MNKD 2017 Annual Report

Competition The pharmaceutical and biotechnology industries are highly competitive and characterized by rapidly evolving technology and intense research and development efforts. We compete with companies, including major global pharmaceutical companies, and other institutions that have substantially greater financial, research and development, marketing and sales capabilities and have substantially greater experience in undertaking preclinical and clinical testing of products, obtaining regulatory approvals and marketing and selling biopharmaceutical products. We face competition based on, among other things, product efficacy and safety, the timing and scope of regulatory approvals, product ease of use and price. Diabetes Treatments We believe that Afrezza has important competitive advantages in the delivery of insulin when compared with currently known alternatives. However, new drugs or further developments in alternative drug delivery methods may provide greater therapeutic benefits, or comparable benefits at lower cost, than Afrezza. There can be no assurance that existing or new competitors will not introduce products or processes competitive with or superior to our product candidates. We have set forth below more detailed information about certain of our competitors. The following is based on information currently available to us. Rapid-acting (Injected) Insulin Currently, we believe that Afrezza has a unique pharmakenetic profile, i.e., with the first measureable effects occurring approximately 12 minutes after administration, reaching peak effects within 35 to 45 minutes after administration of a 4 or 12 unit dose. There are several formulations of “rapid-acting” insulin analogs that reach peak insulin levels within 45 to 90 minutes after injection. The principal products in this category are insulin lispro, which is marketed by Eli Lilly & Company, or Lilly; insulin aspart, which is marketed by Novo Nordisk A/S, or Novo Nordisk; and insulin glulisine, which is marketed by Sanofi. In September 2017, Novo Nordisk announced that Fiasp ® , a faster formulation of insulin aspart, was approved by the FDA for improving glycemic control in adult patients with type 1 or type 2 diabetes. Fiasp was previously approved in Europe and Canada. Inhaled Insulin Delivery Systems Dance Biopharm, Inc. is developing a liquid formulation of recombinant human insulin for administration with a small handheld electronic inhaler. Non-insulin Medications Afrezza also competes with currently available non-insulin medication products for type 2 diabetes. These products include the following: • GLP-1 agonists, such as exenatide or liraglutide, which mimic a naturally occurring hormone that stimulates the pancreas to secrete insulin when blood glucose levels are high. • Inhibitors of dipeptidyl peptidase IV, such as sitagliptin or saxagliptin, are a class of drugs that work by blocking the enzyme that normally degrades GLP-1. • Sulfonylureas and meglitinides, which are classes of drugs that act on the pancreatic cells to stimulate the secretion of insulin. • Thiazolidinediones, such as pioglitizone and biguanides, such as metformin, which lower blood glucose by improving the sensitivity of cells to insulin, or diminishing insulin resistance. 6