MannKind, NASDAQ:MNKD, management presented a the Morgan Stanley Global Healthcare Conference to answer questions. When asked what they thought about the MNKD deal with Sanofi would yield, the company stated that the 65/35 profit sharing deal with Sanofi will bring in a yield equal of a 25% royalty and with several advantages.
One advantage is that the deal is for Afrezza as a product for life not just for the time span of the patent. This is notable and important because the history of other insulin patents like Novolog and Humalog show that they generally continue to be sold as premium prices far after the patents were due to expire. Another advantage is that the terms of the agreement means that Sanofi, NYSE:SNY with be fronting MNKD’s research and development costs meaning MNKD won’t have to issue more shares. Shareholders should feel more secure this way.
The second big advantage is that the tests are done for the 12 unit cartridge that the company expects to submit for approval soon. The plan is to have these large cartridges on time for the product launch. This is important because most sufferers of Diabetes Type 2 should be using doses that will range between 12-36 units per meal. Benefits here are obvious with the need for fewer to fill a prescription. Being able to produce larger cartridges means that patients can be better served with the same production capacity.
MNKD might also produce cartridges with smaller does than are out on the market now. This seems certain because the FDA had asked for a past approval pediatric study that involved children as young as four years of age. At that age, with diabetes generally have Type 1 diabetes thus using much smaller doses of insulin than adults. Those doses range from ½ to 1 unit. Afrezza has a smallest cartridge of 4 units. That’s too much for small children so someone like MNKD had to come up with a solution.
Production of Afrezza is due for the first quarter of 2015. That’s what Sanofi says. As they want MNKD to buy a greater amount of insulin so that there won’t be a shortage given these predictions. In addition to all this, there are expectations to apply the technosphere technology to other drugs but due to constraints on manufacturing capacity the challenge would be to figure out which drug candidates would be the most worth utilizing.
