MannKind shares fell as much as 9.7% to $4.01 in early trading Thursday after Sanofi reported its second quarter results. The French drugmaker has partnered with MannKind to market its inhaled insulin Afrezza. Sanofi’s Q2 results show that Afrezza sales continue to lag, raising concerns about the drug’s potential. The two companies launched Afrezza in the U.S. market in late January.

MannKind Afrezza

Is MannKind’s Afrezza turning into a dud?

Sanofi sold only $2.2 million worth of Afrezza in the April to June quarter. It means the drug generated just $3.3 million in sales during the first half of this year. Sanofi had reported $1.1 million in Afrezza sales in the March quarter. That’s disappointing, considering some analysts expect its sales to reach $1 billion. MannKind’s inhaled insulin drug won USFDA approval in June 2014.

However, regulators require that all patients must go through lung function testing before the drug can be prescribed to them. Further, the drug cannot be used by smokers or those with lung disease. MannKind investors hope that a consumer marketing campaign will boost Afrezza sales. MannKind and Sanofi are gearing up to launch a mass marketing drive to raise awareness.

So far, word-of-mouth from early Afrezza users has been the biggest marketing push. Early users have taken to social media to spread the word about its effectiveness and ease of use. MannKind is expected to report its Q2 results early next month, which is when we will get to see exactly how much money the company is losing.

MannKind announces stock and debt deals

In related news, MannKind announced two new financing deals to repay about $100 million worth of debt. The company is raising $56.9 million via a discounted stock offering and $27.7 million through convertible debt. The Street described the deal as “death spiral” financing, saying that the stock-for-debt exchange was the “worst part” of the deal.

That’s because the exchange price of MannKind stock will be determined by the price of its shares over the next ten days. It means MannKind will be forced to give out more shares when the stock price declines. However, the Valencia-based company negotiated a floor price for the conversion that should mitigate some damage.

MannKind shares were down 5.41% at $4.20 at 11:33 a.m. Eastern on Thursday.