Glycosylated Hemoglobin (HbA1c) is a form of a metalloprotein in the red blood cells that exists in all vertebrates. It is what is used to quantify just how elevated plasma glucose has been over time, since free plasma glucose levels vary widely, but once HbA1c forms, its levels are relatively constant, and only vary with the formation and death of the red blood cells in which it is found. Measurements of HbA1c are therefore useful in the initial diagnosis of diabetes and in determining dietary compliance among patients. Your HbA1c level is basically an indicator of your average blood glucose concentration for the previous 1-3 months. According to the American Diabetes Association (ADA,) a HbA1c > 6.5 means you have diabetes. If it is between 5.7% - 6.4% then you are considered a pre-diabetic, at severe risk of becoming a Type 2 Diabetic. Drugs used to treat diabetes are evaluated on their ability to lower HbA1c levels.
Diabetes is classified as either Type 1 or Type 2. Type 1 results from the body’s inability to product insulin, which makes up somewhere between 5-10% of all diabetics. Type 2 Diabetes results from the body’s resistance to insulin, which makes up 90-95% of all diabetes cases. Insulin resistance most commonly affects your muscle and fat cells, which make up 2/3rds of your body. There is no cure for diabetes, either type 1 or 2, and for most it is a chronic disease. In the case of Type 2, the root cause in 80% of all cases is being overweight or obese, along with genetic predisposition. Through diet and exercise many Type 2’s could cure their disease, but most do not. The CDC estimates there are 56M Pre-diabetics, just a few pounds and a HbA1c point away from being classified as a full-blown diabetic. There are currently close to 28M diabetics in the US or 8% of the population and 6.5% of Europe is diabetic. According to a recent report from the CDC, a child born today has a 1 in 3 chance of becoming a diabetic in a few decades if things don’t change in our country and we could wind up with as many as 500M worldwide at the current rate of expansion. Outside of Obesity, there is no bigger cost to the world’s healthcare system.
Up to 75% of all deaths in Type 2 Diabetic patients are a result of Cardiovascular Disease (CVD.) There is a growing body of evidence that better control of post prandial glucose (PPG,) can substantially reduce CVD risk. Post prandial Glucose is the amount of glucose in the blood that exists after eating a meal, usually measured at 1-2 hours. In a study published in 2009, “Postprandial glucose - a potential therapeutic target to reduce cardiovascular mortality” (Peter R, Okoseime OE, Rees A, Owens DR. PMID: 19149642), the authors state, “There is now emerging evidence that postprandial glucose (PPG) contributes significantly to CVD risk, although to date there are no large scale interventional studies underway which test the hypothesis that targeting PPG will reduce CVD risk. Until recently, there was no consensus about the definition of postprandial hyperglycaemia. The International Diabetes Federation (IDF) has now developed new clinical guidelines for postprandial glucose and recommend that 2-hour post prandial glucose levels be kept <7.8 mmol/L. In the last few years more has become known about the cellular mechanisms triggered in response to glucose excursions which may explain this increased susceptibility to CVD. Recently, investigation into the contribution of PPG to HbA1c in subjects with T2DM, has shown that this is maximal in relatively well controlled diabetic subjects. Hence PPG is emerging as a legitimate therapeutic target to minimise CVD risk.” So not only is achieving a HbA1c under 6.5% an important treatment goal with managing diabetes, so is controlling post-prandial glucose levels in order to decrease the greatest risk of death among diabetics. The current standard of care for the treatment of diabetes primarily focuses on HbA1c reduction and not PPG.
To understand the impact of Afrezza, we must first look at the “normal science” for treating diabetes, both Type 1 and Type 2. Now before I go further, I am not a medical doctor or medical professional, just an investor that likes to understand the science behind what I may potentially invest in. My knowledge of diabetes, the treatment of diabetes and Afrezza all come through Internet-based research and conversation with other professionals.
