Keeping Up With Mannkind [updated] Print
By Vinny Cassano   
Wednesday, 19 January 2011 00:00

Mannkind (Nasdaq: MNKD ) is going to have to stay on biotech watch lists until U.S. regulators are finally satisfied with enough data to make an approval decision for Afrezza- an inhaled form of insulin. The Food and Drug Administration asked the company for two new studies of Afrezza yesterday.

According to Bloomberg, there was some shady trading that caused a 38 percent drop the stock five hours before the drug developer publicly revealed that it didn’t win approval for the diabetes treatment. Now that may draw attention from the Securities and Exchange Commission.

MannKind fell as low as $6.05 at 10:36 a.m. New York time yesterday, from $9.37 the prior minute, according to data compiled by Bloomberg. They changed hands for $9.11 at 11:57 a.m., when Nasdaq OMX Group Inc. halted trading through the 4 p.m. close of U.S. exchanges. The pause was lifted at 5:30 p.m., and Valencia, California-based MannKind slumped to $5.10.

If Afrezza is eventually approved as an inhaled alternative to insulin-by-injection, then Mannkind could have an instant blockbuster on its hands, as diabetics could then start to toss the needle to the wayside. Of note, Generex (OTCBB: GNBT ) is developing another insulin spray product, Oral-lyn; the difference being that Oral-lyn absorbs the insulin through the inner lining of the cheek while Afrezza's insulin is absorbed through the lungs.

There's been speculation in the medical and investor circles as to which method of delivery is better, but there has been just as much speculation surrounding the approvals of each product as well.

We'll know Afrezza's fate before too long, but Oral-lyn is still wrapped up in Phase III trials and has some ground to make up. Mannkind's CEO, Alfred Mann, had recently used the term "cautiously optimistic" to support his feelings and monetary position towards a potential Afrezza approval.

MannKind said Wednesday that the FDA has requested that it conduct two trials with both the company’s next-generation inhaler for the drug, and the MedTone inhaler used in Phase 3 trials.

“The FDA has also requested additional information concerning the performance characteristics, usage, handling, shipment and storage of the next-generation device,” the company said.

Mann said in the statement that “while we are disappointed with the complete response letter, we are encouraged that the FDA is asking for clinical studies only to confirm the bridging and handling of the next-generation device to compare it to the device used in our extensive clinical program. We remain committed to working with the FDA to make Afrezza available to people with diabetes.”

We do know this: The Afrezza decision could definitely affect Generex and Oral-lyn, at least at this point on face value.  It will be interesting to see how GNBT investors react to the news.

MNKD continues to be a stock to watch.

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

Disclosure: No position MNKD, long GNBT

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