MannKind's Afrezza And The Oramed Threat

| About: MannKind Corporation (MNKD)

My last article concerning MannKind Corp. (NASDAQ:MNKD) was a discussion of how its Afrezza will succeed where Pfizer's (NYSE:PFE) Exubera failed. I still believe it can, but I didn't give MannKind's competitive landscape as much attention as I should have. A recent article here, makes a fairly bold statement about an orally administered insulin capsule that will "sweep past" the efforts of MannKind, and the rest of big pharma.

Oramed Pharmaceuticals (NASDAQ:ORMP) is an Israeli company developing proprietary technology for oral drug delivery. On May 17, the FDA cleared Oramed's Investigational New Drug [IND] application for ORMD-0801, an orally delivered insulin capsule. With the IND approval, Phase II clinical trials in the U.S. may now begin. As a potential MannKind investor, naturally I want to assess the threat ORMD-0801 presents to Afrezza.


Oramed's CEO, President and Director Nadav Kidron, holds an LL.B. and an International MBA. Both degrees are from Bar Ilan University, Israel. He is also a member of the Israel bar. In 2005 Nadav founded Oramed to commercialize his mother's -- Dr. Miriam Kidron -- 25 plus years of research. At 38 years old, this is his first executive position and his first attempt to win FDA approval for anything.

87 year old Alfred Mann has a long history of winning FDA approvals for medical devices. His successful ventures include Pacesetter System's pacemaker, MiniMed's insulin pumps, and Advanced Bionic's cochlear implants.

I could go on and on with Alfred Mann's accomplishments, but it is hardly necessary. I am not comparing the two in order to embarrass Nadav Kidron. I intend to show why investors can expect, with relative confidence, Afrezza's penetration into the U.S. market to occur long before ORMD-0801's.


As mentioned earlier Oramed received clearance to begin Phase II clinical trials last week. It will be years before the FDA approves larger Phase III trials. If all goes exceedingly well, Oramed might win FDA approval for ORMD-0801 in late 2017. That is assuming some incredible luck.

In January 2011 the FDA issued a Complete Response Letter to MannKind asking for further studies that outlining specific data it needed in order to issue an approval. According to Mann's statement during the latest earnings call, the company treated the last patient earlier this month. Data is being compiled and analyzed as I write this.

MannKind's data will be presented to the public in mid-August, at which time the company will entertain offers for a marketing partnership. That is of course, assuming that the studies produce favorable results. MannKind intends to resubmit its application in either September or October, and the FDA has 6 months to respond.

Odds are good that Afrezza will be available to the US general public in 2014. Oramed, won't be available in the U.S. until 2017 at the earliest. Afrezza will have at least a three year head start. Of course, the FDA could reject Afrezza again, but it is highly unlikely. I think we can reasonably expect Afrezza to have a three to five-year head start on ORMD-0801.

Patient Applications

Oramed created ORMD-0801 oral insulin capsule with the intention of slowing the degradation rate of normal pancreatic insulin production in the early stages of Type 2 diabetes mellitus [T2DM]. Patients in the early stages of T2DM often ignore early symptoms and refuse to comply with their physicians' prescribed insulin injections. If all goes well for Oramed, you can expect the medication to be very popular among physicians with stubborn, needle averse patients.

Oramed has also studied [PDF] ORMD-0801 as a complementary agent to insulin injections in the treatment of Type 1 diabetes mellitus [T1DM]. However, the FDA approved ORMD-0801 for Phase II clinical studies involving T2DM patients only.

During the latest earnings call, Alfred Mann stated that the company was performing separate affinity studies on both T1DM and T2DM patients. It was the FDA, in fact, that suggested MannKind test Afrezza for the treatment of early stage T2DM.


I could write an entire book on the potential superiority of either of these medications with respect to traditional treatments and each other, but I'll spare you my speculation. What I can say with relative certainty is MannKind's Afrezza is likely to be commonplace before Oramed's oral capsule is finished with Phase III clinical trials.

Oramed will have a tough road ahead proving its superiority. I don't think MannKind investors need to lose any sleep over the Oramed threat, not for a few years at least.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MNKD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.