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* MannKind gets $150 mln upfront, up to $775 mln in
* Sanofi, MannKind aim to launch Afrezza in U.S. in Q1 2015
* Inhaled insulin offers alternative to daily injections
* Consensus sales forecasts for Afrezza about $1 bln by 2019
By James Regan and Ben Hirschler
PARIS/LONDON, Aug 11 French drugmaker Sanofi
is betting on inhaled insulin as an alternative option
to daily injections for diabetics by signing a worldwide
licensing agreement with MannKind Corp worth up to $925
Inhalation promises people with diabetes much greater
convenience than routine injections but it remains unclear how
widely it will be adopted, given concerns about the potential
risks associated with breathing powdered insulin into the lungs.
The deal is the latest example of Sanofi exploring novel
ways of treating diabetes, which it sees as a core growth area
for its business as the number of people suffering from the
disease rises around the world.
Sanofi currently enjoys the No.2 spot in a global diabetes
market worth over $40 billion a year but it faces challenges as
its top-selling drug Lantus, the world's most prescribed
insulin, is set to lose patent protection next year.
Under the new arrangement, Sanofi will have the right to
develop and market MannKind's recently approved inhaled insulin
therapy Afrezza for adults with both type 1 and type 2 diabetes,
the two companies said on Monday.
The partners plan to launch Afrezza in the United States in
the first quarter of 2015.
U.S.-based MannKind will receive an upfront payment of $150
million and potential further milestone payments of up to $775
million, depending on the drug's commercial success. Sanofi and
MannKind will share profits and losses on a global basis, with
Sanofi retaining 65 percent and MannKind the rest.
Sanofi has agreed to advance to MannKind its share of the
collaboration's expenses up to a limit of $175 million, the
Afrezza is delivered via a whistle-sized inhaler, and it
acts more rapidly than injectable insulins made by Sanofi or
rivals such as Eli Lilly and Novo Nordisk.
However, its path to market has not been easy. Afrezza was
developed in the shadow of Pfizer's failed inhaled
insulin Exubera, which was approved in 2006 and expected to
generate annual sales of $2 billion. That inhaler was big and
bulky and patients were put off by the need for periodic lung
function tests. Eventually it was withdrawn.
Exubera's failure, together with concerns the inhaled powder
could increase the risk of lung diseases, has led to some
investor scepticism about Afrezza's future. Industry analysts
currently expect Afrezza to generate sales of about $1 billion
by 2019, according to consensus forecasts compiled by Thomson
MannKind's product was finally approved by the U.S. Food and
Administration in June, but it will carry a boxed warning of the
risk of acute bronchospasm, or constriction of the airways of
the lung, in patients with asthma and chronic obstructive
As a result, the regulator has required a risk evaluation
and mitigation strategy for the product to ensure that its
benefits outweigh the potential risks.
According to the prescribing information, patients with
chronic lung disease should not use Afrezza and doctors are also
advised to make extensive checks to identify potential lung
disease before prescribing the product.
The label also recommends it not be used in patients who
smoke or who have recently stopped smoking.
For Sanofi, the drug and device combination offered by
Afrezza is another way to broaden its diabetes portfolio at a
time when many large pharmaceutical companies are eyeing the
area with interest.
"Afrezza is a further addition to our growing portfolio of
integrated diabetes solutions," said Pierre Chancel, Sanofi's
diabetes division head.
"It is uniquely positioned to provide patients with another
insulin therapy option to manage their diabetes but does not
require multiple daily injections."
Two months ago Sanofi struck another drug-device diabetes
alliance with U.S. medical technology company Medtronic.
That deal will bring together Sanofi's insulin portfolio and
Medtronic's insulin pumps and glucose monitoring, with a focus
on sufferers unable to achieve glucose control despite multiple
daily injections of insulin.
An estimated 382 million people worldwide have diabetes and
the number of cases is expected to rise to 592 million by 2035,
according to the International Diabetes Federation. Type 2
diabetes, which is associated with obesity, accounts for the
vast majority of cases.
Greenhill acted as financial adviser to MannKind on the
(Editing by Erica Billingham)