MannKind (NASDAQ:56400P706) has gotten two new leaders in as many months. The biotech crowned a new CEO last month when MannKind's president and chief operating officer Hakan Edstrom was promoted to CEO. The company then got a new leader Thursday when the biotech's partner Sanofi (NASDAQ:SNY) announced that it had hired Olivier Brandicourt.
Even though he doesn't work for the company, establishing Brandicourt at Sanofi's helm is likely to have a much larger effect on the success of MannKind's Afrezza than the CEO change at MannKind, given that Sanofi is in charge of the marketing and sales of the inhaled insulin.
Brandicourt has experience selling inhaled insulin -- he was the head of Pfizer's metabolic and cardiovascular division during the launch of Exubera. Pfizer, however, pulled the inhaled insulin drug-device from the market after less than a year due to poor sales.
That's either a really good thing or a really bad thing for MannKind.
Brandicourt could feel that he's learned from Pfizer's mistakes and can be more successful than last time. And let's not forget that Afrezza, which looks like an asthma inhaler, has a better design than Exubera, which had a long, wide tube and looked like something from which you'd smoke marijuana. Part of the appeal of inhaled insulin is that it's more discrete for patients than having to perform injections before a meal at a restaurant. Breaking out the Exubera device -- if it would even fit in your purse -- was anything but discrete.
The design wasn't Exubera's only problem. "It takes time to educate the physician," Brandicourt told The New York Times in 2007. Not much has changed in the last eight years during which there hasn't been an inhaled insulin on the market. Doctors are still going to have to be educated about the benefits of inhaled insulin.
Pfizer had a hard time convincing doctors that changing the route of administration was a good idea. A recommendation from the FDA to perform lung function tests before initiation, after six months, and annually after that -- which Afrezza also requires -- didn't help. Brandicourt may feel the cost to convince doctors won't result in a good return on investment.
Brandicourt's course of action may be complicated by the dynamics at Sanofi. Chris Viehbacher, who set up the partnership, was fired from his CEO position, apparently because he wasn't doing what the Board of Directors wanted. Bandicourt may not have much of a say in the resources and effort put into marketing Afrezza; he may be at the mercy of the board.
Viehbacher's team did Brandicourt and the board a big favor when they set up the partnership. Sanofi can give rights to Afrezza back to MannKind after January 2016 with 90 days notice if the company "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.
Given that it won't cost Sanofi anything extra to easily disband the partnership, such a termination is unlikely to be made before next January. At that point, if things aren't going well and it appears the partnership will have a hard time getting to profitability, Brandicourt can just blame Viehbacher and move on.