A rare stumble for biotech pioneer Alfred Mann

Over seven decades, billionaire Alfred Mann has founded 17 companies, including ones that help the blind see and the deaf hear.

Along the way, he’s built a fortune that at one point topped $2 billion, but in what could be his final act, the 90-year-old biotech entrepreneur has stumbled.

His latest big venture, a treatment that lets diabetics inhale their insulin instead of injecting it, has been a huge disappointment.

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So disappointing, that Mann’s stake in the company — in which he invested $975 million of his own cash — is now worth just $113 million after its latest setback sent shares falling nearly 50%.

On Tuesday, Mann’s Valencia company MannKind Corp. disclosed that it lost a key partner, French pharmaceutical giant Sanofi, which had agreed to market and distribute Afrezza but pulled out after a year of exceedingly slow sales.

The company said Mann was not available for comment.

For Mann, it’s a rare tumble. And for those who saw him as a miracle worker, it’s a stunning disappointment.

“Everybody wanted him to be successful with this product,” said Dr. Alan Marcus, an endocrinologist in Laguna Hills who was an early Afrezza backer. “I think this is going to be his last go-round. He just turned 90. I think at a certain point, you just get tired.”

For Mann, Afrezza has been a 10-year quest, one that’s been beset by delays. The Food and Drug Administration twice rejected the drug before finally approving it in 2014.

Such delays are common for new drugs, but losing the Sanofi contract adds a new and unexpected wrinkle to what’s been a troubled history for Afrezza.

The drug, which hit the market in February, was not the first inhalable insulin, coming years after Pfizer developed and then pulled a product called Exubera.

That product — which like Afrezza took a decade to develop and saw slow sales in its first year — appeared to affect some patients’ lung function and came with a clunky inhaler that some likened to a bong.

But Mann, whom associates have called stubborn, always maintained that Afrezza was a superior product, with a smaller inhaler and a better formulation of insulin than Exubera.

“I have never considered abandoning [Afrezza] because I firmly believe that Afrezza has the potential to bring significant benefits to the still growing and enormous population of people with diabetes,” Mann told The Times in 2014, shortly after the FDA approved the drug.

But the FDA approval was not the final hurdle for Afrezza, since it came with serious strings attached.

The agency said the drug could not be prescribed to patients with asthma and other serious lung diseases. It also was not recommended for smokers. And the FDA required doctors to perform a lung-function test on all patients before writing an Afrezza prescription — and at six-month intervals thereafter.

Shortly after FDA approval, MannKind, a drug developer with no sales or distribution network, struck a deal with Sanofi that called for the French firm to pay as much as $925 million for the right to market and distribute the drug. The deal also called for MannKind to receive 35% of profits.

The rich Sanofi deal was not a guarantee of success.

While the warning and tests might have been a turnoff for some potential users, some doctors and analysts suggested Afrezza’s struggles also were the result of a botched roll-out by Sanofi, which reported selling about $5.5 million in the first nine months of last year.

In an emailed statement, Sanofi spokeswoman Susan Brooks said the company didn’t scrimp on promoting Afrezza. She said Sanofi worked to help patients with the insurance reimbursement process, worked with doctors to address lung-testing requirements and offered educational seminars.

Despite all that, “Afrezza has continued to demonstrate low volume and revenue performance,” she said.

But Marcus, the Laguna Hills endocrinologist, said Sanofi’s educational and marketing efforts fell short, especially in teaching doctors how to do the FDA-mandated lung tests.

Those are tests endocrinologists don’t typically perform. Marcus said Sanofi offered a class, but no hands-on training with either lung-testing equipment or with the Afrezza inhalers themselves.

“Sanofi didn’t have a wise plan for introducing this product,” he said.

What’s more, Marcus said many of the patients he prescribed Afrezza to ended up dropping it because it wasn’t covered by their insurance.

Keith Markey, an analyst at Griffin Securities in New York, said Sanofi was not able to get many insurance companies to accept Afrezza, making it difficult for many patients to afford the drug.

“It was an extremely slow and cumbersome process for everyone involved. If you can’t get the drug, you can’t find out that it’s really easier to use” than injections, Markey said.

Amid all the difficulties, MannKind Chief Executive Hakan Edstrom, who had shepherded development of Afrezza since 2001, turned in his resignation in November.

Still, Mann is known as a tenacious sort, one who doesn’t back down even in the face of long odds.

Mann ran the company on an interim basis until Tuesday, when Duane DeSisto, a former chief executive of insulin pump maker Insulet, replaced him.

Robert Greenberg, chairman of Mann-backed Second Sight Medical Products, which makes a retina implant that provides sight to the blind, said Mann sees huge problems as solvable ones.

“He’s unwilling to give up,” Greenberg told The Times in 2014.

That goes for MannKind too. In a brief conference call Tuesday, the company’s chief financial officer, Matthew Pfeffer, dismissed notions that MannKind is running out of cash or would soon be up for sale.

“This is not the end of the line for Afrezza or MannKind by any means,” said Pfeffer, who took no questions but vowed to do so at a drug investors conference next week.

He said educating physicians and getting more insurers to cover Afrezza are top priorities.

And though the market reaction to Tuesday’s news paints a bleak outlook for the company — shares closed at just 75 cents after topping $10 in 2014 — Pfeffer said MannKind will continue on and look for new marketing and distribution agreements with other firms.

“We have had difficult situations before and have prevailed,” Pfeffer said.

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