Diabetics looking to avoid some needle pricks have a new option with Sanofi (NASDAQ:SNY) and MannKind's (NASDAQ:56400P706) Afrezza, which is finally available in pharmacies.

It's been a long time coming for the drug-device combination. First rejected by the FDA five years ago, Afrezza would see a second rejection in 2011 before finally gaining FDA approval last year. The inhalation device portion of Afrezza has gotten better over time, so the wait was somewhat worth it.

Afrezza is approved for both type 1 and type 2 diabetics as a mealtime insulin. Type 1 diabetics and advanced type 2 diabetics won't be able to avoid the needle stabs completely because they'll still have to take basal insulin to keep their blood sugar level under control.

Not the first
Afrezza isn't the first inhaled insulin to be approved in the U.S. A few years before MannKind's first rejection, Pfizer (NYSE:PFE) launched Exubera, which was pulled from the market after just nine months on the market due to dismal sales of just $12 million. Patients didn't like the unwieldy device, a long tube that looked like something you'd smoke marijuana out of, and doctors didn't like the added lung tests required.

Source: Sanofi

MannKind fixed the device issue. Afrezza looks like an asthma inhaler, small enough that you can carry it around in your pocket. It's something you could take a puff on in a restaurant and not get too many stares.

Afrezza still requires lung tests though: one before starting, one after being on Afrezza for six months, and yearly after that. It remains to be seen if the added burden of the test -- and the worry about potential lung side effects that comes with it -- will keep doctors from prescribing Afrezza in mass.

And Afrezza is theoretically a better insulin than the injected mealtime insulins because it comes on and off quicker, mimicking insulin levels in non-diabetic patients. The better pharmacodynamics should result in fewer episodes of low glucose levels, but there's no mention of it on Afrezza's label.

Big bet
Sanofi doesn't seem to think the lung tests will be a major barrier to sales. In exchange for a 65% stake in Afrezza, Sanofi gave MannKind $150 million upfront and has already paid another $50 million in milestone payments related to completing launch preparations. There's still another $675 million left to earn, and Saonfi agreed to loan MannKind enough money to cover the biotech's portion of the losses from the partnership, up to $175 million.

MannKind gave up a lot in the deal, but the upfront payments and covering the initial losses from the partnership is a clear sign that Sanofi has confidence in Afrezza. Of course the pharma giant also gave itself an out, putting a clause in the contract that allows it to walk away anytime after January 2016 with 90 days notice if "Sanofi determines in good faith that the commercialization of Afrezza is no longer economically viable in the United States," according to an SEC document filed by MannKind.

Opportunity knocks
While all eyes will be on the number of prescriptions that Afrezza garners as Sanofi launches the drug-device, the characteristics of diabetics taking Afrezza will more telling of the launch trajectory.

The low hanging fruit comes from patients that hate injecting themselves. That's a smaller amount than it was before the development of injecting pens with small needles, but there's certainly some patients that Sanofi shouldn't have trouble switching from injected insulin to Afrezza.

Source: Novo Nordisk

Beyond those patients, it'll be interesting to see if we have routine switching from injected insulin. Routine switching would be a good sign that doctors think Afrezza is as safe as injected insulins and they're not worried about potential lung side effects.

There's also a group of type 2 diabetics on oral therapies that haven't transitioned to insulin yet, which can be thought of as an extension of the aforementioned low hanging fruit. Type 2 diabetes is a progressive disease, so patient start on oral therapies and sometimes delay starting insulin as their disease progresses because of the added inconvenience of injecting themselves. Since these patients aren't as healthy as they should be, the benefits may outweigh potential side effects.

The new-to-insulin patients may be the easiest group for Sanofi to capture, but it'll throttle the amount of the market that Afrezza can take from the injected insulins since there are only a fraction of diabetics in that transition each year.