Mannkind's Afrezza: No Real Benefits for Diabetics or Investors

Includes: LLY, MNKD, NVO, SFY
by: Joseph Krueger

In my last article about Mannkind's (NASDAQ:MNKD) Afrezza, I was critical about Afrezza's market acceptance given the checkered past of inhaled insulin products, its less-than-straightfoward regulatory path, and lack of improved benefit over inhaled insulin against the other injectable rapid acting insulins available. In essence, my conclusion was that although Afrezza may be a novel approach to enable diabetics to have more effective blood-glucose control, there are significant caveats to it being touted as a panacea for diabetics who need insulin and significant risks associated with its approval.

In response to many comments made on the article, I felt it might be best to step back and take a look at the "big picture". In order to do this, first we must consider the difference between type 1 and type 2 diabetes, and the role of insulin in these diseases. Type 1 diabetes results from the body's failure to produce insulin, requiring the person to administer insulin to control their blood sugar. In contrast, type 2 diabetes is called insulin resistance, where the body fails to use insulin properly, requiring the person to administer extra insulin at times of greatest need (mealtime) and/or control blood sugar levels by taking drugs which increase the amount of insulin secreted by the pancreas, or drugs which increase the sensitivity of the body to insulin, or drugs which decrease the rate at which glucose is absorbed from the gastrointestinal tract. In all these cases, the goal is to control glucose levels by preventing spikes and dips throughout the day and especially meal time.

Mannkind states:

We believe that because of its unique pharmacokinetic profile, Afrezza may be a promising new therapy for patients.

Indeed. Mannkind is on the right track, as the most significant factor in determining how administered insulin regulates blood sugar levels is the pharmacokinetic profile (how quickly it enters the bloodstream and acts, and how long lasting the actions are). Since insulin helps the body lower blood glucose, you want high insulin at meal time as glucose enters the blood from digestion to avoid glucose spikes (hyperglycemia), and lower insulin post-meals to avoid glucose dips from too much insulin (hypoglycemia).

So with all administered insulin, timing this balance is key to controlling blood sugar. Afrezza enters the blood stream quickly through the highly vascularized lungs, and acts quickly to control glucose for a short period of time. The three already marketed products which are in competition with Afrezza (inhaled insulin) are injected, rapid-acting froms of insulin from Eli Lilly (NYSE:LLY) (Humalog), Novo Nordisk (NYSE:NVO) (Novolog) and Sanofi Aventis (NYSE:SFY) (Apidra). These injectable forms accomplish the same goal of controlling meal time glucose levels through rapid action.

It is also important to consider the primary measurements used to determine glucose control. Measurements of fasting glucose levels or glucose levels after meals are not the primary measurement of efficacy- glycated hemoglobin (HA1c) levels after prolonged treatment is the gold standard. This is the most critical measure, as during the normal three month life span of red blood cells, glucose in the blood reacts with the hemoglobin in the red blood cells, forming glycated hemoglobin (HA1c). Once a hemoglobin molecule is glycated, it remains that way until it is destroyed through natural turnover of red blood cells. A buildup of glycated hemoglobin therefore reflects the average blood glucose concentration over the previous three months. Thus, this measure is the primary outcome of all diabetes treatment trials.

Chronic elevations in blood sugar (and therefore hA1c) is associated with all the problems of diabetes: Increased risk of coronary disease, heart attack, stroke, heart failure, kidney failure, blindness, erectile dysfunction, neuropathy, gangrene, and poor wound healing. Thus, it is well accepted by the medical community (and the FDA) that a measure of hA1c levels is a measure of controlling diabetes.

Without this understanding of diabetes and its measures of efficacy, investors are ignoring the details and see Afrezza as trying to solve two "problems": 1) the elimination of needles and 2) providing better glucose control for both type I and type 2 diabetics. On the surface, Afrezza seems to accomplish this, but as always, the devil is in the details.

First, Afrezza does not eliminate needles in type I diabetics. Even with Afrezza, type I diabetics still have to take long-lasting (basal) insulin (it would eliminate injected insulin at mealtime). Second, Afrezza does not provide better glucose control in type I diabetics.

The primary outcome in the trial comparing Afrezza to fast-acting insulin at meal time showed equivalency/non-inferiority (no significant difference) to rapid acting injectible insulin in regulating glycated hemoglobin (hA1c) levels over the year-long study. There were improvements in the secondary outcomes: Post-mealtime and fasting glucose levels with Afrezza users; but again, this is not the primary measure of overall efficacy. The claims of weight loss are exaggerated: Afrezza users lost about a pound compared to injected insulin users who gained three pounds over one year. Therefore in type 1 diabetics, Afrezza does not prevent the use of needles and does not improve long term glucose control over long periods of time, with no other significant tangible benefits.

For type 2 diabetics who require insulin at meal times, their choice is to use rapid acting injectable insulin or Afrezza at mealtime. Again all the diabetics in this study still used injected basal insulin at bedtime, thus the use of needles is not eliminated. Similar to the study in type I diabetics, Afrezza did not provide better long term glucose control as measured by hA1c levels during the year-long study (within ranges of error). Similar to the data with type 1 diabetics, there were improvements in the secondary outcomes: Lower post-mealtime and fasting glucose levels, as well as less frequent hypoglycemia incidence with Afrezza users; but again, this is not the primary measure of overall efficacy. Here there are no claims of weight loss- only a modest claim of prevention of weight gain- Afrezza users gained about two pounds compared to injected insulin users who gained five pounds over one year. Therefore in type 2 diabetics, Afrezza does not prevent the use of needles and does not improve long term glucose control over long periods of time, with no other significant tangible benefits.

So I come back to my original conclusion in the last article: Why bother? Apart from the fact that the insulin is inhaled (which carries all the marketing, acceptance, and potential pulmonary risks associated with inhaled insulin), Afrezza doesnt seem to offer any benefit over injectable fast-acting insulin. In fact, it provides a distinct risk for MNKD investors. Invest wisely.

Disclosure: No position in MNKD

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