MannKind: Naso Oblongo Syndrome?

| About: MannKind Corporation (MNKD)

Summary

I offer an update for the prescription data for YTD sales for Afrezza.

I share my opinion for the two conference calls done by MannKind management in 2016.

I offer background information on the three 'new' potential drug candidates that MannKind now offers up for their investors.

Afrezza: YTD/2016 Marketing Results For MannKind (NASDAQ:MNKD)

Week

Ending

NRxs

%

Change

Refills

%

Change

TRxs

%Change

1

1/8/2016

276

3%

279

-13%

555

2

1/15/2016

242

-12%

260

-7%

502

-9.50%

3

1/22/2016

291

20%

260

0.00%

551

9.70%

4

1/29/2016

296

1.70%

256

0-1.5%

552

0.01%

Click to enlarge

The above data reflects the Nrxs, Refills and TRxs for Afrezza in the first month of 2016. From the highest weekly NRx data showing more than 400 NRxs being written we have seen the precipitous drop of more than 30% from this highwater mark. For the full month of January we see the weekly average dropping to 276 NRxs. The Refills have dropped to an average of 263 per week. Sanofi mentioned that one of the major reasons for deciding to end their partnership was the lack of patients refilling their prescription. I had projected in order to get in line with NRxs , the refills would need to be running well above 600 per week. One can see that the lackluster trend shown in 2015 is continuing in 2016. Now that MannKind will be assuming the responsibility for marketing Afrezza, their task has been clearly identified. It's a daunting challenge before them considering they admit their monetary resources are limited.

My Response for the Two Recent Conference Calls in 2016:

In my last MannKind article I stated my opinion as being MannKind's executives hadn't done the corporation any good by make their appearance at the J.P. Morgan Health Care Conference. It was my position they needed to formulate a better game plan than what they publicly stated at the conference. Now only a few weeks later, the same executives held another public conference where they issued comments, where in my opinion, they have further exacerbated the believability and hope for them being able to salvage the company from becoming insolvent. With a company in such a dire financial position, they need a more productive and feasible game plan. But most of all they need to think through some of the options they are considering and before they put them out in the public domain.

During the January presentation at the J.P. Morgan conference, their Medical Director put forth the following argument for their 'potential' drug candidates using their Technosphere© inhalation technology platform:

"What's important to note is we firmly believe that utilizing our innovative technologies that these candidates you see here can either address unmet medical needs or supply superior efficacy and safety data for already existing programs or products I should say."

If one puts MannKind executive's beliefs about their "innovative technologies", under a discerning microscope inspection for their past proclamations, Dr. Urbanski's claims could be considered as being embellishments, not supported by reality. Let's look at the statement about their technology offering superior efficacy. The only product that has ever been approved by the FDA, using their technology, MannKind spent multi-billions of dollars getting FDA approval for the product. With data they collected from numerous clinical trials involving thousands of trial patients, they couldn't prove their product had superior efficacy when reviewed in relation to the comparator drug in their clinical trials. With this enormous amount of money spent and where they couldn't show better efficacy, now with a 'potential' product using their 'innovative technologies' they talk about supplying superior efficacy. Only having preclinical work that isn't anywhere near being filed with the FDA for an IND, yet they spin a tale of superior efficacy.

It's also a deep puzzlement, for some, who might look at Dr. Urbanski's claim that their "innovative technology" can also offer better safety data. Especially in light of the fact the FDA has mandated MannKind conduct a massive post-approval clinical study that will require more than 5,000 users of their product being evaluated for safety issues. So once again, making such belief statements at this preclinical stage of development might give one pause, where they might think about the reality before assuming they will not have any safety issues going forward. The FDA mandating them conducting a five year clinical study on 5,000 patients isn't exactly giving MannKind the Good Housekeeping seal of approval for safety.

Epinephrine:

For better clarity on the latest proclamations coming from MannKind's management, first let's look at what was said at the J.P. Morgan conference in January where Dr. Urbanski spoke about their preclinical work with epinephrine for anaphylaxis events.

"The last slide, the last one of our clinical development candidates is Epinephrine for Anaphylaxis. I think the one point I want to raise here is this can be an incredibly short timeline. No real clinical studies would be required. Obviously you cannot do a clinical study in the Anaphylaxis setting. So that would be e-study and some human factor studies would probably suffice. So we're looking at this opportunity as again one of our priority ones."

Now consider what Dr. Urbanski said during the conference call on February 3rd, 2016:

"Patients with known allergies are often asked to carry Epinephrine auto injectors. These drug device auto injectors tend to be large and inconvenient to carry around.

