To say that sales of biotech MannKind’s inhaled insulin powder Afrezza have been poor is a major understatement. That’s why it’s not too surprising that pharma major Sanofi has terminated it’s licensing agreement with MannKind for Afrezza. The firms announced the termination of the license and collaboration agreement for Afrezza on Tuesday, January 5th.
According to the statement, MannKind is reviewing its strategic options for Afrezza as a result of the termination of the licensing deal, and will hold a conference call at 4:30 pm ET on January 5, 2016 to update investors and other interested parties on their plans.
Mannkind shares are down by more than a third to 96 cents a share as of 10 PM ET Tuesday.
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The Tuesday statement also notes that the firms have already undertaken transition discussions in order to ensure a “smooth and orderly transition in the development and commercialization of Afrezza from Sanofi to MannKind over the next 90 – 180 days.”
Of interest, termination of the license agreement in its entirety will occur no later than six months from the effective date of Sanofi’s notice of termination, or July 4, 2016.
Sanofi spokesman Jack Cox said that the company ended the agreement because of “low level of prescriptions despite our substantial efforts.” He pointed out that Afrezza prescriptions never even met “modest expectations,”
Cox also noted marketing expenses from Afrezza were anticipated to remain “very high.”
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MannKind Chairman Alfred Mann spent $1 billion and more than a decade to win the approval of Afrezza, and it was the biotech’s first product to reach the market. He persisted even after U.S. regulators twice rejected the therapy and other healthcare experts expressing worries about lung function from inhaled insulin
Mann is on tap to be replaced this week as CEO by Duane DeSisto, the ex-CEO of insulin pump maker Insulet Corp. Mann had become interim CEO late last year after Hakan Edstrom resigned.
Analysts point out that Sanofi ponied up $150 million for the rights to Afrezza in August 2014, a few weeks after it won FDA approval in the U.S., and also agreed to pay an additional $775 million if the new medication met sales and development targets.
MannKind only sold $17.1 million worth of Afrezza during the first three quarters 2015, a total that includes $4.1 million in the third quarter recorded as deferred product sales. The firm reported a $14.7 million loss on its portion of the Sanofi deal.