MannKind picks up the pieces of Pfizer’s failure

The acquisition of the Frankfurt am Main, Germany facility includes Pfizer’s inventory of bulk insulin and the right to acquire more, which MannKind views as a necessary step to bring Afresa to market.

Pfizer abandoned its own attempt to enter the inhaled insulin market, Exubera, after its sales fell well short of expectations, leaving the big pharma with capacity that had been created to handle the predicted blockbuster demand.

This has created opportunities for others, with Alfred Mann, CEO of MannKind, hoping the Pfizer site will secure an immediate and future insulin supply for Afresa, even if the company is “unable to acquire the facility itself​”.

The uncertainty over the purchase of the facility is created by the roles of Infraserv, which operates the industrial park that the site is housed on, and Sanofi-Aventis.

For the deal to go through, Infraserv must give its consent before April 3, otherwise MannKind can only acquire certain assets, including the facility’s removable equipment.

This would make MannKind responsible for dismantling the facility, which would cost an estimated $40m. In addition, if the deal goes through after April 3 MannKind could have to pay up to an additional $3m per month to acquire the site.

However, even if Infraserv consents in time Sanofi could still scupper the deal as it has first refusal to acquire the facility and can choose to exercise this right within 60 days of notification.

Infraserv and Sanofi did not respond to in-PharmaTechnologist’s request for comments prior to publication.

Speculate to accumulate​

If MannKind acquires the facility it has indicated it will retain approximately 80 of the 148 employees, with the site operating at a production level that fulfils its current needs. Severance pay of up to $24m has been guaranteed to cover these job cuts.

These costs will add to the challenges MannKind faced in Q4, when the company recorded higher than expected losses of $83m, but the expenditures are viewed as necessary as it prepares to submit Afresa for regulatory approval in the US.

Mann said: "The insulin plant in Frankfurt is a state-of-the-art insulin production facility that would make an excellent counterpart to our formulation, fill and finish facility for Afresa in Danbury, Connecticut​.”

MannKind can fund the deal with up to $30m in common stock.