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Joe Springer
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It is very hard or impossible to time the broad market consistently — there are no famous investors that got rich by consistently knowing what the broad market would do next. This only makes sense, as there are just too many variables in the broad market. But there are many famous investors who... More
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  • Responding To Adam Feuerstein On Afrezza 10 comments
    Apr 17, 2013 12:49 PM | about stocks: MNKD

    The Street's Adam Feuerstein's latest attack on MannKind (NASDAQ:MNKD) makes several "scary"claims:

    1. We should be scared because MannKind is running a study to clear Afrezza for use on people with Mild Obstructive Pulmonary Disease
    2. A 2008 study had a high drop-out rate
    3. Afrezza caused depressed lung function over a two year period

    Let's balance that out:

    1) Afrezza could be cleared for people with Mild Obstructive Pulmonary Disease, good! The current studies are for people who do not have "History of COPD, asthma, or any other clinically important pulmonary disease," this could open Afrezza up to these people.

    2) In 2008 everyone was scared of inhalable insulin because of Exubera. CEO Alfred Mann at the January JP Morgan Healthcare conference:

    One of the greatest drug failures in history was the Pfizer attempt to do this some years ago with Exubera. After that failure, when they asked the question in 2008 to the physicians at the American Diabetes Association meeting only 28% of the people felt they would ever use an inhaled insulin. A year later, when people began to learn that we are not just an inhaled insulin but a new form of insulin that has tremendous physiologic benefits, the number had risen to 48%, and then in 2010 they asked the question again, and by now people were beginning to understand the significance of Afrezza, and now 95% of the physicians said they would use Afrezza in their practice. They stopped asking that question since it was so overwhelming after that.

    If your own doctor would not even consider inhalable insulin in the wake of Exubera are we supposed to be surprised that patients dropped out?

    3) Dr. Mann at that same conference:

    We also see a very tiny reduction in pulmonary function, you know like a, maybe a 1.5% reduction. That reduction, by the way, is comparable to what you see in the other cohort, the conventional cohort. It's the reduction you get in about 4 months of life, so it's hardly significant. The FDA set as a goal that we don't include patients who have below standard pulmonary function of 30%, we're talking 1.5%, it's a not a big deal, the FDA is not concerned, nobody seems to be concerned. And by the way it's probably just a reaction to the inhalation of the powder before you do the test because once you stop taking Afrezza the 1.5% is restored, so it's really not an issue.

    There will almost certainly be more "scary" articles about Afrezza. It is important to realize that institutions do not pay people to write glowing articles about a stock before they buy it. They do the opposite.

    Disclosure: I am long MNKD. 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.

    Stocks: MNKD
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Comments (10)
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  • Joe Springer
    , contributor
    Comments (2650) | Send Message
    Author’s reply » SA editors said:


    "Thanks, but as this offers little insights beyond your article, and contains not so subtly veiled accusations about the other author's motives, we will pass."
    17 Apr 2013, 12:53 PM Reply Like
  • Grand Nagus Kelly
    , contributor
    Comments (1838) | Send Message
    Like watching the feud. Feuds are good for traffic. AF is tough to fight though since it looks like he has far more people reading his stuff. Tough to fight the guy that controls more ink.


    Be interesting to know how or why AF picks his adversaries or stocks to pan. You're in good company Joe. Two of my other favorite authors, Brian Nichols and Scott Matusaw have also been in AF's crosshairs.
    17 Apr 2013, 02:15 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2650) | Send Message
    Author’s reply » Thank you Joe.
    17 Apr 2013, 03:29 PM Reply Like
  • Tau
    , contributor
    Comments (41) | Send Message
    Good work Joe! I am not familiar with MNKD, but started reading your articles about it. Thanks for sharing great ideas.


    One quick question - I see there was 25% float shorted as of end of March. Do you know if there is any Convertibles or other capital structures in Mannkind that would let people short common shares and long convertibels to lock in difference?
    17 Apr 2013, 04:05 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2650) | Send Message
    Author’s reply » Thank you Tau. Yes - check out MNKIW and MNKDW.
    17 Apr 2013, 05:31 PM Reply Like
  • dobbst
    , contributor
    Comments (20) | Send Message
    Thanks for your post, joe! It's so refreshing to have an author that has the courage to counter Adam F's obvious short articles. Hopefully you will still be around in the coming months when they will inevitably step their game up.


    Keep up the diligent reporting.
    17 Apr 2013, 07:35 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2650) | Send Message
    Author’s reply » Thank you dobbst, inevitable is right, and this article was rejected in part because it contained information in my Pro article, which is now for subscribers only. Someone else is going to have to get articles published on MNKD, I seem to be relegated to comments and instablogs on MNKD now.
    17 Apr 2013, 07:38 PM Reply Like
  • David Razavi
    , contributor
    Comments (12) | Send Message
    There are over 38 studies posted and completed with multiple of them addressing "safety" as NON-ISSUE. The title of his argument should have been COPD study in progress for new users of drug!! This is post landing then expanding to smokers and others with COPD!
    AF article just picking a safety study for small group of COPD patients (Chronic obstructive pulmonary disease (COPD) is an inflammatory disorder of the lung that is characterized by irreversible or partially reversible airflow limitation )which is small subset of patient to use to extend the drug and not the main users. Adam F being POLITICAL SCIENCE major and non-technical then I am not surprise with his SPINNING argument and responses.


    Look at Study 2-3, 8, 12, 17, 18 study 22, 24, 25, 30, 34, 38 that are ALL COMPLETED! I have a bad news for the shorts! Run and buy now before getting getting burned.
    Study of the Efficacy and Safety of Inhaled Technosphere Insulin in Patients With Type 2 Diabetes
    Safety and Efficacy of Technosphere® Insulin Inhalation Powder (TI Inhalation Powder)When an Optimal Dose is Taken With Varied Carbohydrate Intake
    Efficacy & Safety of Inhaled Insulin in Type 1 Diabetes
    18 Apr 2013, 01:48 AM Reply Like
  • Joe Springer
    , contributor
    Comments (2650) | Send Message
    Author’s reply » Thank you David, Amen.
    18 Apr 2013, 01:53 AM Reply Like
  • gbstern13
    , contributor
    Comments (164) | Send Message
    You know, this isn't a direct corollary, but worth mentioning....


    AF has clearly targeted Mannkind to beat up repeatedly for some reason, be it financial gain or other. But in stark contrast to his claims of sure failure is his own highly-trumpeted Feurstien-Ratain rule. While that is intended to be applied only to oncology could make the argument that Afrezza is in similar territory as a game-changer for a widespread life threatening disease.


    Applying his own rule to Mannkind- who has a $1 billion-plus market cap more than six months ahead of an anticipated NDA....this drug has about an 80% chance of getting approved.


    I anxiously await AF to see this and counter with a littany of explanations as to why this rule wouldn't apply to Afrezza, but I think it's still worth noting for consideration.
    18 Apr 2013, 10:12 AM Reply Like
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