MannKind Presents Positive Data - Analyst Blog

MannKind Corp. (MNKD) provided results on its inhaled insulin candidate, Afrezza. It was observed that the combination of Afrezza and basal insulin was non-inferior to the combination of standard therapy insulin lispro (rapid acting insulin) and basal insulin in reducing HbA1c levels in patients with type I diabetes. 

The diabetes market is perhaps one of the largest opportunities in the pharmaceutical sector. In the US alone, 26.8 million people suffer from diabetes. A study published by Diabetes Care in 2006 projected that by 2050, 48.3 million people would be diagnosed with diabetes in the US. 

We believe that Afrezza offers some advantages over traditional needle-based insulin therapy, which currently dominates the market. The key advantage is the convenience of an inhaled delivery. Diabetes patients using Afrezza will no longer have to worry about a needle injection. However, we are skeptical about the approval of Afrezza because many companies in the past have faced failure in their efforts to introduce inhaled insulin. 

MannKind filed a New Drug Application (NDA) with the US Food and Drug Administration (FDA) in March 2009. However, the decision has been delayed with the FDA issuing a complete response letter (CRL). The agency has asked the company for additional information and clinical data that has been submitted. MannKind has requested a meeting with the FDA which is scheduled for June 2010. 

We are concerned that additional trials might be required if the FDA is not satisfied with MannKind’s response. This will not only delay the approval process, but operating expenses will also increase considerably. Besides, with no product on the market and no revenues, we are very concerned about the company’s financial position. The company believes that its funds and the available credit facility will enable it to conduct operations through the first quarter of 2011. 

We are currently Neutral on the stock.
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