MannKind Corporation: Take a Deep Breath, This Time Afrezza Will Work

Elie  Ofek; Amanda  Dai

Case | HBS Case Collection | August 2017 (Revised July 2018)

MannKind Corporation: Take a Deep Breath, This Time Afrezza Will Work

by Elie Ofek and Amanda Dai

Abstract

In June 2014, MannKind Corporation announced that after years of development and billions of dollars in expenses, the FDA had finally approved its drug, Afrezza. MannKind would thus be the only company with an inhalable insulin on the market. As an alternative to injectable rapid-acting (or mealtime) insulin, Afrezza boasted a potential market of at least 4 million diabetic patients. Shortly thereafter, Sanofi, a company with vast experience in the diabetic space, became MannKind’s marketing partner and helped launch Afrezza in February, 2015. Although the drug had a black box warning and required doctors to perform a lung test on patients, expectations were high, with some analysts predicting peak sales of up to $4 billion a year. However, those lofty hopes were quickly dashed when Afrezza generated lackluster first-year sales, driving Sanofi to terminate its short-lived contract with MannKind in January 2016. MannKind's management attributed the launch’s failure to a poor marketing approach, convinced that Sanofi, despite its strong global presence and experience, did not effectively address critical barriers to adoption. The company now planned to overhaul Afrezza’s entire marketing strategy. This included rethinking which patients and physicians to target, how to position the drug to engender interest and adoption, how to lower end consumer price, through which media to convey Afrezza's benefits, and how to streamline the process of performing the lung test and getting the drug into the hands of patients. But would all these changes and initiatives, no matter how well executed, be enough to turn sales around? Would Afrezza ever realize the potential that Alfred Mann, the late founder and former CEO, saw in the novel treatment?

Keywords: Health Care and Treatment; Product Launch; Product Positioning; Marketing Strategy; Adoption; Pharmaceutical Industry;

Language: English

Format: Print

28 pages

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Citation:

Ofek, Elie, and Amanda Dai. "MannKind Corporation: Take a Deep Breath, This Time Afrezza Will Work." Harvard Business School Case 518-031, August 2017. (Revised July 2018.)

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Article | Management Science | June 2018

Personal and Social Usage: The Origins of Active Customers and Ways to Keep Them Engaged

Clarence Lee, Elie Ofek and Thomas Steenburgh

We study how digital service firms can develop an active customer base, focusing on two questions. First, how does the way that customers use the service postadoption to meet their own needs (personal usage) and to interact with one another (social usage) vary across customer acquisition methods? Second, how do firm-to-customer and customer-to-customer communications promote different types of usage? We study these questions using two data sets and by developing a multivariate hierarchical Poisson hidden Markov model (HMM), which fits the data significantly better than univariate and latent class approaches. We indeed find that postadoption behavior varies depending on customer acquisition method and dynamic states. At the total usage level, in one context (an annotation and note-taking service), customers who heard about the service through search and mass-invite exhibited significantly higher usage compared to those who joined through word of mouth (WOM); whereas in another context (a cloud-based file storage service), customers who joined through WOM referrals tended to exhibit higher usage. Yet, examining how routes of adoption relate to specific types of behavior, personal versus social usages, reveals a more nuanced picture. Furthermore, in both contexts, communications postadoption influenced engagement, albeit in different ways. Firm-to-customer communications, through company posts to Twitter and blog entries, had varying effects on customer behavior and in some cases led to lower personal and/or social usage; however, customer-to-customer communications tended to increase personal-use engagement across latent states and in both data sets. The findings suggest that firms offering digital services should pay attention to how the mode of customer acquisition is related to subsequent usage intensity, accounting for both personal and social activity, and encourage customers to interact with each other postadoption.

Keywords: Customer Engagement; Adoption Routes; Word-of-Mouth; digital marketing; Bayesian Estimation; Customers; Communication; Consumer Behavior; Marketing; Online Technology; Data and Data Sets;