MannKind Corporation: What’s The Market Potential For Afrezza Outside The U.S.?

MannKind Corporation: What’s The Market Potential For Afrezza Outside The U.S.?
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MannKind Corporation (NASDAQ:MNKD) is expected to launch its Afrezza in the U.S. in the first quarter of 2015. The company has partnered with Sanofi SA (ADR) (NYSE:SNY) (EPA:SAN) to market its diabetes drug. Notably, MannKind shares had plunged over 12% the day after MannKind announced its deal with Sanofi. Many investors were concerned whether Sanofi was the right partner for the California-based biopharmaceutical company.

Sanofi working to optimize its broader diabetes portfolio

Goldman Sachs analyst Jay Olson said in a research note that the French company has extensive experience selling diabetes treatments. Its blockbuster Lantus drug generated more than $7 billion in sales last year. The two companies have clear objectives with respect to the commercialization of Afrezza. However, Sanofi will naturally focus on optimizing its diabetes portfolio as Lantus is set to go off-patent soon. Meanwhile, MannKind is completely focused on Afrezza.

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The French company has been building a broad portfolio of diabetes treatments including Afrezza, Lyxumia and Toujeo (an improved variant of Lantus). The research firm said Sanofi is in the driver’s seat for commercialization of Afrezza. It will have an upper hand in deciding how much time, money and effort should be put into the commercialization of MannKind’s drug. Olson noted that the French company has the capability to optimize Afrezza’s performance in the U.S. as well as international markets.

MannKind’s Afrezza is yet to be filed in the EU and Japan

So far, almost all the commercial and regulatory work has been focused on the U.S. market. So, what’s the market potential for the drug outside the U.S.? Well, MannKind is yet to file Afrezza in the European Union and Japan, which creates uncertainty around those milestones. However, Sanofi’s strong presence in global diabetes market could help MannKind in these markets. Goldman Sachs forecasts Afrezza’s international sales to peak at $700 million in FY2020.

Goldman Sachs initiated coverage of MannKind this past Monday with a Neutral rating and $6 price target. The research firm doesn’t expect MannKind to become profitable before FY2018. Olson’s earnings estimate for 2018 for MannKind is about 70% below the Wall Street consensus.

MannKind shares inched up 0.14% to $5.66 at 1:08 PM EDT on Friday.

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