Afrezza Product and Company Overview
Afrezza is an ultra-rapid-acting form of inhalable or mealtime insulin that is currently in its late stages of clinical investigation. Afrezza is purposely developed to provide treatment to adults suffering from type one or type two diabetes mellitus and Afrezza will be suited for the control of hyperglycemia. Afrezza is a drug-device that is combined with Afrezza inhalation powder that has been measured into meter level representing single dose cartridges and the Afrezza inhaler (Datamonitor Report 4). Afrezza is a proprietary product being developed by MannKind Corporation.
MannKind Corporation is a US based biopharmaceutical company involved in the discovery, development, and commercialization of therapeutic products needed for the treatment of diseases such as cancer and diabetes (Datamonitor Report 5). MannKind Corporation uses its proprietary Technosphere where selected organic molecules are designed in such a manner that they are capable of self-assembling into small particles from which loading of drug molecules becomes easier (MannKind Corporation; (Datamonitor Report 5). Technosphere technology presents a versatile platform for delivering drugs that are capable of allowing pulmonary administration of specific drugs that are currently administered through injections. MannKind Corporation is also involved in the development of other drug inhalation technologies such as breath-activated inhalers for dry powders and inhalation profiling used in the characterization of patient information.
Diabetes is one of the prominent killer diseases in the world commonly categorized as a form of metabolism disorder. Treatments for other types of diabetes are available except for diabetes Type 1 and Type 2 that have no known cure and can last a lifetime. These 2 categories of diabetes are caused by irregular supply of insulin in the body of patients due to no production of insulin (for Type 1) or lack of production and effective use of insulin (for Type 2). Popular ways of treating Type 1 include the injection of insulin into the bodies of patients, prescription of dietary supplements, and encouraging patients to adhere to regular exercises. Equally, Type 2 patients are mostly given tablets, special diets, regular exercises, and at times, they might require injection of insulin into their body systems. These treatment methods for diabetes require strict management and control which is often tiresome for some exercises. Lack of adequate control can subject patients to increased vulnerability to risks and complications that include hypoglycemia, and nonketotic coma (hypersosmolar). Other common implications of diabetes include heart damages and increased heart diseases, minimized flow of blood vessels, damage to the nerves, kidneys failures, and overall risks of deaths
Speaking of statistics, the World Health Organization estimates that nearly 346 million individuals in the world are suffering from diabetes (Wild, and Sicree, 1046). The WHO, furthermore, argues that over that 80 per cent of deaths resulting from diabetes are prevalent in low-and middle-income countries and, the number of these deaths is expected to double in the next 20 years (Wild, and Sicree, 1047). Economically, diabetes are associated with several economic impacts to countries, families, health systems, and individuals become a substantial volume of resources are channeled into the prevention and control of the disease.
The Unmet Need
Reduction of postprandial excursions of glucose to normal levels
Avoid cases that cause hypoglycemia
Afrezza leads to no weight gain in the part of users
Will eliminates the need of frequent prandial injections of insulin
The use of Afrezza is associated with lack of complexities such as complex titration of meals (Affrezza (a))
With the above capabilities, MannKind Corporation has increased potentials of utilizing Afrezza to bring a change in the manner with which the treatment of diabetes is undertaken. Additionally, it stands higher changes of reducing costs and complications associated with the treatment and management of diabetes. This represents one of the greatest milestones that have never been achieved in the treatment of diabetes. Undeniably, Afrezza will provide answers to the increased laborious tasks that individuals and the community encounter on a recurring basis while trying to provide treatment for diabetes, the inconvenient tasks such as having to follow strict exercise and dietary programmes. Instead, Afrezza from MannKind Corporation makes life simplifier to individuals suffering from diabetes and as well, health institutions, families, and the community as whole (Affrezza). It will also make the treatment and control of diabetes an easier process to endure. With the shortest time (14 minutes) required before insulin can take effect after inhalation from Afrezza. Afrezza is arguably the best ever drug to be formulated. No competitor has ever come close to marching the extent that Mankind Corporation has achieved regarding the design and development of Afrezza. Even Pfizer’s Exubera cannot match the increased advantages and effectiveness offered by Afrezza.
Players: Partnerships and Institutions
MannKind Corporation has done a significant role in discovering, developing, and commercializing Afrezza, a product that will most likely offer solutions for the treatment of diabetes. However, MannKind Corporation can never solely win the fight against diabetes without the involvement of other institutions and business partnerships. Admittedly, a lot of resources and time have been channeled in the development of Afrezza. The proprietary technology, Technosphere technology, present a versatile platform for delivering drugs that are capable of allowing pulmonary administration of specific drugs that are currently administered through injections. As such, it becomes emphatically crucial that other institutions take responsibility by being involved in the marketing and distribution of Afrezza. Not only does is present a health benefit to the society as far the prevention, control, and management of diabetes is concerned but also it presents one of the most profitable business opportunities.
