Verdict on MNKD's Afrezza Deferred - Analyst Blog

Recently, the US Food and Drug Administration (FDA) stated that it will not be able to arrive at a decision regarding MannKind Corporation's (MNKD) inhaled insulin candidate, Afrezza, by December 29, 2010 as announced previously.

The US regulatory body stated that it will need approximately 4 more weeks to complete its review of the application seeking marketing approval for Afrezza in the US. The candidate is being developed for treating type I and type II diabetes.

We remind investors that the FDA accepted MannKind's resubmitted new drug application (NDA) in July this year after issuing a complete response letter (CRL) to MannKind on Afrezza in March 2010 due to insufficiency of data. While issuing the CRL, the agency asked for information about the commercial version of the company's MedTone inhaler, which is different from the one used during clinical trials. Furthermore, the FDA requested for updated safety data.

The resubmitted NDA, in response to the CRL, included safety and efficacy data from the completed studies on the candidate. The resubmission was classified as a Class II review. Consequently, a decision from the FDA was expected to be out within 6 months and a target date of December 29, 2010 was assigned. However, the latest decision to defer the verdict by approximately 28 days implies that a final verdict should be out in January 2011.

Afrezza utilizes MannKind's proprietary dry powder Technosphere formulation of insulin. It is inhaled deep into the lungs using the company's MedTone inhaler. Once inside the lungs, the insulin is rapidly absorbed into the bloodstream.

Lucrative Diabetes Market

Afrezza, on approval, will target the highly lucrative diabetes market which provides one of the largest opportunities in pharmaceuticals. The market has a huge unmet need with a high incidence of diabetes. A study published by Diabetes Care in 2006 projected that about 48.3 million people would be diagnosed with diabetes in the US by 2050.

Moreover, competition in the inhaled insulin field is virtually absent now following the withdrawal of inhaled insulin candidates by big pharma companies like Pfizer (PFE). The lack of competition in the inhaled insulin market will help Afrezza gain share, in our view, after approval.

We remain ‘Neutral' on MannKind in the long-term which is supported by the Zacks #3 Rank (‘Hold' rating) carried by the company in the short run.


 
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