Sanofi's Diabetes Approach Stumbles
February 10 2016 - 3:02AM
Dow Jones News
(FROM THE WALL STREET JOURNAL 2/10/16)
By Denise Roland and Noemie Bisserbe
The history of inhalable insulins for diabetes care is full of
disappointments, but Sanofi SA thought a new approach would turn
all of that around. It was wrong.
The French drugmaker last month ended a licensing pact with
MannKind Corp. for the rights to sell the insulin inhaler Afrezza,
saying that despite substantial marketing efforts, the product was
unlikely to reach even the lowest patient levels anticipated. The
product, launched in the U.S. in February last year, notched just 7
million euros ($7.8 million) in sales in 2015, as safety concerns
and reimbursement issues damped uptake.
Sanofi's bet on inhaled insulin shows the strain pharmaceutical
chiefs are under to acquire innovative products when their own
pipelines aren't delivering. It came at a tough time for the
company's all-important diabetes franchise, which has been forced
to offer deeper discounts on its products amid pricing pressure
from U.S. payers.
On Tuesday, Sanofi said sales of its diabetes drugs in the U.S.
slumped 25% at constant exchange rates to 1.1 billion euros in the
fourth quarter, dragging world-wide revenue from the diabetes
franchise down 13% to 1.9 billion euros. That weighed on total
sales, which came in at 9.3 billion euros, a drop of 1.6% on a
constant currency basis; including currency effects, revenue rose
2.3%. Profit slid 75% to 334 million euros, while business net
income, which excludes certain one-time items, fell 7% to 1.7
billion euros.
Sanofi Chief Executive Olivier Brandicourt had been down the
inhaled-insulin path before. Nearly 10 years ago, he presided over
themultibillion-dollar flopof insulin inhaler Exubera as head of
metabolic and cardiovascular medicine at Pfizer Inc. Shortly after,
Novo Nordisk A/S and Eli Lilly & Co. shelved advanced plans to
develop their own inhaled products.
The failure of Exubera was, in large part, one of design:
Diabetes patients were reluctant to use the unwieldy device in
public as it resembled a bong for smoking marijuana.
But others saw more fundamental reasons to scrap the idea. Novo
Nordisk said at the time that it couldn't overcome the fact that
inhaled insulin wouldn't eliminate the need for injections. That is
because only short-acting insulin, which is taken as a boost at
mealtimes, could be administered via an inhaler. Most diabetes
patients on insulin -- those with Type 1 or advanced Type 2 -- also
take a long-acting version to provide a constant minimum level,
which would need to be injected.
Furthermore, doctors are cautious about prescribing inhaled
insulin because of worries it could lead to lung cancer in the long
term, said Simon O'Neill, director of health intelligence at
Diabetes UK, a nonprofit patient-advocacy group. While there is no
evidence that inhaled insulin causes lung cancer, other so-called
growth hormones have been linked to the disease.
Despite the industrywide retreat from inhaled insulin, former
Sanofi CEO Christopher Viehbacher believed the advantages of
inhaled insulin -- speedier delivery to the bloodstream and a
reduced dependence on needles -- meant it was still worth a bet. In
2014, he agreed to pay MannKind up to $925 million, mostly in
milestone payments, for the rights to market the recently approved
Afrezza. By ending the agreement when it did, Sanofi capped its
2015 losses at roughly 200 million euros, according to the
company.
Analysts have predicted that without the support of Sanofi,
MannKind would end up in bankruptcy. Nonetheless, the Valencia,
Calif., company's new CEO, Matthew Pfeffer, has vowed it is "here
to stay." After the break with Sanofi, he told investors he planned
to cut the price of Afrezza and find a new partner for the product,
adding that MannKind had enough cash to get "comfortably into the
second half of the year."
Existing worries among doctors over links with lung cancer were
compounded by the U.S. Food and Drug Administration's warning that
inhaled insulin could cause breathing difficulties in people with
respiratory problems. The agency also required MannKind to run a
follow-on trial to determine whether Afrezza did increase patients'
cancer risk.
Further, most payers in the U.S. have Afrezza in a "tier three"
reimbursement category. That generally comes with higher copays and
requires physicians to explain why they prescribed Afrezza over
standard injected insulin. Sanofi also priced Afrezza at a premium
to its injectable counterparts.
(END) Dow Jones Newswires
February 10, 2016 02:47 ET (07:47 GMT)
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