They also involve an invasive procedure that is to say an injection into the lateral thigh. This has led to episodes where patients have postponed this injection leading to an adverse clinical outcome. We believe that the oral inhalation route will provide more than adequate levels of Epinephrine. In addition, this noninvasive step has the potential to prevent untoward outcomes secondary to delaying treatment for fear of an injection.

Epinephrine is in the early technical assessment phase. Preclinical work is expected to begin in the second quarter of this year followed by clinical trials beginning in the first quarter of 2017. "

My first response to Dr. Urbanski's claim that a person would delay their auto-injector dosing, because of their fear of using a needle, is absurd. First of all, for him labeling an injection as being an invasive procedure, whereas, for him advocating that an inhaled drug going directly to a person's lung isn't an invasive procedure let me remind Dr. Urbanski of the following:

  1. Compliance for patient's using inhalers has a historical data base showing non-compliance issues are a major problem with such deliveries. If he read the data for the Afrezza trials he would know this fact.
  2. If he would look at the Afrezza data, he would also note that due to multiple issues with dosing Afrezza, there isn't always an even distribution of the drug over the entirety of the lungs, resulting in an inadequate dosing. Such events require the patient re-dosing in order to get the desired results. Now compare this to the historical data that shows the auto-injectors have a fairly clean record of resolving a patient's need where epinephrine provided a safe resolution for their anaphylactic episodes.
  3. As for a dry powder formulation of a drug being inhaled into a patients lungs, why is it that with MannKind's data for Afrezza, there were huge numbers of patients dropping out of clinical trails. Dropping out because of their adverse events relating to their lungs. Does Dr. Urbanski really think that an injection is different and unacceptable when compared to the 'invasive' nature of MannKind drug being deposited into a patient's lungs? Coughing spasms that are due to an "invasive irritant", thereby causing grave concerns for the patient, but it being acceptable by Dr. Urbanski? Is Dr. Urbanski speaking as a medical doctor, or is he speaking as a stockholder when he makes his distinction on what is an invasive event for a patient?

If one recalls from my previous article, after the J.P. Morgan conference, I pointed out contrary to Dr. Urbanski claim MannKind would be offering a solution for injected forms of eprinephrine, there was a minor problems with their goals. I shared the fact that AmphaStar had a NDA before the FDA for another eprinephrine drug delivered by inhalation. At this point AmphaStar's effort has received responses from the FDA that aren't positive for approving their NDA. What I failed to mention in this previous article, in 1984, 32 years ago, AmphaStar had FDA approval for an aerosol metered inhalations product using eprinephrine. As I've stated numerous times, the use of an inhaler delivery system is old news in the medical community. Inhalers are commodity items, where nearly all the major drug development companies have their own inhaler delivery method. This is further validated, where in 25 years; MannKind has attempted to market the Technosphere product where there have been no takers. That is other than Receptor Life Sciences where for some strange reason continues to prevail with the story they don't want anyone knowing who they are.

Please note how the MannKind story has evolved in a matter of weeks. In January the story line was:

  1. This can be an incredibly short timeline.
  2. No real clinical studies would be required.

Now the February story line is:

  1. Eprinephrine is in the early assessment phase.
  2. Preclinical work is expected to begin in the second quarter of this year followed by clinical trials in the first quarter of 2017.

So in a matter of a few weeks, Dr. Urbanski's talking points have evolved from an incredibly short timeline and no real clinical studies being required. Now we know they are merely in early assessment, preclinical work "expected" in the second quarter of this year---and now admitting that they will have to do clinical trials that might begin one year from now. Clinical trials now being part of their plans and them still thinking that their opportunity, with no money, they will have FDA approval in an incredibly short period of time. Now, folks! That is what pipe dreams are all about!

I think its very obvious, with the recent road blocks that the FDA has thrown up for an inhaled form of eprinephrine, the medical community, doctors and patients are very satisfied with the cost and results from using Epi-Pens for injecting eprinephrine.

Treprostinil:

This is what Dr. Urbanski said on February 3rd, about this drug candidate that is now part of their development program:

"The first is Treprostinil for pulmonary arterial hypertension, PAH. PAH is a sizeable market expected to reach $10 billion by 2020. Treprostinil, a prostacyclin vasodilator is currently available in several formulations. However, these often carry a significant burden. This often leads to poor compliance and poor clinical outcomes.

Our Tresprostinil program is in the early technical assessment phase. Preclinical is expected to begin in the second quarter of 2016 followed by clinical trials beginning in first quarter of 2017. We are actively looking for a development partner for this program. Ideally, the partner would be companies that already are active in this space."

