Developments at Mannkind and how they affect Generex Print E-mail
By Vinny Cassano   
Tuesday, 16 March 2010 10:07

Shares of Mannkind dove to under seven dollars at one point on Monday after it was announced that the FDA had asked for additional information regarding the comapany's inhaled insulin product, Afrezza. After rebounded slightly towards the end of the day, MNKD closed at $7.89. There were no safety concerns cited by the FDA, according to publicly released information, but the administration is mainly interested in the commercial version of the MedTone inhaler that is used to deliver insulin.

Mannkind's Afrezza is inhaled via the MedTone inhaler and then absorbed into the system through the lungs. While the FDA has cited no safety concerns regarding absorption through the lungs, there has been some concern expressed by others in the medical field whom believe that the lungs could face long term damage as a result of the inhaled insulin.

Generex (GNBT) is currently testing Oral-Lyn, another insulin inhaler product, although with Oral-Lyn the insulin is absorbed through the inner lining of the cheek.

Shares of GNBT remained steady on Monday as MNKD plummeted, and I think that the bad news for Mannkind can, in turn, be very good news for Generex. Because it is not quite clear how long the FDA development will set Mannkind back, the FDA delay gives Generex some time to play catch up. This could become a very valuable turn of events for Generex, assuming that the product meets its Phase III endpoints and passes muster with the FDA.

Since the delay is mainly a result of the commercial version of the MedTone inhaler and not a concern with the insulin delivery, the Mannkind setback should be a non-factor for concern that the same thing could happen with Generex, and I'm guessing that the market feels the same since the GNBT stock held its ground on Monday.

As for the direction of the GNBT stock, I think that it will react in similar fashion to SIRI - when its ready to move up to a dollar, it's going to happen pretty quickly. Any further rises in price will be the result of a Phase III announcement, in my opinion.

Orally administered insulin looks to be the next big thing in treating diabetics, so the developments of both Mannkind and Generex are definitely worth watching.

Disclosure:  Long GNBT, no position MNKD.

Vinny also authors the popular stock investing blog VFC's Stock House.

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