Health institutions, retail pharmaceutical companies, individual entrepreneurs, and other distribution channels can utilize this opportunity to fulfill and satisfy the unmet need in the society and as well, generate enough revenues. Millions of funds have channeled in pursuit of solutions for treating diabetes and hence, this situation presents a viable opportunity to those individuals and institutions wishing to engage in business activities related to the distribution and marketing of Afrezza. For health institutions, the sale and distribution of Afrezza will enable them to cut down on costs and other laborious activities that are often encountered in the treatment and management of diabetes.
First, the costs of purchasing diabetes related but less effective drugs will be minimized with the sale and distribution of Afrezza. Second, judging from the success of clinical trials that have been undertaken on patients, it highly likely that majority of prescriptions relating to the treatment of diabetes will turn out successful thereby increasing the popularity and success of the health institution. Lastly, health institutions will satisfy their mission, visions, and overall objectives of providing health to individuals within society. This will represent one of the greatest achievements in health giving the levels of sufferings caused by diabetes.
For pharmaceutical companies and distribution channels, Afrezza will present a business opportunity for diversifying their product portfolios and revenue generating incomes. The success of Afrezza in the treatment and control of diabetes suggests that there will be increased demand for the Afrezza due to its efficiencies and effectiveness. As such, it represents a fast moving product in business terms thereby bringing increased turnover levels for these institutions. Distribution channels will also generate profits given that diabetes is an issue of worldwide concern and Afrezza will have to be distributed to different regions in order add value as it reaches the consumer.
Other important market developments relating to the marketing and distribution of Afrezza includes the issuance of complete response letter (CRL) by the Prescription Drug User Fee Act (PDUFA), creative financing arrangement with companies such as Mann Foundation and Seaside 88. The diabetes market is the second largest treatment market after prescriptions associated with the treatment of obesity. Recently, the stock prices for MannKind Corporation have increased tremendously due to increased participation from investors.
Business Venture and Operations
Since Afrezza is still in its final stages of clinical operations, this section presents some important projections relating to the production, marketing, financing, human resource management, and future research and development regarding the distribution of Afrezza.
As earlier mentioned, Afrezza is an ultra-rapid-acting form of inhalable or mealtime insulin that is currently in its late stages of clinical investigation. MannKind Corporation based in Valencia, California in the United States is currently involved in its development and production. It owns the proprietary technology, Technosphere technology, Technosphere technology presents a versatile platform for delivering drugs that is capable of allowing pulmonary administration of specific drugs that are currently administered through injection. Technosphere Technology operates on the basis where selected organic molecules are designed in such a manner that they are capable of self-assembling into small particles from which loading of drug molecules becomes easier. Therefore, MannKind Corporations holds the intellectual property rights and patent rights as far as the development and design of Afrezza is concerned. However, other operations such as marketing will be delegated to other institutions and business ventures aiming to make profitable opportunities from the sale and distribution of Afrezza. Owing to the international concern of diabetes, production activities in future can be relegated to a non-governmental institution such as the World Health Organization but MannKind Corporation will keep the intellectual property rights and patents. The move to delegate production operations to a non-government is to reduce the high operation costs and as well, promote the treatment and control of diabetes from a non-profit making motive.
On September 2011, MannKind Corporation revealed that it requires increasing the level of funding necessary for funding increased clinical trials that are being tested on Diabetes patients. The debt was estimated to cost approximately $370.1 million. Equally, by the end of June 2010, MannKind Corporation announced that the outstanding debt associated with the production and distribution of Afrezza amounted to $452.2 million that been obtained from loans and convertibles from the Mann Group (Seeking Alpha (b)). The interest burden occurring because of funding Afrezza development efforts presents an interest burden of approximately 4.1% to MannKind Corporation (Seeking Alpha). Speaking of capital contributions, resources worth $1.6 billion have been channeled towards the design and development of Afrezza.
