Academic journal article Journal of Case Studies

Will MannKind's Dream Come True?

Academic journal article Journal of Case Studies

Will MannKind's Dream Come True?

Article excerpt

Diabetes was ranked as the seventh leading cause of death in the U.S. and contributed to a growing list of other serious ailments (National Institutes of Health, 2014). This disease was traditionally treated with a drug called insulin, which had to be injected through a needle. Many diabetics did not want to stick a needle in their body every day to maintain health and prevent early death. Alfred Mann worked inside several firms to develop state-of-the-art medical products that made the management of diabetes easier for patients (Medtronic MiniMed, Inc, 2014). As founder and CEO of his newest firm, MannKind Corporation, he developed an inhaled insulin to treat diabetes without the use of needles. The product was composed of an insulin powder called Afrezza, and an inhaler called Dreamboat. Before Afrezza-Dreamboat could be made available to patients, it would need to be approved by the U.S. Food and Drug Administration (FDA).

When MannKind filed their 2010 New Drug Application (NDA) with the FDA, they used their new inhaler, Dreamboat, instead of their established inhaler, Medtone (see Figures 1 and 2). The FDA had previously approved Medtone, but MannKind opted to use their latest technology, Dreamboat. This substitution proved to be a costly mistake. The FDA rejected the MannKind NDA, creating major fluctuations in the firm's stock price and warranting layoffs that reduced the firm's workforce by 41% (Davis, 2011). MannKind made several subsequent FDA filings to show Dreamboat was as safe as Medtone, but more regulatory delays were encountered. In a 2011 interview with Globes, Mann voiced his frustration with the FDA: "That is the regulatory environment that we operate in, which together with other factors that are burdening the U.S. economy and health system, are simply killing innovation." (Weinreb, 2011). With each FDA delay, Mann voiced his concern about external challenges such as the regulatory process. Mann and other stakeholders were also concerned about internal firm challenges and how company decisions might have delayed FDA approval (Davis, 2011; Macaluso, 2012; Zinn, 2013).

Pfizer, a large pharmaceutical firm, had developed inhaled insulin that was similar to MannKind's product. The product, called "Exubera", had been approved by the FDA in 2006. However, Exubera failed in the marketplace, costing Pfizer billions of dollars. As a result of the Exubera failure, two competitors cancelled similar product development programs (Macaluso, 2012). Hence, Mann's investment in the Afrezza-Dreamboat product was risky. Would MannKind's product be able to succeed where others had failed? The company submitted a new application to the FDA in October 2013. Mann remained bullish regarding anticipated FDA approval. He even predicted it would occur by April 2014 (Orelli, 2013). Although Mann was reflective about his past strategic decisions, he was known as an innovative and fearless leader in the industry. Past competitors' product failures, FDA delays, and stakeholder uncertainty did not deter his optimism about final FDA approval (Orelli, 2013).

Industry speculation grew as the final 2014 FDA decision date approached. Many observers assessed Mann's past strategic decisions (Davis, 2011; Macaluso, 2012; Markey, 2013; Zinn, 2013). Mann attributed his strategic management success to the founding and funding of medical device companies; but drug development was a relatively new endeavor. If you were Alfred Mann, what strategic analysis models and frameworks would you use to analyze the effectiveness of past company decisions and improve the chances of receiving final FDA approval for Afrezza-Dreamboat?

Industry Background

According to industry classification, MannKind was involved in both the biotechnology (biotech) and pharmaceutical (pharma) industries (NAICS Association, 2012; MannKind Corporation, 2013). Trends in both industries were used to view and analyze the characteristics of MannKind Corporation (Friedman, 2006; NAICS Association, 2012). …

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