Will History Repeat for Inhaled Insulin?

MannKind (NASDAQ: MNKD  )  has been struggling to get its inhalable insulin product Afrezza on the market; the product was sent back to the labs by the Food and Drug Administration in 2011 for further trials. While the company recently achieved positive results in its phase 3 trials and is hoping to file an NDA soon, there's a long story behind inhalable insulin that makes me uncomfortable with a stock completely focused on this product.

The long story -- will it grow longer?
Inhalable insulin has a history almost as old as insulin itself. In the early 1920s, there were efforts made to create an inhaler because scientists thought people would be averse to pricking themselves in the arm once daily. That effort continued sporadically until 2006, when Pfizer (NYSE: PFE  ) got into the game after licensing the rights to a product that came to be known as Exubera.

Analysts averse to pricking themselves once daily predicted a huge future for the product. The product was, no doubt, innovative, requiring complex chemistry to create the airborne stream of insulin that would be properly absorbed in the blood capillaries in the correct amount. Billions of dollars were expected to come off the venture. Pfizer itself predicted $2 billion in annual sales.

Unfortunately, however, Exubera failed abysmally. In 2007, Pfizer had to recall the product from the market, and it said it would never develop it again. The company suffered a charge of $2.8 billion.

"We faced the combination of breaking through the barrier of conventional insulin therapy and the burden of the product on the medical practices, and this innovation was not accepted," said Pfizer spokeswoman Vanessa Aristide in an email to BusinessWeek at the time.

How this affects Afrezza
This story is germane to Afrezza in two ways. One, because MannKind has tried to solve some of the same problems that affected Nektar's product. And two, because MannKind has failed to realize the main problem vexing this budding market.

One of the problems that Afrezza has solved is size. Exubera was intimidating. Try flipping out a foot-size cylinder from your pocket during a dinner date and your date's surprised face will tell you how discreet that is. Afrezza, on the other hand, is small and cool. It fits right into your palm, so you can use it without drawing attention in a public place. Or frightening your date at restaurants.

The other problem was the drug delivery itself. Exubera's dosing was confusing, given a non-linear change versus comparable amounts of insulin. Compared to an injection syringe where you can precisely regulate quantity, Exubera's dosing could be more hit-or-miss for patients. Afrezza, now, is much more carefully developed using its proprietary Technosphere technology. 

So, Afrezza is definitely a better product than Exubera, but MannKind has not addressed the main problem with the business.

Why Afrezza may not work
What excited investors in the insulin inhaler business probably fail to realize is that with thinning needles and years of practice, as well as the gravity of the disease situation, sticking a needle once or a few times daily isn't really that much of a daunting task. It is an irritant, but it is not worth paying more for an inhaler version that could potentially create more problems than it solves.

This is the simple but apparently hard-to-understand reason why I think Afrezza will not perform up to expectations in the market. Sure, a few people with trypanophobia will probably buy the product -- Exubera made about $12 million in sales before it was discontinued -- but unless cost is low, effectiveness is increased manifold, and user safety is confident, there's limited future for this market.

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Read/Post Comments (13) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 11, 2013, at 6:38 PM, bufnyfan1 wrote:

    "sticking a needle once or a few times daily isn't really that much of a daunting task"

    baloney---many of my patients don't maintain good glucose control because as they tell me--they HATE injections--they all tell me they would love a metered device they can inhale--so your argument has no merit

  • Report this Comment On September 11, 2013, at 6:55 PM, noelnavarro wrote:

    It is that you are not a diabetic, nor do you understand what diabetics go through on a daily basis. I have numerous family members that are diabetic, including children.

    Do you know how difficult it is to get a child to inject himself 4 times a day? It is extremely difficult for an adult to comply with their insulin therapy using traditional treatment. Compliance is even more difficult for a child. A diabetic would have to inject himself or herself about 1,460 times a year on average, rotating different places in the body. As a result, there will be bruising all over the body. Try telling a child you have to do this to yourself for the rest of your life!

  • Report this Comment On September 11, 2013, at 7:09 PM, Caboose82741 wrote:

    I guarantee that any new diabetics who are told they must take insulin daily and are given a choice between using an inhaler or using a needle every day, will choose the inhaler almost every time.

  • Report this Comment On September 11, 2013, at 8:25 PM, JUDYREITZ wrote:

    One afternoon my sister called me to tell me about a new insulin for diabetics that could be inhaled instead of injected. She was so excited about the thought of fewer injections and hope that she would be able to stabilize her numbers. She told me about Afrezza. At first I did not pay too much attention, but after I really started researching Afrezza and Alfred Mann, I soon became a huge supporter of this company, the technology and the founder. I think Al Mann is beyond brilliant and knows his "stuff". I trust this brilliant man and if I were a diabetic, needing help, I know I would feel very confident having him lead my team. Please do your research on Al Mann and you will be in awe of his contributions to mankind. He has done so much for so many. Mannkind is his company and they have developed and tested their ultra fast insulin that can literally change your life if you are diabetic. No more needles at mealtime and that is just the beginning. It gets better from there so go find out about Afrezza, Mannkind, and Al Mann.

