MannKind is having an incredibly hard time in the market as of late. Yesterday, it was announced that the commercialization agreement between MannKind and Sanofi is coming to an end. However, as the story unfolds, it’s starting to become clear that MNKD is actually a victim of SNY and, if investors are smart, they will push the company to take Sanofi to court! Today, we’ll talk about why I believe MNKD is a SNY victim, the fact that this isn’t the first time this has happened, and why I believe it’s a good idea to get involved in MNKD.
Why MannKind Is A Victim Of Sanofi
Last year, after the approval of MannKind’s Afrezza, Sanofi was contracted for the commercialization of the treatment. Afrezza is an inhaled insulin that has the potential to create a pivotal change in the treatment of diabetes. Because Afrezza takes the need for an injection out of insulin treatment, Sanofi should have had a relatively easy time marketing the treatment. However, throughout the year 2015, SNY was dragging its feet with regard to the commercialization of the treatment. As a result, sales were overwhelmingly poor and MNKD suffered!
When it finally became time to start the direct to consumer phase, a phase that was expected to increase sales and improve MNKD stock prices, Sanofi fiddled with their responsibilities yet again. While SNY did place magazine and online ads, investors pushed for television ads to no avail! However, the reason Sanofi decided to delay with regard to Afrezza was a bit back-handed.
Sanofi is a company that is in charge of commercializing several treatments, one of which is known as Lantus. Lantus is an insulin in the more mainstream form. That’s right, it’s an insulin injection. So, naturally, SNY wouldn’t want the treatment MNKD came up with to become the standard of care. After all, if Afrezza became the standard of care, it would essentially affect the bottom line of Sanofi. While the ties between MNKD and SNY are in the process of breaking, I don’t think that this is enough. Throughout the time Sanofi was dragging its feet, the company was driving MannKind into the ground. Now, it’s time for them to pay the price. Eventually, MNKD should take Sanofi to court for their wrong doing during their relationship.
This Isn’t The First Time Sanofi Willfully Held Back On Commercialization
While it may come as a surprise to some, MNKD investors know that Sanofi has a history of dragging its feet when it comes to the commercialization of treatments. In fact, many believe that this is done on purpose to drive the competition down, and that belief really makes sense. In fact, Sanofi was recently taken to court for doing just that. On November 9th, a lawsuit was filed against Sanofi with regard to stalling the development of a multiple sclerosis drug known as Lemtrada. The suit claims that Sanofi delayed the commercialization of the drug in an attempt to avoid paying out at least $708 million to rights holders under its 2011 agreement to acquire Genzyme Corp.
What We Can Expect To See Moving Forward
First and foremost, MNKD investors should be pushing the company to take SNY to court for their wrongful delay of commercialization of Afrezza, costing MNKD and its investors millions of dollars! Outside of this issue, I believe that MannKind is going to climb in the future. Once a television ad is created, I believe that sales will climb in a big way! All in all, things don’t look good for the short term for MNKD. However, in the long term, the company has quite a bit going for it!
What Do You Think?
Do you think MannKind should take Sanofi to court? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]