just how effective the treatment is in grabbing market share.
- here's the release