MannKind Corporation: Saved by FDA?

MannKind corporation

MannKind Corporation can breathe a little easier now that the U.S. Food and Drug Administration (FDA) has approved the drug Afrezza to the general market on Tuesday, which may have saved the company from sinking. The company’s stock doubled its shares Wednesday after a vote of 13 to 1 to approve the product for adults with type 1 diabetes and a unanimous vote of 14 to 0 to approve Afrezza for adults with type 2 diabetes, according to Market Watch. If MannKind hurdles over the FDA’s red tape, Afrezza would be the first inhaled insulin product in the United States. Even if the inhaled insulin is approved, MannKind still must conduct postmarket studies to ensure its long-term safety.

The vote came as a surprise for some, especially when members of the FDA’s committee criticized MannKind Corporation’s clinical trials, calling them “marginally effective and possibly risky.” The company also had failed twice to win the FDA’s approval, failures which resulted in the FDA demanding new clinical trials for long-term safety. Last week, the FDA raised red flags about Afrezza when some patients who had used the drug developed severe coughing and asthma-like symptoms. The committee was skeptical about the inhaled insulin’s usage among those with underlying lung disease, bronchial spasms, and kidney problems. MannKind Corporation also had missing data in their clinical trials, which had further raised questions and skepticism among the FDA committee.

Last Friday, the company‚Äôs shares dropped 3.3 percent to $5.03 after the FDA issued warnings about Afrezza’s usage. Many investors bailed out in fear that MannKind’s product might follow a previous inhaled insulin’s downfall: Exubera by Pfizer, Inc. However, on Wednesday, MannKind Corporation nearly doubled its shares after yesterday’s FDA approval, possibly saving the company from plummeting further. Even so, there are a few more hurdles for the company to jump over, including skeptical analysts, such as Joshua Schimmer, M.D., from Piper Jaffray & Co. Schimmer, who holds a medical degree from the University of Toronto, cautioned that investors hold MannKind because of the company’s recent history. According to a recent report on ValueWalk, he lowered his price target from $5 to $1.50, stating that the “two-year delay to the partner/drug introduction may still be presumptuous.” He and his colleague Jerry Yang commented that despite the FDA’s negativity toward Afrezza and “highly critical presentation,” MannKind managed to “pull off a very positive panel vote” for the drug — even with the moderate efficacy of Afrezza and its risk of lung cancer. Schimmer’s advice may be prudent since he is ranked number one out of 2,480 analysts with an average of +14.2% return over the S&P-500 and a 75% success rate of recommended stocks, according to ValueWalk.

If Afrezza is approved this year, millions of American diabetics will not have to inject insulin anymore. According to MannKind, Afrezza, which should be taken before a meal, dissolves immediately upon inhalation and travels deep into the lungs, delivering the insulin immediately into the bloodstream. The current time to reach peak insulin levels for injected regular insulin is 90 to 150 minutes and 45 to 90 minutes for injected rapid-acting insulin analogs. Inhaled insulin can make the two former look like dial-up Internet connections since it can reach peak insulin levels between 12 to 15 minutes after administration.

Even with the FDA’s approval, MannKind Corporation is not completely saved from commercial failure, especially among a skeptical market. The company is still a wild card that may or may not revolutionize the way diabetics take insulin. The FDA is not bound by the recommendation of the Advisory Committee. However, it will consider the recommendation while reviewing the New Drug Application (NDA) that MannKind Corporation submitted for Afrezza. The FDA will complete the drug’s review by April 15, 2014.

By Nick Ng

Market Watch
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