(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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