I can actually help Dr. Urbanski with his effort for seeking a partner that is already active in this space. A company that I suggest knows something about significant burdens, poor compliance and poor clinical outcomes when delivering tresprostinil the right way as opposed to the wrong way.

They are so aware of these issues; they might challenge Dr. Urbanski on his claims about poor compliance and poor clinical outcomes. They could start by sharing with Dr. Urbanski their financial statement for their cash and their zero balance for any long-term debt. Maybe Dr. Urbanski and MannKind's CEO might want to reassess their willingness to challenge this asset rich company's dominance in the tresprostinil market place. If one notes their following financial position, maybe it's Dr. Urbanski that is wrong about his contention that other companies have delivery methods that "often leads to poor compliance and poor clinical outcomes."

United Therapeutics Corporation

(NASDAQ:UTHR)

Data As Of February 4th, 2016

Stock Price

$124.00

PE

9.8

EPS

$12.71

TCAssets

$1.2

Billion

TCLiabilites

$557 Million

Long Term Debt

(ZERO)

Click to enlarge

Let's merely look at two medical drugs United Therapeutics has approved by the FDA. Actual having approved drugs this allows United being able to generate a stock price that is valued $123.00 dollars more per share than MannKind's share price. These same drugs that Dr. Urbanski cites, has given United Therapeutics the ability for generating through the first three quarters of 2015, revenues totaling more than $748 million. Based on historical sales they will once again exceed one billion dollars in revenue for 2015.

The first product to look at is Remodulin, where 7 out of 10 patients on continuous PAH therapy are prescribed this drug. It may be administered as a continuous subcutaneous infusion or continuous intravenous infusion. . So is this the market that MannKind will take away from United Therapeutics?

If that is the case maybe investors need to become acquainted with another product that is approved by the FDA, and marketed by United Therapeutics. A drug they market under the name Tyvaso. And guess how Tyvaso is dosed? If you guessed that it is dosed with a United Therapeutics inhaler---BINGO! If you guessed it's treprostinil for PAH, then you get to move to the head of the class.

I'm sure that United Therapeutics' executives are trembling in their executive suites and laboratories knowing that MannKind, with no funding to explore anything, is nipping at their heels with a "me-too" drug. Once again, MannKind executive keep their rolling and constantly evolving promises where their technology is going too control the delivery of drugs. However, in 25 years they haven't been able to convince anyone with any money or public presences to partner with their inhaler technology. That is other than their former partner Sanofi (NYSE:SNY).

Palonosetron:

This is the third product that MannKind has in its development plans. Dr. Urbanski made the following comments during his recent conference call:

"Palonosertron is in the early technical assessment phase with preclinical work expected to begin in the third quarter of 2016 followed by clinical trials beginning in second quarter of 2017. Again we are looking for a development partner for this program. Ideally, company or companies already in the oncology supportive care space."

Why would MannKind be in early technical assessment with palonosertron for uses related to nausea and vomiting associated with the patient receiving chemotherapy? Why would MannKind also want to deal with the same nausea and vomiting associated with surgical procedures that a patient is scheduled to have?

I ask these questions for one simple reason and that it because Aloxi, a palonosertron drug for treating nausea and vomiting, is already approved by the FDA. Eisai, a large Japanese drug company has this drug in their portfolio. Eisai has the drug in both pill form and for IV delivery. So look at what MannKind's spin is from Dr. Urbanski-

"There are many advantages to the oral inhalation while it avoids the need for IV access or having access to the patient's port, it can be used when oral agents are not practical, for example, with mucositis. It can be self-administered, for example, to prevent anticipatory nausea and vomiting. It has the potential to decrease the cost of care, nursing time, pharmacy cost, et cetera. And it can be used in multiday regimens."

I concede the point made by Dr. Urbanski as it relates to the major adverse effect that chemotherapy has on many patients' mucous membrane that extends from their mouth to their anus. Horrible issues related to these occurrences! But for him to imply that an inhaled version of palonosertron would avoid the need for IV access is absurd. These patients are having chemo sessions where the first thing done by the attending caregiver is putting in place an IV line. Palonosertron has to be given 30 minutes before the dosing of chemo, so the IV access line is already available.

I also might point out that Aloxi has been approved for dosing patients that are as young as one year old. Does Dr. Urbanski think they can train such young patients, going through the trauma of chemo treatments, how to master the inhalation process? MannKind openly admits they are facing a problem training adults how to use their inhaler for delivering Afrezza. Wouldn't it be fair to ask Dr. Urbanski why it would be different for a young child trying to inhale palonosertron?