The “Normal Science” of Treating Diabetes:
“Normal Science” is the term phrased by Kuhn to describe the accepted standard prior to the occurrence of a “Paradigm Shift.” There is a current “standard of care” for treating Diabetes which is generally followed by practitioners. For Type 1 patients, they have no choice but to receive Insulin through basal insulin injections and usually at mealtime to cover prandial needs. For Type 2’s, there are a number of options physicians can take to treat the disease but the American Diabetes Association and European Association for the Study of Diabetes has published consensus recommendations for initiating therapy.In the 2009 study published in Diabetes Care, “Medical Management of Hyperglycemia in Type 2 Diabetes: A Consensus Algorithm for the Initiation and Adjustment of Therapy -- A consensus statement of the American Diabetes Association and the European Association for the Study of Diabetes” (David M. Nathan, MD, John B. Buse, MD, PHD, Mayer B. Davidson, MD, Ele Ferrannini, MD, Rury R. Holman, FRCP, Robert Sherwin, MD, and Bernard Zinman, MD,) the study concludes that “Many patients may be managed effectively with monotherapy; however, the progressive nature of the disease will require the use of combination therapy in many, if not most, patients over time, to achieve and maintain glycemia in the target range.” “Self-monitoring of blood glucose (SMBG) is an important element in adjusting or adding new interventions and, in particular, in titrating insulin doses.” “Mounting evidence suggests that aggressive lowering of glycemia, especially with insulin therapy, in newly diagnosed diabetes can result in sustained remissions, i.e., normoglycemia without need for glucose-lowering medications. Type 2 diabetes is a progressive disease, and patients should be informed that they are likely to require the addition of glucose-lowering medications over time.”
|Diabetes Treatment Options|
As you can see from the above treatment options, insulin therapy has the best advantages to any therapy but the currently available insulin therapies have important disadvantages with them, namely 1-4 shots per day, self-monitoring of blood glucose, weight gain and risk of hypoglycemia. In an article published by Irl Hirsch, M.D. (Univ of Washington School of Medicine) on 11/16/2005 entitled “Optimal Initiation of Insulin in Type 2 Diabetes,” Dr. Hirsch writes about the impact insulin therapy can have on Type 2 Diabetics and the optimal initiation plan to use insulin. Dr. Hirsch states that “it can be anticipated that most patients will eventually require insulin therapy to achieve and maintain glycemic control.” Regarding the ADA’s goal of maintaining a HbA1c < 6.5%, “Such stringent levels of glucose control cannot generally be maintained with oral antidiabetic drugs (OADs) alone. However, overall rates of insulin use for type 2 diabetes in the United States are very low. Approximately 11% of patients are treated with a combination of insulin plus OADs and another 16% receive insulin monotherapy. An A1C < 7.0% is only achieved in 36% of patients. Higher rates of glycemic control have been reported among patients with type 2 diabetes who are receiving care from endocrinology practices (61%) and may in part be due to a higher rate of insulin use.”
Dr. Hirsch’s description of the barriers to insulin therapy is spot-on in my opinion, “delays in initiating insulin may stem from both physician and patient barriers. Negative patient perceptions regarding insulin include fear of injections and hypoglycemia. In some cases, patients may perceive insulin as
a sign of their personal failure to control the disease. Clinician concerns include hypoglycemia, weight gain, and the misconception that elevated insulin increases cardiovascular risks. In addition, both clinicians and patients may consider insulin therapy to be complicated and labor-intensive.”
The graphic below shows the current recommended treatment plan for diabetics.
Diabetes Treatment Initiation, recommended Standard of Care:
|Curent "Normal Science" for Treating Diabetes|
When lifestyle changes and Metformin aren’t enough, the recommended approach is to either try a sulfonylurea or basal insulin next. Physicians generally reach for basal over prandial insulin first because you are only looking at 1 injection per day, rather than 3 in the case of prandial therapy, which patients are less resistant to. Once those aren’t doing the job by themselves, more intensive insulin therapy is recommended, including the use of a prandial (RAA - Rapid Acting Analog) insulin. The other agents available have their place with some patients but all have their own side effects to consider in relation to their modest reduction in HbA1c and control of post prandial glucose excursions. The earlier introduction of insulin into a patient’s treatment plan is the most effective therapy for controlling HbA1c and PPG but in order for that to happen, insulin must overcome the high barriers preventing wide-spread adoption.