The current market price of the nearest Afrezza competitor, Pfizer’s Exubera, costs $ 5 whereas other forms of traditional insulin costs a price of between $2-3. However, Afrezza will be supplied to the market a premium price of 10-20% as compared to the price of traditional injectable insulin (Seeking Alpha). This shows that Afrezza will manage to obtain a larger share of the insulin market thereby enabling MannKind Corporation to pay off the debt that has been channeled into the production and development of Afrezza. If Afrezza passes the current clinical trials, MannKind Corporation will undoubtedly name its production and distribution partner, preferably a non-governmental and non-profit making organization such as the World Health Organization. This will increased the demand of Afrezza and more funds will be channeled for expanded production of the Afrezza. Within a short time, MannKind Corporation will have managed to recover the costs that were channeled into the production and development of Afrezza thereby representing a viable business opportunity (Seeking Alpha (a)).
Human Resource Management and Related Operations
Currently, MannKind Corporation is undertaking the management of human resources and other operational activities. Key individuals within the managing executive of MannKind Corporation solely make management decisions and perhaps, they are responsible for organizing and managing future directions relating to research activities and other related development and research initiatives. However, with the mounting pressure from shareholders does exert an element of influence in decision-making processes particularly those relating to the development of Afrezza.
In future, the announcement of a development or production partner to MannKind Corporation will most likely have an influence on the nature of management operations and other related operations. Similarly, MannKind Corporation will have a hand in managing activities of selected institutions and entrepreneurs who might be involved in distribution activities for Afrezza. This will facilitate the estimation of total revenues and profit levels associated with the sale and distribution of the product.
Marketing Operations and Strategies
This will be one of the most essential aspects in case the development and production of Afrezza becomes successful. Marketing operations and strategies will be the determining factor that will be used to gauge the success of Afrezza. Answers will be provided to various questions including weather this unmet need is a worthwhile business opportunity, and whether it should pursued on a large-scale basis. However, marketing operations will be one the most complex operations that calls for thorough operations and effective planning to ensure that the product reaches to the targeted market on time (Kotler, and Keller, 12). Luckily, the demand for the product is driven by a health situation coupled with the satisfaction of an unmet need in society. All elements of the marketing mix will be applicable during marketing operations of Afrezza. Therefore, effective market planning and understanding will be essential in determining the success of marketing operations (Kotler, and Keller, 13).
The first element of the marketing mix will be the definition of the product strategy. The product in this situation will be Afrezza. Afrezza is an ultra-rapid-acting form of inhalable or mealtime insulin and it is purposely developed to provide treatment to adults suffering from type one or type two diabetes mellitus and Afrezza will be suited for the control of hyperglycemia. Afrezza is a drug-device that is combined with Afrezza inhalation powder that has been pre-metered into single use dose cartridges and the Afrezza inhaler. The second element of the product mix is the people strategy and this involves the targeted individuals. Virtually, Afrezza is targeted to all individuals suffering from diabetes but it will be particularly distributed by health institutions and pharmaceutical companies. The demand for Afrezza will not be dependent of preferences, tastes, or other factors of appeal but rather the demand will be dependent on the health situation of victims.
The third element of the product mix is the place or distribution strategy. Afrezza will be distributed all-over the world because diabetes patients are found all over the world and in health institutions. Distribution channels will depend on the partner chosen by MannKind Corporation. If the World Health Organization is selected as a partner, the product will be distributed through health institutions and other institutions involved in the supply of medical services. Entrepreneurs or businesses interested in the distribution of Afrezza will also play a role in the supply and distribution of the product. Finally yet important, the promotion strategy of Afrezza will be undertaken using promotional mix tools such as public relations, advertising, personal sales, and company direct sales.
Future Research and Development
Research and development forms the largest portion of expenditures for MannKind Corporation because the company is primarily focused in discovering, developing, and commercializing products for treating a range of diseases that include diabetes, inflammatory diseases, and cancer (MannKind Corporation). Technosphere technology is a clear example of the effects of research and innovativeness. Currently, the on-going clinical investigations require a significant volume of funding in order to help in financing improvements on the Afrezza. Undoubtedly, research and development will continue to play a significant role in continued advancement of the Afrezza and in developing future versions of the drug. Investments in research and development will continue to place MannKind Corporation at a differentiated position when it comes to discovering, developing, and commercializing therapeutic products for treating a range of diseases.
Viability of Afrezza Project
The assessment of the entire process involving the development and production of Afrezza reveals that a viable business opportunity can be found in the distribution and sale of Afrezza. One of the primary advantages associated with the supply, delivery of this product involves the satisfaction, and fulfillment of an unmet need in society. Millions of individuals are suffering from the effects of diabetes and the existing processes and treatments for curing the disease involve laborious activities that are complex during the administration of treatment. To this purpose, the Afrezza project stands an ideal chance of providing solutions to current issues and problems associated with diabetes in addition to providing business opportunities to individuals and organizations.
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