As for decreasing the cost of care, nursing time, pharmacy cost---an inhaled drug and the manufacturing process related to this type drug where it has to be converted into a dry powder and this is going to be cheaper than a pill or liquid solution dosed through an IV line? Not hardly! If you want proof, think of the enormous cost for manufacturing Afrezza by changing insulin into a dry powder formulation. Even after having Afrezza on the market for one year, MannKind's new CEO admits that he hasn't been able to figure out their manufacturing cost. Still Dr. Urbanski spins the story they will have a more cost-effective product that will dominate the markets.

As for Dr. Urbanski's claim that the MannKind inhaled product would be a cost saver, let me remind him that Aloxi, when used for surgery patients, it has to be dosed immediately before given anesthesia. So sure, having a patient going into surgery, having the potential of a coughing spasm, is going to make the caregivers really happy, when they know they had an IV line in place and could eliminate chances for such spasms.

The bottom-line for what Dr. Urbanski is offering shareholders is the "potential" for developing an inhaled version of palonosertron. What he failed mentioning is that Aloxi already has a huge dominance in the market. Furthermore, Dr. Urbanski fails mentioning, but be assured any potential partner for MannKind will know, on October 13th, 2015, the FDA approved two (2) generic versions of Aloxi for IV dosing regimens. One company is Teva and the other is Sandoz, a Novartis owned company. Neither being minor players in developing and marketing drugs in a world-wide setting and for sure they have the monies to wager in a pricing war with MannKind.

If you are a stockholder, why would any potential partner want to partner for an inhaled version of a drug that has three major drugs companies, with deep pockets and generic versions, already approved and in the market place. And never forget the fact that by introducing an inhaler into the approval process, whom ever opts to pursue this approach, they would be facing the cost of a massive and expense clinical trial process. With MannKind's "me-too" product possibly entering the market, with a delay of at least three years, these other companies will have locked up the market.

Concerning the new promises of enhancing their product line, I've often stated that you have to pay attention for the promises. I've just listed the three (3) product that they are now pursuing-one for PAH, one for nausea and vomiting and the final one anaphylactic reactions. Does anyone notice what is missing from this list?

MannKind's Ever Evolving Business Model:

The following is what I wrote after the 1st Q, 2015, in an article titled-"Mannkind: A Head Pain Gain or a Pocket-Book Drain." In the article I address the promises made by MannKind concerning their efforts in the migraine market. This is what I said---

"In recent public comments and press releases, they have alluded to efforts for expanding beyond the application of their technology for inhaled insulin into other drug compounds addressing large medical needs. In their 1Q 2015 conference call, Hakan Edstrom, MannKind's CEO commented "we have the potentially significant reduced regulatory hurdles and timeline, especially if combined with an already API." He later added comments about pain management where he specifically mentioned migraines. And finally, during the Q&A session in response to a question about a timeline for expanding their technology, he gave a timeline of 12 to 18 months before material events would occur with this expansion effort. These comments were made in April 2015."

Now 12 months later, all MannKind has are new "potential" products that are still in preclinical stage of assessment. Most of all, the product areas that had been mentioned for years was a migraine and pain management drug being dosed with their technology -- what happened? This is what MannKind now claims as of February 3rd, 2016-

"MannKind has recognized that Technosphere technology has the potential to provide impressive drug delivery solutions across a wide variety of therapeutic areas encompassing a number of diverse products and disease states. The unique pharmacokinetic profile of drugs inhaled as Technosphere formulations have the potential to provide significant competitive advantages over drugs delivered via other delivery systems."

And then they stated the following-

"Of note, we have discussed in the past prior investigations into migraine and pain management. We still consider these areas attractive and ideally suited to our technology. At this time, we are reevaluating the clinical and commercial aspects of these potential programs."

A year ago they promised results for their migraine and pain product development efforts in 2016. Now in 2016, they announce they are "reevaluating" those potential products and now have three new candidates where they are going to challenge the major drugs companies that already have successful drugs in the market place. Further more MannKind tells you they need a partner before they can make these recent promises happen.

And for those true believers in MannKind's stock, they think there is a great conspiracy taking place against their investment. Mannkind never makes a mistake with their business plans---that is if you can forget what they promised last year and even years before then. They have even changed their story over the time from their first CC this year to the one only a few weeks later. But this is all a conspiracy from others wanting to create the demise of MannKind.

If only tomorrow ever comes for their promises!

It is my sincere hope and wish that Afrezza remains available for those patients needing options for addressing their medical needs.

Good luck with your investing decisions!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within 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.

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