Insulin as a treatment is basically a commodity. Insulin is Insulin is Insulin -- it has been used for treating diabetes for 90 years. The differentiation in the market is around the delivery device and kinetics. Sanofi-Aventis will say that Lantus basal insulin is better than Novo Nordisk’s Levemir basal insulin. Novo Nordisk will say their NovoRapid is better than Eli Lilly’s Humalog Rapid Acting insulin. For the most part, Basal insulin is Basal insulin and Rapid Acting Analogs are Rapid Acting Analogs. They are all injected, have comparable onset of action and remain in the body for similar periods of time. They all have the same barriers to entry for introducing them into the patient’s treatment plan. Think of Ford vs. GM; they both make cars and are competing for the same market share across the same set of consumers, but there is little difference among the vehicles themselves and it simply boils down to personal preference. The same is true for the current mix of insulin providers. This will change with the introduction of Afrezza. It is like bringing a new car to the market that costs the same as the current cars available but the new car can also fly and uses half the fuel.
The arrival of Afrezza Ultra-Rapid insulin on the market will usher in a new change in the standard of care that I will describe below.
Dispelling myths and supplying factual detail about Exubera and Afrezza
Before moving on to the Afrezza Paradigm Shift, I’d like to clear up the often misconstrued comparison between Exubera and Afrezza. The only common element between both products is that they are both delivered the pulmonary route. Rather than invoke my opinion into the matter, I’ll simply state the facts about each product and let you the reader, draw your own conclusions as to the ability to forecast the market for Afrezza based on the experience from Exubera.
Pfizer’s Exubera was one of the biggest failures in the history of biotech. Originally projected to do over $2B a year in sales, it was a complete flop when introduced and Pfizer took a $2.8B charge to write-off the program. MannKind’s detractors and skeptics continue to point to the dismal sales of Exubera as an indicator for the future of Afrezza. Here are the facts about Exubera, which ultimately led to its failure.
· Exubera offered absolutely no medical benefit whatsoever to Rapid Acting Analogs (RAA.) None.
· The only benefit of Exubera is that you inhaled it and could prevent mealtime injections, but the kinetics and side effects were similar to regular RAA.
· Exubera had very complex dosing requirements, unique to the product and not linear to standard insulin units. You still had to perform dose titration before a meal and continue to administer Self-Monitoring Glucose Tests.
· Prescribers hated it. It offered no advantage as a therapy, had complex dosing and therefore took a lot of time to explain its use to patients. Patients were often confused by how to use it, which took up a lot of time for physicians and their staff.
· Exubera was priced 20% higher than RAA so Payers didn’t want to cover it.
· The device itself was very inconvenient.
· Despite a popular myth, Exubura did not cause an increase in lung cancer risk.
|The "Exubera Bong"|
It is no wonder that Exubera was such a dud in the market given the facts above. The question is why did Pfizer even bother with it? The ‘other’ company’s efforts at inhaled insulin were ceased after Exubera’s failure. Every single one of those programs was a ‘me too’ effort offering no medical benefit, just like Exubera.
Now here are the facts about MannKind’s Afrezza.
· Afrezza is the world’s first Ultra-Rapid Insulin.
· Afrezza mimics the normal insulin response to a meal that a healthy person would have.
· Afrezza greatly reduces the risk of hypoglycemia
· Afrezza is weight-neutral.
· Afrezza results in lower fasting glucose levels.
· Afrezza inhaler is convenient and easy to use, tested for patients as young as 4 years old.
· Afrezza causes no clinically meaningful impact to pulmonary function (1.7% on the Medtone device and about .5% on the Gen2 inhaler.)
· The Device is disposed of every 2 weeks, eliminating concerns of cleaning or long-term durability.
· Afrezza’s meal-escalation study demonstrated that there was no increased risk of hypoglycemia from Zero up to 150 grams of carbohydrates during a meal. Very little if any need for complex meal titration.
· Afrezza eliminates the need for painful shots, a major concern for new patients requiring insulin therapy and a complaint for those already on insulin therapy.
· Afrezza breaks down all of the existing barriers for introducing insulin therapy to a patient!
|MannKind's Gen2 "Dreamboat" Inhaler|
The graph below shows the superior kinetics of Afrezza, practically mimicking a normal person’s insulin response to a meal. This is the key for reducing Hypoglycemia and improving post prandial glucose levels.
