MannKind does rapid rework of production in Afrezza swap with Sanofi

By Eric Palmer Aug 10, 2016 3:54pm

When Sanofi ($SNY) and MannKind ($MNKD) parted company in January, the California biotech gamely took on the challenge of revamping the company to commercialize its inhaled insulin product Afrezza on its own. That required building a sales organization but also a significant refocus of its manufacturing operation from a supplier to producing its own branded product, and accomplishing everything in about 6 months.

The Valencia, CA, company already had a manufacturing facility in Danbury, CT, that had been producing product for Sanofi, CEO Matthew Pfeffer told FiercePharmaManufacturing in an email on Wednesday. There had been talk of Sanofi taking on product manufacturing, but that had not come to pass.

But on the manufacturing front, this dramatic company “pivot” meant converting the manufacturing organization to a supplier-owned MannKind branded product, with new product configurations, and to arrange for commercial distribution through a wholesale network. And it had to be done in record time.

While the drugmaker has made hires on the sales side, it had an operating manufacturing unit, Pfeffer said in the email. “We had already staffed up and built out the facility to supply the demand anticipated from Sanofi. Unfortunately, that demand never materialized and we were left with a facility that was largely idle late last year and early this year,” Pfeffer said.

Making the transition meant some significant expenses for manufacturing, as the company laid out in its earnings report on Monday. For the first half of 2016, MannKind reported a total loss of $54.8 million or $0.12 a share. But during H1, MannKind reduced total operating expenses 15% to $39.1 million, reporting decreases in things like R&D and general and administrative costs. Manufacturing costs, however, were higher, rising 47% to $11.2 million, as manufacturing of commercial product resumed in preparation for the relaunch of Afrezza in the third quarter of 2016.

In the second quarter, MannKind reported product manufacturing costs of $3.7 million, and expects that number to remain relatively flat as compared to last year as it continues to manufacture commercial product, the company told analysts. Its manufacturing facility currently has a production capacity to handle about 450,000 patients, but with the capability to increase that quickly if needed. Ultimate capacity was anticipated to be approximately 2 million patients, the CEO explained.

Of course the shift in manufacturing was just part of the big transformation. The company also had to transition ongoing clinical programs back to MannKind, set up a medical information request system, develop a pharmacovigilance program, transition the safety database and set up an adverse event reporting and tracking system. It also had to transfer all the NDA paperwork and other documentation and so forth, and on top of that create a sales organization.

“Getting all that we accomplished done in such a short time was an incredible feat,” the CEO said in his email. “Most people do not understand all that is required of a company when it has a product on the market."

- here’s the earnings release
- and a transcript of the earnings call (reg. req.)

commercial manufacturing Mannkind Pharma