MannKind Corp.'s inhaled insulin drug Afrezza continued its slow launch in the second quarter of the year.
Sanofi, the French pharmaceutical company that's selling Afrezza in a partnership agreement with MannKind, said it sold just $2.2 million of the drug in the quarter that ended June 30. That means that in its first five months, sales have reached just $3.3 million – a disappointing result considering some analysts expect sales to reach $1 billion a year.
MannKind's stock was down just 1 cent to $4.43 at 12:15 p.m. Pacific time. It initially fell 10%, but rebounded later in the trading session.
Matthew Pfeffer, MannKind's chief financial officer, said he expects sales to pick up as Sanofi launches a direct-to-consumer marketing campaign. This month, Sanofi placed a three-page advertisement in Time magazine, seeking to increase consumer awareness of the new drug. It has also expanded sales staff assigned to market the drug, Pfeffer said.
"Advertising and new Internet-based marketing efforts did not begin until this quarter, so their effects have not yet been seen," Pfeffer said in an email.
The Food and Drug Administration approved Afrezza in June 2014, following more than a decade of research, testing and regulatory setbacks.
MannKind's founder, 89-year-old Alfred Mann, said he expects Afrezza to become one of the top-selling drugs in U.S. history. He said its benefit goes far beyond the convenience of inhaling instead of injecting it; Afrezza is extremely fast-acting and clears the body quickly. Instead of having to plan insulin injections long before meals, users can take a quick puff of Afrezza immediately before eating.
The FDA, however, required that all patients pass a lung-function test before they can use the drug. It also ordered MannKind to include a warning that the drug should not be used by smokers or people with lung disease.
Cost is another consideration. Sanofi's wholesale price for 20 units a day of Afrezza is $9.29, compared with $5.23 for its injected insulin, Apidra. Sanofi is offering coupons on its website to help patients cover co-pays.
To this point, the biggest marketing push has come from Afrezza users, who have used social media sites such as Twitter and Reddit to spread the word. Many users of the drug have said they are extremely happy with its effectiveness.
Analysts at Goldman Sachs are pessimistic about Afrezza's future, rating Mannkind's stock a sell and saying in a recent report that the number of prescriptions is "far too low to reach profitability near-term." The investment bank has lowered its sales estimate for the drug twice this year.