    The Dreamboat inhaler is very small and convenient....Ladies and gentlemen it will fit into the palm of your hand. The inhaler will be so economical that it will be disposed of every two weeks and you will receive 2 with each months supply of super fast acting mealtime insulin. I believe this product will be a game changer for the future treatment of diabetics.

    I am an ordinary, everyday person, but I will tell you I honestly believe this insulin and delivery system will be a Godsend to many. Afrezza and Dreamboat - build it, they will come.

    You will learn a lot about diabetes and Afrezza by listening to Dr. Jay Skyler on YouTube. Dr. Sklyer is with the Diabetic Research Institute in Florida. Who could explain it any better? Go have a look and I am sure you will understand more about diabetes, also.

    I hope the FDA does not deny the diabetics of this country a life-changing product any longer.

    Yes, of course, I am long on Mannkind........If I don't believe in something, I would never invest a dime in it. I do believe in Mannkind!

  • Report this Comment On September 11, 2013, at 9:05 PM, sayhey44 wrote:

    Whats clear from this article is you know very little about Afrezza. While i for one don't like big needles I also don't like little needles. The fact is I can't think of one person I know who looks forward to sticking themselves. Its a great marketing advantage for Afrezza that it doesn't require needles but this is not the reason Afrezza will be prescribed. It is all about Afrezza mimicking normal body mealtime insulin release which results in significantly better fasting blood sugar control. Afrezza is a paradigm shift in diabetes control. So much so that all the experts are rethinking A1c basal control. Comparing Exubura to Afrezza is like comparing a 1970 Ford Pinto to a brand new Porsche 911.

  • Report this Comment On September 11, 2013, at 9:47 PM, Kimamarie wrote:

    Sorry but author of this article just doesn't understand the pain and suffering diabetics endure.P

    Us with inhaler a lot lower chance of a dosing error. I'm long Mnkd it's going to be a significant medication for treating diabetics.

  • Report this Comment On September 11, 2013, at 10:52 PM, foolpost11 wrote:

    You ought to try to poke a thin needle on your skin – how does it feel?

    A big company failure does not translate the end of innovation.

    Tesla made the best car (also green) in all categories including safety – this is a brand new company developing from scratch in a few years. It also need a few hundreds M investment to design from scratch and launch the products. How many car manufacturers including Mercedes that Telsa has to compete against?

    SpaceX sent a spacecraft with its own rockets. They are developed from scratch and only needs a private money/investment to get it off the ground in a few years. Look at the giant competitors that has taken in $100Bs from the govt.

    These are just a few to name.

    It has been known that the big guys, et al, have a big stake in their own products will do anything to protect their profits.

  • Report this Comment On September 11, 2013, at 11:18 PM, earthunit wrote:

    You TOTALLY are missing the real point of Afrezza. The fact that it is an "ultra quick acting" insulin is much more important than the inhaled vs needle aspect. Afrezza, more than any other insulin in the world, mimicks the body's nutural mechanism while eating! Therefore, it IS a better insulin by far. You didn't even mention that! ANOTHER lousy MF reporting job.

  • Report this Comment On September 11, 2013, at 11:38 PM, horticultor wrote:

    No, history will not repeat for inhaled insuin, but it will repeat for inhaled marijuana on the part of these mindless Motley Fool Afrezza bashers.

  • Report this Comment On September 11, 2013, at 11:51 PM, starpark88 wrote:

    I see two main issues here.

    1) There is a huge market for inhaled insulin. Many people are dissuaded from a much needed product due to having inject themselves.

    2) Inhaled insulin will be more expensive than the injected forms

    There may be some overlap (i.e children who don't want to inject themselves) but in my experience, those who are most averse to injection tend to be those who can least afford the premium insulins. Add on that afrezza is ultra fast acting, and you need a bunch of doses during the day, and likely a longer acting insulin to cover one's self at night. I see a ton of potential here but this product can never be a standalone product due to being so fast acting so we're going to need to prick people at night regardless. The best I see here is we can replace a prick or two during the day, or have this product be an emergency insulin everyone can carry around in case there is sudden hyperglycemia.

  • Report this Comment On September 12, 2013, at 12:58 AM, omkarnk wrote:

    This article had nothing new to offer or say. It is just an amalgamation of articles previously written by other authors. I also does not provide any meaningful reasoning or insight about the question asked in the title. Are these articles posted here without going through screening process? It baffles me that a respected site like fool.com will have such a mundane article.

  • Report this Comment On September 12, 2013, at 1:04 PM, andybaron wrote:

    This article completely ignores Afrezza's biggest advantage, which is that it delivers insulin to the system withing 8-12 minutes and leaves the system in less than 3 hours, matching the way that pancreatic insulin is released and metabolized in non-diabetics. Injectable mealtime insulin and even fast-acting analogs take longer both to get into the system and to leave it.

    If Mannkind had developed an injectable product with the same kinetics as Afrezza, it would be very popular. The fact that Afrezza is inhaled rather than injected is just an added bonus.

  • Report this Comment On January 06, 2014, at 10:46 PM, dunn22 wrote:

    I am a 19 year old diabetic myself and trust me when I say the ability to inhale insulin would definitely change my life.

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