MannKind Retracts Job Offer After Former Employer Insulet Objects, Names Another New CEO
January 12, 2016
By Alex Keown, BioSpace.com Breaking News Staff
VALENCIA, Calif. – MannKind Corporation has a new chief at the helm and it is not Duane M. DeSisto, as was originally intended. MannKind withdrew its offer to DeSisto after Insulet Corporation objected to his appointment, claiming it would violate a non-competition clause he had with that company.
Instead, Matthew J. Pfeffer has been named the new chief executive officer of MannKind. Pfeffer replaces company founder Alfred Mann who has been serving as interim CEO since Nov. 19 following the abrupt departure of CEO Hakan Edstrom, who resigned from the struggling company in November. Pfeffer is expected to continue serving as chief financial officer of MannKind and will also assume a place on the board of directors.
MannKind tapped DeSisto, the former CEO of Insulet, in December. He served as CEO of Insulet from 203 to 2014.
Although the company has had to unexpectedly shuffle its top-level executive plans, the company has also had other difficulties with multiple rounds of layoffs in 2015 due to sluggish sales of Afrezza, a rapid-acting inhaled form of insulin to treat diabetes. Earlier this month, the company was dealt another blow when the company announced after months of rumors that its license and collaboration deal with Sanofi-Aventis U.S. LLC for Afrezza has been terminated. Early in 2014, the U.S. Food and Drug Administration (FDA) approved Afrezza, an inhaled form of insulin. Right from the start, the drug did not meet sales expectations. Sanofi had a commercialization agreement with MannKind. However, at least part of the problems with Afrezza sales were related to insurance reimbursement issues. The drug was classified as a Tier 3 medication, which meant patients had to pay a higher co-pay for the drug. The higher tier status also means more restrictions can be placed on the drug. Another issue with the drug is that it cannot be prescribed to patients with asthma and other serious lung ailments. Additionally, the U.S. Food and Drug Administration requires doctors to test patients' lung function before writing a prescription for Afrezza. During treatment those patients must also have their lung function tested every six months, the Los Angeles Times reported.
The Jan. 5 announcement of the dissolving of the partnership indicates that MannKind and Sanofi will immediately start transition discussions to shift Afrezza’s development and commercialization activities to MannKind over the next 90 to 180 days. The termination will be effective no later than July 4 of this year, the companies said. Sanofi’s diabetes market appears to be faltering. It recently reported that its diabetes sales worldwide decreased 6.6 percent in the third quarter to $1.975 million. This was mostly caused by lackluster sales of Lantus basal insulin sales in the U.S.
MannKind’s stock is currently trading at 72 cents per share, up from its open of 68 cents per share. The stock has steadily declined in the last 11 months, down from a high of $7.58 per share in February of 2015.