Afrezza greatly reduces the risk of Hypoglycemia compared to standard RAA insulin
Because Afrezza works fast without the long tale that exists with existing prandial insulin options, the risk of Hypoglycemia is greatly reduced. This is clear when the data from the Phase 2/3 trials is pooled and analyzed.
|Afrezza in Purple and injected insulin in Orange|
Meal-time insulin control is the first problem that diabetics experience with keeping glucose levels in check. Today, basal insulin is first introduced because it is typically a single daily injection, but it doesn’t adequately control mealtime glucose needs, which continue to stress the pancreas. Through early use of a prandial insulin (instead of basal,) pancreatic stress can be reduced, with the potential to dramatically extend the organ’s lifespan.
The Afrezza “Paradigm Shift” of Treating Diabetes:
These conclusions are consistent with other studies I have read and my own opinion for user acceptance. Now, look at the comparison between Afrezza and existing basal or prandial therapies. Early introduction of Afrezza therapy can help lower the risk of long-term cardiovascular disease risk. It may eventually be proven to reduce the stress on the pancreas and preserve β-cell function, thereby arresting or slowing the progression of the disease. Afrezza may in fact add a decade or more to the expected lifespan of those suffering from diabetes.
|Improvents in Post-prandial Insulin Control|
Today, Diabetics on insulin therapy have to maintain a vigorous blood glucose monitoring regime to calculate their mealtime injection dosage requirements and adjust with correcting doses if necessary. For most patients on Afrezza, this will potentially no longer be the case. In a meal escalation study conducted by MannKind and presented as a poster at this year’s ADA, the researchers demonstrated that once a patient is on their optimal dose of Afrezza, just some basic carbohydrate estimates will be needed to ensure their normal dose is adequate. In this study, MannKind tested the effect of eating a meal containing varying levels of carbohydrates with the effect of the post-prandial glucose excursions. This test included eating double the expected amount of carbohydrates, half the expected amount and completely skipping the meal together. All 4 scenarios resulted in PPG Excursions that were well under the recommendations of the ADA, without increased risk of hypoglycemia. This is a complete Paradigm Shift for diabetics on insulin therapy.
Alfred Mann discussed this study in their conference call held on February 1st, 2010 and had this to say about it: ““The objective of this study was to demonstrate conclusively that complex meal titration is not needed. Almost from the beginning of the AFREZZA program, I have expected a very wide therapeutic window for AFREZZA, and especially so in type 2. But I was surprised when the subject(s) had no hypo problems at all, even if they ate absolutely nothing. Let me be more specific. Both prandial excursions for the type 2 patients were within plus or minus 35 milligrams per deciliter, no matter what they ate, even if they ate nothing. The patients all achieved good glycemic control by taking a standard dose of AFREZZA, no matter what they ate and without the risk of hypo. And if there is no need for titration and little risk of hypos, there would be little need for regular prandial glucose [measurement] regimens. We will need to conduct more of these studies in order to demonstrate these findings on a larger scale.”
Afrezza breaks-down the existing barriers to entry for the introduction of Insulin Therapy for both patients and physicians.
Afrezza addresses the primary barriers from patients and physicians for introducing insulin therapy. These are:
· Fear of Injections
· Risk of Hypoglycemia
· Weight Gain
· Complicated and labor intensive
With these barriers broken down, you will see Afrezza rapidly gain market acceptance from patients on existing RAA therapies and patients that should be on insulin but aren’t. Overtime, you will see Afrezza used far earlier in the treatment for Type 2 than you have seen in the past with injected insulin.
The graph below is what may happen over the next few years as Afrezza gains market acceptance.
Afrezza opens up a new world for Endocrinologists and Primary Care Physicians to treat Diabetes. Insulin has been the most effective tool at controlling HbA1c but patients have been reluctant to use it for fear of needles and weight gain. Afrezza’s superior absorption kinetics over existing therapies, combined with its ease of use and convenience, will usher in a new era of diabetes management that may have a dramatic impact to the long term health of those suffering from the disease.
To fully appreciate Afrezza and the value of MannKind, you must understand the unique underlying system that makes Ultra-Rapid Acting insulin possible.